Hi Mike,
The agents who have responded are absolutely right. I represented a buyer on the sale of a FSBO through a limited service agency recently. I was running back and forth, twice the workload. Twice the explanation. Plus, I had no control over the person I was working with. For example, if I don't think that a particular buyer or seller respects me or what I do, I won't work with them as a listing agent or a buyer's representative. When you represent a buyer in a FSBO transaction, you are dealing directly with one of the parties in the transaction and you do not have the luxury of dealing with a more objective third party when you are explaining the offer and additionally you must explain the process, to someone who often comes from a hostile perspective. (We know going into an offer situation with a FSBO that the seller doesn't respect what a listing agent does, so we realize up front that it will have the greater risk of being extra difficult to do our buyer's representation).
Most agents know enough to be cordial and responsive to a buyer's agent. Most agents that I have interacted with understand basic good busines practices. This FSBO seller did not. She had no stake in her reputation among the business community of agents who "farm" or sell homes in her area. She could care less, she had one deal to do and she was ruthless and unethical about it. There was no holding her to a higher standard as a Realtor is held to by our code of ethics.
In this limited service/FSBO listing I represented the buyer for; I had to completely explain the process to the seller who was rather deceptive. As but one example, although the contract clearly stated that window coverings were to remain, this charming seller removed all of her silk draperies and had hidden several minor defects, the buyer believes deliberately. The limited service brokerage gave me little support in enforcing the contract. I ultimately got a small credit for the buyer from the very rude seller, but it did not cover the replacement cost of the window coverings she took. The buyer's recourse for the defects found at closing would have been to go to small claims court and they wanted to move on. (The seller had made the house difficult to access by not allowing a keybox, so much of the missing fixtures/towel bars, etc were not found until after closing- they were present on the walk through).
So, truly, FSBO's or listings through limited service brokerages are far greater risk for the buyer as well as double the work for the selling agent. FSBO's also illustrate the importance for an agent to get a written buyer's agency agreement. (Of course, this is an entirely different subject, but worth touching on in this context.)
So, while I will always continue to diligently show my buyer clients every option, I am aware of the greater risks and extra work involved for me personally to sell a home that is not listed with a credible full service brokerage. There is comfort in doing business with an agent from one of the larger companies when I can be confident that the agent has had training and support to properly prepare their client as well as the listed property for market. There are bad apples in every trade, but I have found that more often than not, listing agents see the big picture and truly make things happen to keep the transaction moving forward for their clients.
They package the listing, pay up front costs on all the marketing, generate a marketing plan tailored to reach the target buyer, prepare the seller by educating him to the market forces, trends and contract terms, make the property available to easily show, help screen prospective buyers, strive to overcome obstacles and objections from buyers, objectively alert the seller to feedback trends that may help the seller better position the property. As a real estate professional, the agent also ensures that the law that protocol and all the proper rules of law are followed. If they are not, the agent and their broker are held accountable. There is comfort in that regard.
There is also comfort as a listing or selling agent when I know the agent on the other side of the transaction is coming from a larger company or one with an excellent reputation for striving for training their agents and having the "big picture" when their word and reputation means something. I have been in transactions that only stayed together because the other agent worked with me to "chip in" and get things done when the buyers and sellers reached an impasse. The 3% commission with double the workload doesn't leave a margin for that, and causes more of the offers on limited service listings to fall apart. There is little incentive for the buyer's agent to try to salvage the deal.
The key to selling a home is not just the price, location or condition; you must also make the home easy to buy. That is what a good listing agent does, and it is worth every penny. - Tue Mar 18 2008, 08:43