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Betsie Taber, Real Estate Pro in 34202

What are the drawbacks of selling your house as a FSBO if you are an agent?

Asked by Betsie Taber, 34202 Sat Aug 11, 2007

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Agents become emotionally invovled with the property and lose sight of objectivity. This is common for any seller attempting to negotiate on their own behalf. This truism does not disappear simply because one holds a real estate license.

As a FSBO or listed through a broker, a neutral third party experienced and knowledgeable will bring about better results in almost all cases.
3 votes Thank Flag Link Sat Aug 11, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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Another story - must be the story telling time. A very experienced agent put his house on market on MLS actually, and marketed it. The house is gorgeously remodeled top down, and looked great! After of couple fo times, it's now off the market.

When I chat with him, he said that he actaully had a pretty good offer, but when they got down and were negotiating the details, he could not detach himself from certain things and the contact fell through.

However, when I asked if he'd let other agent list the house when it comes back on market again, he said that he wants to list it himself again, but he has learned form this lesson and will try to treat this more like a regular sale rather than selling his own home.
2 votes Thank Flag Link Mon Aug 13, 2007
Sylvia Barry,…, Real Estate Pro in Novato, CA
MVP'08
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I have a related story - although this involves an MLS listing. The listing agent was also the seller. I've had two such situations fairly recently and from these experiences I can honestly say that agents - even when they list on the MLS, should be leary of representing themselves.

The most recent incident was last week and it was totally ridiculous. First, the agent didn't properly disclose that he was the owner. On our MLS, agent/sellers are supposed to include and M6 as well as mention their interest in the property in the agent-to-agent comments. This agent did neither - he did put his name last name down in the "seller" column, but it was a very common name that would probably fill a couple of pages of most phone books. I start negotiating and he claims he already has an accepted offer at asking price. The unit was very nice and well priced, so it was possible that this was true. But I had a very bad feeling. Something was giving me my instinctive " this is a total jacka** alert." Bad attitude and in a HUGE hurry for signed contracts. However, my people decided they wanted the unit badly enough to go $5k over asking. They were also putting almost 30% down - so appraisal was not an issue - a great deal for the seller. We got the AO and had an inspection within two days. The next day the contracts went out (they go directly to lawyers around here.) By that afternoon the agent was on the phone "did they sign them yet?" I'm surprised because they only just got to the lawyers desk 3 hours ago. The agent kept calling and calling saying he had someone else lined up. "It's a boiler plate contract - it should take 5 minutes! Don't you WANT your $5000? Do your F***ing job and get them signed!" I told the agent that I would get paid by SOMEONE down the line and that it had to be a good deal for my people. The lawyer said it was a terrible contract and faxed it to me. I was STUNNED. Boiler plate my eye! As far as my buyers were concerned the riders had created a contract that was like swiss cheese with hundreds of holes they could have fallen through - costing thousands potentially. NO WAY were my people signing that contract. I called the agent and he screamed at me for being unprofessional - and HE threatened to call my manager! I said "go ahead, the number is..... and btw, I'm sure he'll be calling your broker about the disclosure issue that is against the law." He screamed "CANT YOU READ??? MY LAST NAME IS DOWN AS THE SELLER???? YOU ARE INCOMPETENT!!! I HAVE NO PROBLEM WITH NOT DISCLOSING MORE THAN THAT!!! YOU SHOULDN'T EITHER...DON'T YOU WANT YOUR MONEY??
The agent was acting like a maniac and he KILLED the deal all by himself.

I noted that he had another unit in the same building - again no disclosure. In the history it showed that he had under conditional contract for 2 hours! He probably put it there in anticipation of a signed contract but the buyers wouldn't sign because of the riders.

I hope this guy continues to have "no problem" with non-disclosure because I have printed out the listings and am sending them to the Board of Realtors - to the ethics committe.

The lesson: if you can't remain objective DON'T negotiate your own deal. As for going FSBO if you are an agent: It looks bad. It looks like you are too desperate for money and are trying to save every penny. How is that going to help you negotiate a good deal for yourself? It looks strange to buyers who know you are an agent. It looks doubly strange to other agents. Bad idea - and if you are that desperate for every penny, you really should have a 3rd party negotiate for you. Its interesting that this is the 2nd agent/owner I've dealt with in the past few months and both ranked as the most difficult to negotiate because the seller/agent was too emotional and money-hungry. They couldn't be objective about their own property and wallet.
2 votes Thank Flag Link Mon Aug 13, 2007
Michael
I do'nt know how successful you are in your real estate career. Just like winning at any other endeavor, the ONLY reason I can think of that would cause you to ask this question is that YOU don't see yourself as adding value to a transaction .

The profession of real estate would not still be around if there was not need for it. In the market place, I see agents sell property themselves. Aside from the E & O issue, if I were your broker I would not allow you to sell on your own.

I believe that I bring value to my client's transactions. I believe if they use someone else they will net less for sellers, and pay more for buyers. However, not only do I believe it, I can PROVE it to me, you, and anyone else.

So, IMHO it's an issue of belief. I am sure not I know how to say this without sounding judgemental: If you really think that selling on your own is a sensible option, then you migh want to consider another line of work. It will be very difficult to respond wihen a potential client asks "why should I do business with you?" I know my answer. Do you?

Keith
2 votes Thank Flag Link Sat Aug 11, 2007
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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Sounds like trouble to me. First you have to disclose that you are an agent. I would think that would make a lot of buyers feel like they were at a disadvantage. It would be like representing yourself in court to them. Doesn't sound like a win-win. What is the worst that could happen if you list with your company? Who is your company? There are some agencies like mine that give the agents a break when listing their own personal home! If it is an investment property, it would be even safer to list through your broker.
Web Reference: http://carriecrowell.com
2 votes Thank Flag Link Sat Aug 11, 2007
Sorry my response was soooo loooong. Fact is, this just happened Friday and it was juxtaposed to some terrible family news. So I wasn't in the greatest state of mind when this transpired and it was fresh. Fact is that most agents can't detach when they are the seller. There was one agent trying to sell some land she had purchased and she must have asked 20 people about her pricing. She was smart enough to say "it's different when its my own property - so I feel shaky about my asking price." I've never tried to sell my own place. THe property I own is pretty unusual (location, type of structure) so its difficult to put a price on it. I tried to once, but I find that I am NOT objective.
1 vote Thank Flag Link Mon Aug 13, 2007
Not using the system that you personally use to make a living is really bad karma. I believe an agent who does not co-op will lose respect within the industry. It will come back to bite them.

We co-op for a good reason, it's best for the consumer.
1 vote Thank Flag Link Mon Aug 13, 2007
Have I got a story! A huge 5 bdrm house behind me in a very family neighborhood was for sale. It had an office sign and agent that I had seen around town before. As a nosy neighbor, I went through the open house. I was greeted by the husband and wife owners who disclosed that he was an agent. As I walked through I was initially alarmed at the amount of clutter, dark rooms from closed curtains and minimal lights. Then I saw some very unusual artwork, a dream-catcher made of bones and a mask with mouth and eyes stapled shut. My first thought was a 5 year old having nightmares after seeing them. (Lets see, this was 6 years ago and I still vividly remember it.) Then I went upstairs. One bedroom was painted all black - all walls, all trim, and the ceiling! Engraved/gouged in the trim of the door was some sort of foreign or ancient writing in white. This is not something that could be covered up with putty and paint, you would have to replace the trim. I wasn't sure until I saw on the desk some clues that yes, they were practicing voodoo.

For the next several months, this was the talk of the neighborhood. Everyone was asking everyone else if they had seen it. But they all warned, don't take the kids. I couldn't believe this was a Realtor. I took the listing sheet and ran some comps, the house was overpriced by about $100,000 too! The home was finally taken off the market and my Realtor said that fellow Realtors told him that he had become the joke of the industry. Talk about lack of objectivity.

Michel: I thought it was a great question to spur conversation. Sorry people thought you were planning on doing it.
Ruth
Web Reference: http://www.oak-park-il.com
1 vote Thank Flag Link Sat Aug 11, 2007
Ruthless, Other/Just Looking in 60558
MVP'08
An agent who sells a personal residence outside of the MLS is hypocritical in my opinion. How can you sell clients on the advantages of the MLS only to turn around and forego cooperation with other agents when it is your own house? I believe fully in the power of a professional sales force scouring the local market for my buyer. The notion of pocketing the buyer's agent commission is silly to me, because I would ultimately hurt my selling price by reducing the exposure (and subsequently, the demand). I have no doubts in my ability to secure a buyer for my home, but commanding the same price with the limited exposure is improbable at best. This is just the nuts and bolts of the financial side, too. Face to face dealings with the other principal in the sale is about as appealing as ebola. Further, I don't think it is being a very good citizen in the community of REALTORS. Like the agents who will attempt to sell their creampuff listings exclusively, it would not be good for the industry if everyone started hording their listings. Refusal to co-broke hurts the seller and the industry at large. There was not always an MLS. If we are not careful, there will not always be one either.
1 vote Thank Flag Link Sat Aug 11, 2007
I think you are telling the public that you have chosen this as your career and expect them to pay you but you don't support the profession yourself. It gives a negative vibe.
0 votes Thank Flag Link Fri Apr 25, 2008
Just like other professions, we should prohibit ourselves from trying this. Doctors shouldn't self medicate. Attorneys mostly know if they need an attorney not to try it themselves. It amazes me that Realtors think they can bypass the system. They should know better.
0 votes Thank Flag Link Fri Aug 17, 2007
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
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If I were to list my home for sale, I would do so on a cooperative basis with another agent. I would do so for objective assistance in pricing, staging and marketing --and for additional objective guidance in negotiations.

I would also happily pay that agent a commission. It would be earned.
0 votes Thank Flag Link Sat Aug 11, 2007
Roberta Murp…, Real Estate Pro in San Diego, CA
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For the information of all of you who cared to answer, I asked the question to have arguments when I go after FSBO/agent listings. I hope you can benefit from the comments too. This is a wonderful forum to gather great information from knowledgeable (most of the time) people. Thank you and keep it alive. The FSBO/agent market can be very profitable because very few people think about going after it.
0 votes Thank Flag Link Sat Aug 11, 2007
When we talk with FSBO's we tell them as FSBO's they are getting the maximum exposure for the highest and best price. We are emotional when it is our own home and can loose site of objectivity.

I agree with Paul that we are being hypocritical and not using the MLS.
0 votes Thank Flag Link Sat Aug 11, 2007
Pam Winterba…, Real Estate Pro in San Ramon, CA
MVP'08
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I think that you would suffer the same limitations as a regular FSBO. Although you have the knowledge to represent yourself, by doing it yourself you leave a lot on the table. For example, your E+O insurance is not going to cover this transaction. You are giving up on the websites associated with your office, decreased marketing opportunities, less exposure, many Realtors dont show FSBO because they are afraid they will not get paid or they (or you) will end representing both parties for half commission. Most offices will let you list for a nominal fee to cover expenses and you pay the buyers side only.
0 votes Thank Flag Link Sat Aug 11, 2007
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