Is there a "secret handshake" agreement among realtors that they will not cooperate with FSBO sales even if offered a decent (4%!)

Asked by Priscilla C, Lowell, MA Sat Apr 10, 2010

commission? I am getting some traffic in showings but noticeably less than with my previous agent, who did not make much effort to market my property. And my property is listed on the MLS through one of the flat fee broker services so it is in there. I'm surprised in this market they aren't more self-interested in getting a possible decent commission than in squeezing out the "competition" of a FSBO seller. I've even emailed all the local agents and those who had previously sent me their own marketing materials that the house is lised and we are very interested in working with buyer's agents, 4% commission etc. Am I paranoid or are they in fact out to get me?

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19
Alan May, Agent, Evanston, IL
Wed Apr 14, 2010
˙ʍou buıɹǝɟɟo ǝɹ,noʎ uɐɥʇ ǝɹoɯ ʎuɐ ǝʞɐɯ ʇ,uop ı puɐ ˙˙˙ʎɐʍʎuɐ ʞɹoʍ ǝɥʇ ɟo ןןɐ ɥʇıʍ ǝɯ buıʌɐǝן 'pǝubıs ǝɹǝʍ sʇɔɐɹʇuoɔ ǝɥʇ ǝɔuo "pǝɹɐǝddɐsıp" ʎןןɐnʇɹıʌ sɐɥ oɥʍ ʇuǝbɐ buıʇsıן ɐ ɥʇıʍ pǝʞɹoʍ aǝʌɐɥ ı ʎןןɐuoısɐɔɔo 'ʇɔɐɟ uı ˙ʞɹoʍ ǝɥʇ ɟo ǝɹɐɥs ɹıɐɟ ɹıǝɥʇ ʎɹɹɐɔ ʇou sǝop ʇuǝbɐ buıʇsıן ǝɥʇ ǝɹǝɥʍ suoıʇɔɐsuɐɹʇ ʎuɐɯ uo ʇuǝbɐ s,ɹǝʎnq ǝɥʇ uǝǝq ǝʌɐɥ ı

˙pɐoןʞɹoʍ ǝɥʇ ǝןqnop ʇou ʎןǝɹns sı ʇı ʇnq 'pɐoן ʇɐɥʇ ʎɹɹɐɔ oʇ ǝɔɐןd uı ʇuǝbɐ buıʇsıן ou sı ǝɹǝɥʇ ǝɔuıs 'ʞɹoʍ ǝɹoɯ ǝןʇʇıן ɐ op oʇ pǝɹınbǝɹ ǝq ʎɐɯ ı 'sǝʎ 'ǝןıɥʍ puɐ 'ǝǝɟ do-oɔ ǝןqɐuosɐǝɹ ɐ sı ʇı ¿ʇɐɥʇ ʇɐ ǝsou ʎɯ dn uɹnʇ ı pןnoʍ ʎɥʍ ˙˙˙ʎɔuǝbɐ s,ɹǝʎnq ǝɥʇ oʇ %4 ɹıɐɟ ʎɹǝʌ ɐ buıɹǝɟɟo ǝɹɐ noʎ
1 vote
Voices Member, , Benton County, OR
Wed Apr 14, 2010
Priscilla

Number 1, perhaps asking Agents if they have a "secret handshake" agreement will only result in a "not us" since it's a secret ; )

Pricilla you can look through the Forum Questions (old & new) and you will see a number of Agents who as many have in the past are still stating they will not work with FSBO's, FSBO's are doomed to fail, those who do FSBO's are foolish, they blatantly prospect FSBO's under the Flag of 'helping" the consumer or "saving" the consumer from a huge error and of course those who flatly state they will not work with FSBO's (Those who "flatly state"are most likely the most honest IMHO).

As stated below there are a number of Agents who will attempt to assist the sale for the Commission you offer which is more than fair (it's not a great market for Agents despite the "we's at the bottom BS some have stated every day for the last several years")

YOU are the best judge of the situation where you are as there is not IMO a lot of uniformity in any issue or response dealing with FSBO's in this Forum....

As Keith points out often to FSBO's...
"It's not worth showing - you want a Realtor to work "both sides" of this transaction. Why would a Realtor choose to work with you, and do twice the work, for half the money? Makes no sense. It is simply economics. You work where the pay is the best."

Maybe it isn't such a secret, maybe you are correct so reviewing your situation and discussions with your local Agents may be your best way of determining the truth in your situation.

How are the Agent represented homes selling?

Dunes
1 vote
Alan May, Agent, Evanston, IL
Wed Apr 14, 2010
Priscilla - if your home would definitely sell, if you dropped the price $20,000 (assuming that were true), then you've found your tipping point.

Somewhere between where you're priced now, and that $20,000 drop, is your true market value. If that would make you the lowest priced home currently on the market... (note the word "currently"... meaning they haven't found that "market price" yet, either, since they're not sold yet)... then "so be it"... being the lowest active listing is no different than being the middle active, or the highest active... none of you are under contract.

If you're visible to Realtors (and the MLS is a great start), and your home meets the Realtors parameters (size, room count, price) and you're offering a reasonable co-op fee... Realtors will show your home. Period.
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Sun Apr 11, 2010
Hi again Priscilla!

I, too, was being tongue in cheek when I agreed you may be "paranoid" !!! haha
However, you are NOT being paranoid to question whether you are getting honest feedback from the few agents who have shown your home.

You're probably not getting it.

It is uncomfortable to tell a seller to their face that the buyer didn't like the home for whatever reason. What I would tell another agent, the listing agent, I wouldn't necessarily tell a seller directly. It's not my place to educate you (that's a generic "you", not you, per se!!). If I showed your home, and my buyer thought it showed poorly, or was overpriced (which I am sensing yours may be), I probably would not be brutally honest - like I would be with a listing agent.
So, the feedback you are getting may just be polite, but not useful.

As to your comment -

" If I dropped the price $20k (which unfortunately cannot afford to do) I'm sure it would sell.............."

Bingo!
It probably would sell then............Here's the thing, Priscilla - the buyers don't care what a seller "needs" to get....they will offer what they see as market value. If you are off by $20,000, that may very well be the reason for the lack of showings and interest...and, especially an offer. You are fitting the prototype of the "overpriced fsbo"...and, just being overpriced is a turnoff for agents and their buyers.

I am sorry you are in the position you are, but this market takes no prisoners, and what the seller needs to net has no bearing on the final sale price.

You sound like a lovely person, and I wish I could wave a magic wand, and make your home sell - but, no one can.......so, I ask you - do you have the option to remain, and not sell? If the answer is yes, then that may be what the outcome will be.

If you must sell, then I suggest you bite that bullet..lower it as low as you can go...and see if you can attract a buyer. There's no easy answer, and from what you have shared, I don't think the fact that you are a fsbo is what's really keeping you from selling.

I wish you the best of luck.........please let us know what happens!

Best wishes......
Debbie Rose
Prudential NJ Properties
1 vote
Barbara Q., , Bergen County, NJ
Wed Apr 14, 2010
Priscilla - I am not an agent and I have no objection to Sellers who opt to go FSBO. If you are offering 4% to a Buyer's agent and you paid a Flat Fee service...are you paying for your own ads? holding your own Open Houses? following up with the agents who do show your home?

Many listings in our area are at 5% total commission...some are at 6 and others (mostly new construction) are at 4%. I know that R.E. Commissions are negotiable, however, what's the "going rate" in your area?
May I ask, how much do you hope to save?
0 votes
Donna Forrest…, Agent, Charlotte, NC
Wed Apr 14, 2010
Priscilla,
There is no secret handshake however this topic comes up a lot at my team meetings. You are offering an awesome commission-well sort of- but the honest truth is that when we go under contract in a situation like this, it makes us uncomfortable. We pretty much become a dual agent and have to do the work of 2 agents. We are liable for the sale if anything goes wrong. Dual agency is also not disclosed because you are actually being represented by the Flat Fee company that put your home in the MLS. It makes us very uncomfortable to deal directly with the sellers. So yes, in my opinion, we do avoid FLAT fee brokerage. Not because we don't want to sell your home but for the liability and the trouble. We as professional agents that are still in business work super hard for every penny we earn. You would have to ask yourself Is that really worth the 2% you are saving? BTW- even full service agent commission is negotiable but the more you compensate the more the Realtor has to work with. May want to consider 7% commission (3.5% for each agent) in this market. Buyers are skittish and will look for any reason to get out of a sale-buyers remorse and you will need 2 very good experienced agents to get your transaction closed.
Web Reference:  http://www.TalkCharlotte.com
0 votes
Joe Manausa,…, Agent, Tallahassee, FL
Wed Apr 14, 2010
Priscilla, this is a great question. You can read my Trulia Blog article answering your question at http://www.trulia.com/blog/joe_manausa/2010/04/a_conspiracy_…

I wish you all the best in selling your home.

Joe
0 votes
Eric Egeland, Agent, Buffalo Grove, IL
Tue Apr 13, 2010
No secret handshake, but I will say many buyers agents avoid dealing with the flat fee brokerage listings (if there is enough other inventory to choose...which in most markets there is). The reason some agents avoid it, is they ultimately end up doing work for both sides of the transaction after the home goes under contract because the flat fee brokerage really provides no service. So often they need to handle the earnest money & seek direction of funds for the closing, be the point of contact for attys on both sides, follow up on all contingencies, etc, etc. ..there is a lot of work to be done after the home goes under contract.

Personally I'll show any listing if it is priced right, but I find many flat fee listings to be off in terms of price and/or more difficult to show (get a showing confirmation) than those listed with traditional brokerages.
0 votes
Brandon Schu…, Agent, Western Springs, IL
Mon Apr 12, 2010
Hi Priscilla,

I can assure you that there's no "secret handshake".

I'm guessing you thought that if you pay a flat fee broker, then offer a higher cooperating commission that it would sell your home. It really confirms the fact that there is either a lack of buyers, the price is too high, or you need a full service marketing plan.

Good Luck.
0 votes
Mack McCoy, Agent, Seattle, WA
Sun Apr 11, 2010
If they were out to gitcha, Priscilla, they'd come for the 4%!

Synopsis: Not enough buyers in the marketplace, sellers have to rely on luck as well as skill to get their homes sold. Even at giveway prices.
0 votes
Kathryn Macg…, , Westminster, CO
Sun Apr 11, 2010
From what I'm reading, you have a couple of perceptions to overcome: 1) When Realtors post their selling commission offer, they are bound by their code of ethics to pay it to the buyer's agent on closing so it is perceived as a solid offer; 2) You aren't a professional, so the work to close the transaction will probably be borne by the buyer's agent, who expects to have to educate both you and the buyer; 3) Buyers may think of FSBO's as homes where the commission savings should be shared, yet it sounds like you haven't lowered the price. There is still a tiny window left for the 1st time home buyer rebate. Good luck!
0 votes
Keith Sorem, Agent, Glendale, CA
Sun Apr 11, 2010
Priscilla
Realtors are not against owners selling without professional representation. In the end most of the them list with a Realtor anyway.

Here are the key issues that you are facing:

Market timing. We are in the tail end of spring market right now. Meaning that owners that need to move after school is out in June need to be in escrow NOW. I have some clients that are starting late and their anticipated closing date is now in MID-August...which is too late for many families to complete moves during the summer as some schools start in mid-August. So being late is going to cost you money even if you had a Realtor try to sell your home.

Market conditions - interest rates have increased over 3/8s of a point since March 31st. Rates go up, prices must go down because fewer buyers will qualify for more expensive homes. You should have been in escrow last week.

First time home buyer tax credit deadline is April 30th. With a great Realtor, selling in two weeks is possible, but you will miss this deadline because unfortunate there are many homes are the market and because your home is more difficult to show (no one knows about it, in comparison to homes marketed by Realtors), it will be lost in the shuffle.

It's not worth showing - you want a Realtor to work "both sides" of this transaction. Why would a Realtor choose to work with you, and do twice the work, for half the money? Makes no sense. It is simply economics. You work where the pay is the best.

To put it another way I can sell two homes, do half the work, and make twice the money--or I can try to sell yours.

Good luck.
0 votes
Priscilla C, Both Buyer And Seller, Lowell, MA
Sun Apr 11, 2010
Thanks, I appreciate the responses (and should have put a smiley on the "paranoid or out to get me" line since it was a little tongue in cheek).:)

We have lockbox, try to make showings on minimal notice but are actually living in the house and have kids and pets so can't have 100% open access, I think the pictures are good, and we have had maybe 5 different agents show the home so far, and they say it's been easy to show (though being paranoid I wonder if there is feedback I'm not getting :)). We stripped out all of the clutter and stored a lot of things, so it is as pared down as a "lived in" house can be, though I envy the vacant homes for ease of showing.

Price is always a question, according to comps we are at the lower middle of the reasonable range, and in fact lower than a lot of hones which have recently sold in the neighborhood, so not "way out there", but we are competing with what are still a fair number of foreclosures and short sales, which I think causes buyers to be looking for a "fire sale" price. We don't have a lot of room to move on price and not go into the negative profit range, so that is simply the situation we are in and I recognize it may be a slower sale as a result. Also the home is in good repair with many updates, but it is an older home (110 year old Victorian) so not everyone likes "character" over the benefits of newer homes, and I recognize that too.

I will probably stick it out another month as is, then if it doesn't sell, try another agent. If I dropped the price $20k (which unfortunately cannot afford to do) I'm sure it would sell, and I'm sure an agent would also be on board with that as they would still be getting paid, but at theat price it would actually be the lowest priced of all of the homes that are currently for sale in the neighborhood that are even close to this one in size, quality, location, etc, including a number of clearly inferior-should be lower cost properties. Sometimes "it is what it is"...I'm just kind of surprised we did seem to get a fair number of showings with my previous agent, which were almost all buyers agents letting themselves in with their clients, which is the same situation we have now except minus the agent, and now with a lower price. I thought I would try this to allow me to drop the price further which we have done with the savings from reduced commission. Thanks for your thoughts!
0 votes
Bill Eckler, Agent, Venice, FL
Sun Apr 11, 2010
Prisilla,

The reality is that there are many other opportunities in which agents do not have to deal with an "unknown!"

There may be a reason why agents are not flocking to your door but I doubt it has anything to do with a "secret handshake" or a "code ring!"

It may be beneficial to consider what your home has to offer.....Is it over priced? Does it have curb appeal? Is it in a desirable location?

The reality is that you may be a victim of the reputations of past FSBO's that are not reasonable, difficult to work with, and hostile & anti-agent.

Additionally, isn't the benefit of doing a FSBO that the owner sells the home.......why then would you require the assistance of professionals?
0 votes
Michael Russ…, , 75006
Sat Apr 10, 2010
Priscilla, if I had a buyer client in Lowell and your property fit their needs then your property would definitely be on the showing list! How easy is it to show your property? In my market we have a showing service and it makes it so convenient to schedule the showings. Time restrictions on showings, pets we need to watch out for so they don't get out, short windows of time to show,etc. make it more difficult and therefore restrictive. Review your marketing, pictures, virtual tour, flyers, signage,etc. Best of luck!
0 votes
Pat & Steve…, Agent, Westlake, OH
Sat Apr 10, 2010
In my area of the country (OH), most of the most of the FSBOs I have met have had the list price too high. In addition, they have not decluttered, depersonalized the home, have had too much furniture in comparison to size of the rooms, incomplete repairs, listing pictures that are not good quality, which show clutter, & deferrer work on your "curb appeal," etc. FSBOs need to think of & make their homes impersonal. Priscilla, I don't know if any of these items apply to you, If not, then I'd say your home listing price is too high.
0 votes
Sharon Poisel, Agent, Schaumburg, IL
Sat Apr 10, 2010
Priscilla: I agree with Debbie. FSBO or non-FSBO, 4% commission or other amount, I show and sell properties that meet my buyers requirements period. If they are not easy to show or have other hurdles I let the buyer know and take his/her lead on the decision to see it. I know I will earn my living by doing right by my client. So, yes, you may be paranoid.

On the other hand, I am not in your local area and do not know what type of activity is happening in the current market. Flat fee services handle things differently in services they provide so I also wonder if your agent is providing you with information on what is happening in your local market, including new competition, properties that go under contract, how you show/rate in comparison to the competition in your price point. You could possibly be seeing the same amount of activity and reaction as other homes or you could be in a (not so good) league of your own but how will you know if you are not getting market and pricing information? Hopefully, you interviewed several agents and selected the one who provided you with what you were looking for in the way of marketing, guidance, and all necessary input. Have you talked to that agent?

I think your comment about earning a decent commission vs squeezing out the "competition" of a FSBO is way off base...because your home under the the situation you described is not any type of competition to an agent. The bigger question you need to get answered is how do you stack up again your property competition on the market.
0 votes
Dan Tabit, Agent, Issaquah, WA
Sat Apr 10, 2010
Priscilla,
Chances are you are priced too high. I know I have little to base this on, except you were listed with an agent and it didn't sell. You are still listed on an MLS and offering an above market commission.
There are agents who as individuals do avoid limited service listings. The exposure they risk of dealing with a homeowner versus another professional discourages them. I know that the limited service companies will point to all the full service agencies who have sold their listings, and it does happen, but not as readily.
Chances are if you price your home below the current competitors and are willing to accept and offer in the range of other sold comparables, you'll find a buyer.
The other option is to find an agent who will market your property more aggressively than the first one did. Remember though, no amount of marketing will sell an overpriced home. You still have to price it right.
I hope things work out for you.
0 votes
Debra (Debbi…, Agent, Livingston, NJ
Sat Apr 10, 2010
Priscilla - no one is out to get you...so you might be paranoid! (your words, not mine!) :)

Seriously - You are listed in the mls.........you are offering a generous commission..........any agents who see your home as listed at a reasonable price will surely show it. Why wouldn't they? They want to make a sale.

Perhaps you are not priced properly - as an agent, I do not show ovepriced homes. I don't want to waste my time, or my buyer's time, with what appears to be an unmotivated seller.

There is no secret handshake...........the only handshake that excites an agent is the one they share when they put a deal together.

Is your home easy to show, or do you put restrictions on how it can be shown? Is there a lockbox? Are there high quality photos posted on the internet? Is iton multiple internet sites, or just your mls?

If agents are staying away.....I'd look inward at what you are offering..........your home must be priced right to attract attention. You are not seen as competition.................competition to what?
If I have a buyer..... and a listed home is suitable for them...I show it..............it's that simple.

Good luck!
0 votes
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