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Hollie, Home Buyer in Tracy, CA

What's your opinion about FSBO?

Asked by Hollie, Tracy, CA Tue Apr 27, 2010

What's your opinion about FSBO?

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FSBO is another great result of capitalism and the free market. If a consumer need arises that is not currrently being filled by someone in the private sector, or there is room to provide a better service or product for consumers, someone will fill the gap.

FSBO came about to some degree because someone noticed the periodic dissatisfaction of consumers with real estate agents who earn a commission on a home sale. FSBO brought a direct competitor to the table which is good. The status quo was challenged, good agents got better, bad agents missed out, and some home sellers saved a bundle by avoiding the payment of a real estate commission on their home. Just what the doctor ordered! Long live the free market.
Web Reference: http://www.ratewindow.com
4 votes Thank Flag Link Wed May 5, 2010
Hollie - I respect and admire FSBOs.This is still a free country. We get to make choices every day. You can make your own pizza, you can change your own oil, you can home-school your kids, you can choose to represent yourself in court and you can sell your own house. I don't really understand what all the fuss is about.
4 votes Thank Flag Link Mon May 3, 2010
Consider the fact RE agents will happily toss a 25-30% referral fees to another RE agent 2500 miles away as evidence there's some excess built into the system. Commissions in the UK run around 3% total. Just as litigious a region, same bubble issues as the states. Why the difference?

My best guess is since it takes a whopping couple hundred bucks and a week-long internet course to become 'qualified' as a real estate agent, there's an enormous excess in the field. I doubt anyone disputes that. As a result agents end up spending a disproportionate amount of time promoting/selling *themself*, which has absolutely zero value to a transaction, rather than focusing on where they do provide a value.

Unfortunately the powers-that-be in the industry have no problem with more and more agents working to try and churn houses. More agents = more dues, more subscriptions, more incremental sales. It took the mind-boggling statistic that 2% of all CA adults were licensed real estate agents before this state FINALLY tightened things up a bit. Crazy.

The lucky seller gets to pay an inflated commission to cover not just the useful services of agents, but also self-promotion costs, desk fees, monopolistic MLS fees, NAR pseudo-bribe money to the government, and so on. In fact, that lucky seller gets to pay that excess to TWO agents!

I don't think many people believe RE agents are getting rich out there. Absurd commission are the result of a broken, inefficient system where far to many hands get in the seller's cookie jar. Doesn't mean it's any individual agent's fault, but it's also is no defense for an absolutely absurd $20,000 in fees to sell a $300,000 house.
3 votes Thank Flag Link Thu May 6, 2010
Freddy,

I would tend to agree with you on a lot of what you have to say. You do seem to be the exception to the typical FSBO however. You have done your homework and have been through this before so you do have the upper hand on going the FSBO route.

It has been my experience that most that choose to go the FSBO route do it because they don't want to pay a brokers commission. Understandable, it is a large amount of money. I'm not going to go into the break down of commissions here. What I do want to point out is that usually the seller puts that commission in their own pocket. They don't pass it on to the buyer. A buyer should pay less for a FSBO but many times does not.

What I would like to see from FSBO's is rather than bash (and I'm not talking about you here) agents and insult them with anyone can do it or it's not rocket science, why not help police the industry and advise what to look out for when choosing an agent if they choose to go that route. Many times buyers and sellers will complain about the agent but will do nothing about it except put that experience on all agents.

Not all agents are good agents I will be the first to admit that, but there is value in using an agent that knows what they are doing and knows the market and what to look out for. Experieced agents have seen it all and can spot a BS offer or ward off problems long before the come into play. Good agents can get houses sold quickly and that in turn can relieve the sellers stress and in some cases make the tranaction a little smoother.

If you are working with a bad agent, then either go to their broker and resolve your issues or fire them and get one that will work in your best interst. Don't sign agreements that are not in your best interest or make you pay for services they didn't provide. Know what you are getting into and make sure the agent does what they were hired for.

Best of luck to you with your sale, may it be quick and easy.
3 votes Thank Flag Link Sat May 1, 2010
and now it is time for freddy and mack to start a new thread and take their back and forth to it.

this has devolved to a dialogue that is tiresome.

i hope hollie got from this what he/she was seeking.
2 votes Thank Flag Link Fri May 7, 2010
I sold six of my last eight cars myself. I traded only two in to car dealers. Houses are just another commodity.
If you can sell, understand math, marketing paperwork and disclosure, you can do it. If you can't you can't. Honesty is the best policy. Point out what is wrong as well as what is good about your house (or car)

Reading Hollie's comments on this thread, it seems like you have chosen a "limited service" listing rather than going naked FSBO. (Will Trulia's filter allow that?, I wonder>)

Perhaps you can ratchet up your agent friends workload (and compensation ) if the need arises.
2 votes Thank Flag Link Tue May 4, 2010
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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Debbie,
You would be correct about the other thread...I have not yet decided if I will sell my home FSBO or use an Agent..Im not against Agents, im against excessive commissions. So once again I will spend my time interviewing potential Agents and if I cannot find an Agent that will list under my terms, then I will develope a Marketing plan to sell my home and when it sells (and it will sell) I will be the first to post it on here Debbie with the amount of days it took and the actual sales price.. And I will slap a very large SOLD sign right on top of the FSBO sign so to send a message to all sellers that selling a home can be done by the Home Owner if thats what it takes to get the job done. And no, selling 5 of the last 6 homes FSBO does not make me a professional Agent, I'm just a blue collar worker trying to sell a home under reasonable terms...And the last time I checked a "pre-qualified" is not an in-depth look at a potential buyer but a Pre-Approved is much more in depth...Either could fall through at the last moment for reasons only known by the mortgage holder, but the Pre-Approval is more in-depth...So although I do not have your knowledge as a licensed Agent (nor did I say I did) I have a pretty good knowledge of how to sell a home FSBO...So I would say that makes my opinion and advice count to people like Hollie who is just like me, trying to avoid unreasonable sales comissions...
2 votes Thank Flag Link Mon May 3, 2010
Mack,
As I said my intent was not to slam your professional but since you intend on making it sound like selling a home is some huge feat that requires years of Education then you bring it on yourself for me to bring you back to reality. Truth be known the backbone behind the sale is not the agent, it's the mortgage company that handles all the paperwork once the contract has been signed and handed over to them to process the legal documents..The Mortgage dept in my opinion does far more work than the agent, and I would assume does actually require more than a HS Diploma to process the paperwork needed to close the sale..What do you do Mack? You market yourself to potential sellers/buyers to use you to either list a home or buy a home..You list the home in the MLS and put the sign in the yard, possibly take lots of photos and if your a good realtor you give a virtual tour online..wow!! Then you setup appointments and unlock the door and walk through the home with the buyers/sellers and say a lot of "thats nice" or "thats real granite" or "carpet looks new"...then when the potential buyer ask you if you wouldnt mind writing up a low-ball offer and waste the sellers time you probably say.."what the heck, all they can say is No"..Then after months go by with no real quality offers you tell the homeowner that they should lower the price..sound familiar Mack? It should, because most of what Im saying is the typical day in your world of selling homes...So keep telling yourself that you are doing something most cant do, tell yourself long enough and you start believing it...Truth is you offer a needed service, but it's not a service that only a licensed Agent can do..It's a service for those that either dont have the time or the patience to do themselves, and it's that simple!!
2 votes Thank Flag Link Sun May 2, 2010
Mack,
Wasnt trying to slam your profession...The question was whats your opinion about FSBO and my opinion is anyone with a brain can do it themselves if they have a little patience and they and have fairly good communication skills..Not everybody does, and for those I suggest hiring a professional, and not everybody has the time to deal with showing their homes because everybodys busy, once again I would say hire a professional..Just like any profession it only takes a few bad apples to spoil the whole industry...With that said, I do think Realtor fees/commissions are excessive and I understand the Agent selling the home does not get 100% of the commissions, I understand the money is divided between many involved..And thats where someone someday is going to come along and change the whole Industry by cutting out so many people splitting those commissions and eventually lower the cost by eliminating so many middle men...So maybe I come off a little strong against using a Realtor simply because I read the scare tactics posted by a few Agents and thats what they are ,nothing but tactics to keep sellers from taking control of the sale of their home and having an edge over other listings currently on the Market..As I said before it is possible that I hire an Agent to sell my home, but you can bet your life savings it wont be at 6%.. I will sell it myself before spend $20,000 in commissions to sell my home...Thats ridiculous!!
2 votes Thank Flag Link Sun May 2, 2010
- What are you as an agent going to do that we the homeowners cant do?

Nothing, if you have years of experience selling homes, rather than whatever it is you do for a living.

- We live in the home so we know everything about the home and can inform the buyer about every upgrade, every potential problem, the schools..etc..

See above.

- Nationwide I see home values declining but I dont see Agents dropping fees to help offset the declining values...

Nor do I see home sellers offering to raise fees to help offset declining incomes.

Look. You've sold a few homes. Congratulations. In my office, we'd refer to you as, "Rookie."

I don't mean to diminish your accomplishment, but, it is, after all, something a caveman can do.
2 votes Thank Flag Link Sat May 1, 2010
Freddy,
I love feedback such as yours. I literally crave it because I've only been in this business for a little more than a year and its honest feedback such as yours that is one of my best teachers.
I absolutely agree with you regarding the pain involved in a declining market with the traditional commission structure. And I work for a traditional brokerage. Absolutely great office with the best broker in the business and very supportive agents. But we have all seen the pain involved with the sellers.
I think you are right that the RE industry needs to change. I have no problem with a flat-fee structure.

One thing I want to make clear- I came into this business during one of the roughest times in the industry so the greed that you are talking about is non-existent, at least in my office. These very hard working people are struggling just like everyone else and most of them are very good at their job and genuinely care about the people who hire them.
I know a lot of you get sick of hearing this( so do I) but good agents work their butts off. I haven't been in this industry during the times of easy money, only during a time when we have to work even harder( which is just fine by me).

I guess what I am trying to say is I see both sides.
Sellers are struggling enough as it is and the commission paid to agents involves real financal pain.
Good agents that truly go above and beyond for the people who hire them earn every penny. Honestly, I didn't believe it until I started doing it.

I think one of the problems is that too many people have their hands in the cookie jar ( 4 people on every transaction and with referral fees sometimes more). I don't know what to do about it but I think that is part of what leads to what may think are excessive fees.

Anyway, thank you for your honest, informative feedback. Agents need to hear this.
2 votes Thank Flag Link Sat May 1, 2010
Hmm. Cavemen selling homes. What a concept! What I'm reading between the lines here is some history of a bad experience with real estate agents. It's true that the bar for becoming an agent is set too low. I agree, many agents I've met on the opposite side of the transaction have been more a hindrance to the sale than helpful and of value. No argument there. But that's not a fair picture of our industry. The vast majority of transactions are done by 10% of the top agents. That's a historic fact verifiable with MLS statistics. When approached professionally, there is immense value in a Realtor's contribution. Having sold 5-6 homes is not a reasonable sample with which to "color" an entire industry. Freddie, I'm guessing also has some business background, skills and talents in marketing or selling that the average seller does not either have, or have time to fool with, having other full-time jobs. Just guessing here.


What can an agent do for you? Hmm let's look at last week: I saved a home from falling out of escrow because ridiculous appraisal problems needed challenging. The appraisal came in $20,000 low. The lender said, "seller reduce your price." It wasn't valid, it was an appraisal error, but it took 8 hours and dozens of phone calls and experience to negotiate a reconsideration for my seller that saved him $20,000 in lost equity on an FHA appraisal (an FHA appraisal stands in file for 6 months) . I'd love to see a caveman do that. : )
2 votes Thank Flag Link Sat May 1, 2010
Michael, if I were to Market my home FSBO I would first get my home in the best possible condition I could, then I would not rely on over-inflated prices that some agent has told the poor homeowner that his/her home is worth just to get them so excited they will list with that agent, I would pay the $350 to get an accurate appraisal and then I would show every potential buyer that appraisal and I would deduct the typical 6% off that appraised value and use that to my advantage to show that buyer I am saving them money! I dont want to sound Anti-Realtor because I'm not, but I do think alot of Realtors have integrity issues and I also think the commisions are excessive! Obviously I am on a website speaking my mind and the majority of readers are probably Agents and I expect to get negative feedback from those Agents because this is how you make your living...But I am just stating the truth and my past experience with selling homes FSBO and possibly pointing out the positives and negatives of FSBO vs Realtors..I'm a busy guy, I would love to turn my home over to a qualified agent and let them do their job and sell it, but the fact is the comissions are too high and we are in a depressed economy and everyones looking for a great deal and if that means cutting out the middle man and rolling up my sleeves once again to sell my home, then thats exactley what I intend to do..Yes selling FSBO is frustrating, but no more frustrating than dealing with agents who dont do their job and bring non-approved buyers in your home that are merely curious and then fail to communicate with you and inform you about the buyers reaction to your home...If you have the time and the patience...I say list it yourself and save the buyers money..If not choose your agent wisely because some are pros and some are cons!!
2 votes Thank Flag Link Sat May 1, 2010
Dunes - Laughing with you. "Most" agents have sold 1-10 homes. But I think my friend Mack was trying to say, there are many good agents who have sold hundreds of homes, I know I have - and have done so without a single lawsuit affecting my seller. That's not to say I didn't, fend off literally hundreds of potential problems, potential lawsuits, unnecessary losses for my clients and losses of opportunity with my experience. Many times, a very self assured FSBO has said to me, "I did just fine without an agent". And occasionally, that's true. But it's pretty hard to measure what "might have been".

The number one reason a buyer is attracted to a FSBO is because they perceive that the seller isn't paying a commission, therefore can AFFORD to give them a bargain price that cuts the commission out. So if they BUYER is getting the benefit of saving the commission, by getting a lower price - then WHY would a seller not take advantage of liability protection, services, convenience...safety...and the negotiating advantage of having a professional representative who isn't emotionally involved with the home - be able to create a negotiation buffer and strategy on your behalf - essentially, for free? Doesn't seem logical to me. The truth of the matter is, and this is proven time and again - at least most if not all of the commission savings is lost to the FSBO in either extra time, effort, expense, or lost negotiating advantage. Get a pro - but choose a real one with lots of experience to offer! IMHO
2 votes Thank Flag Link Sat May 1, 2010
Personally I have sold 5 out of 6 of my homes FSBO and have never had a problem..Nobody knows your home better than you and if you are completely honest about all the good and bad about your home the buyer in my opinion will appreciate your honesty and you are more than likely not going to get the ridiculous low-ball offers that you get when you use a Realtor. I am not opposed to using a Realtor that agrees to your terms, such as demanding whomever they show your Home to produce a Pre-Approval letter from a Mortgage company..Most think it's overkill but from what I am told upwards of 50% of Home Buyers Financing falls through so it has to be done to keep from wasting the sellers time! If your home appraised for just say $300,000 and a Realtor wants 6% in commissions thats $18,000 you could pass on to the buyer..thats a pretty good incentive to the buyer!! On the other hand if your not good at communicating and lousy at sales and you just dont have the time to deal with buyers..I suggest you find a true Professional Agent that is a work-a-holic and not someone who is just looking to list your property and then every weekend that Agent is on the Lake and hoping another Agent sells the property..My Home will be ready for sale in June and I also will either find an Agent or do it myself once again!!
2 votes Thank Flag Link Sat May 1, 2010
Hollie you can also use sites like these to find Forms.......

http://www.businessnation.com/library/forms/california-busin…

http://resources.lawinfo.com/en/Free-Legal-Forms/Real-Estate…

http://www.profpub.com/

I'm not recommending you take this route nor am I recommending any of the sites, but if you put some effort into it there is no reason you should not be able to find the forms you would need.

My advice....Don't risk the sale of your home by trying to save a couple hundred dollars for Services (Paperwork) a Flat-fee Service provides...Many include the paperwork with the listing options they offer

Use the internet and check out so Flat-Fee services in your Area.....If after 114 questions asked over a years time you do not know where to find RE forms then I'm suggesting you need to hire an Agent or Flat-Fee Service to assist you....

With all these questions I'm wondering if you work for Trulia creating site traffic...lol
You've been buying, selling, worried about mold, in different markets/cities, got loans, inspections, contingencies and more..
That's great, the Agents have been very Professional and helpful for the most part in answering your questions please feel free to ask 1000 more but we should be past "What do you think of FSBO's" and where to find RE forms by now.

5 Minutes reading thru the Forum will give you a look at Realtors opinions on FSBO's and 5 minutes doing a google search for RE forms would answer any questions on where to find them.



Dunes
2 votes Thank Flag Link Wed Apr 28, 2010
the biggest difficulty you have is that real estate agents will purposely steer their clients away from your listing.
as you can see from most of the responses below!
2 votes Thank Flag Link Tue Apr 27, 2010
It is wonderful that people have choices in how they sell their property. FSBO (For Sale By Owner) is one of the choices owners can make. If you truly have all the knowledge you need to sell your property yourself then FSBO can be a good solution. Unfortunately, unless you are involved in regular real estate training which would include: real estate law updates, contract knowledge and updates, advertising and marketing feedback and the like...the seller is at a distinct disadvantage when selling FSBO.

Additionally, in Florida (not sure of other states) you have to be listed with a licensed REALTOR member of MLS, to have the property listed on the Multiple Listing Service. So MLS is a marketing avenue not open to FSBOs. MLS listing is often considered one of the most effective marketing options for selling a home. By not being included here the FSBO is at a distinct disadvantage.

Lastly, you shold consider who buys most FSBOs. They are people also trying to save a buck by operating outside of the normal channels for home sales. As a result, they often view the FSBO list price as being 6 to 7% over priced (since they are not paying a real estate sales commission) and will start by discounting the price by this amount before they decide what to offer. So, who is really saving the commission? Probably not the seller.

In conclusion do I think FSBO is a good way to go? No, probably not for most sellers but it is an option that should be considered. If nothing else, the homeowner who tries to FSBO their home gains a whole new respect for the job of a professional REALTOR.

Brian McGreevy, Broker/Owner
Sarasota Home Realty
1 vote Thank Flag Link Wed Oct 6, 2010
Mack, I went ahead after interviewing several agents and decided to once again take control of selling my home and your not going to believe this..It took 14 days after I put the sign in the yard to sell my 6th home FSBO!!! Now once again Mack I know this does not make me a Pro like yourself and once again this just makes me "lucky" according to you.. But I have to believe it was how I presented the home, how I marketed the home & how I was able to put the Realtor Commissions back into the pocket of the BUYER! Oh and Mack...I once again requested that anyone I showed my home to must come with Pre-Approval letter in hand and guess what, I must have had 20 calls on this house and once I demanded that letter only 2 people made appointments but it weeded out the non-serious buyers and the 2nd serious potential buyer brought the letter and bought the home. So I know you realtors think we are missing out on potential buyers by requesting that letter,but if you demand that letter you are weeding out people who are really not ready to buy and saving the home owner a tremendous amount of aggrevation...So to anyone wondering if selling FSBO is complicated the answer is NO, and sometimes it's a pain in the rear and sometimes you just dont have time to show your home and you have to make time...But the end result is the same..Your home will sell!!!!
1 vote Thank Flag Link Sun Jul 11, 2010
Well, Linda, consumers don't care - people buy clothes made by seven-year-olds in near-prison conditions so as to save a buck; home sellers aren't so concerned that agents have bills to pay.

I am willing to bet that there isn't a single posting on all of Trulia from a consumer suggesting that real estate agents, given the difficult economy, should be paid MORE than their typical rate, rather than less.

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Another thing about FSBO-ing.

Most FSBOs, as Debbie Rose and others note, are actually quite willing to pay a Selling Agent commission. So, for the most part, the FSBO is working for half the commission.

Now, I've seen a lot of new agents struggle, and one of the reasons is that not many people want to hire a rookie or inexperienced agent to list their home and undertake the marketing and negotiating responsibilities.

But what is a FSBO, if not a "rookie" or inexperienced real estate salesperson? Essentially hiring themselves, when they wouldn't hire anybody else with (a) similar (lack of) experience?

At least some rookie agents are out there, looking at properties, attending weekly office meetings, perhaps even being mentored. FSBOs? Not so much in the "continuing education" portion of the program.

So the FSBO is hiring someone - themselves - to market their most valuable possession; someone who nobody else would ever dream of hiring. No offense to my friend, Freddy, but do we think that there are any FSBOs begging him to "get licensed" so they can list with him?
1 vote Thank Flag Link Thu May 6, 2010
Wow...Bruce, throw away all my answers because you are dead on!! And you were able to sum it all up in just a few sentences..thumbs up to Bruce!!!
1 vote Thank Flag Link Thu May 6, 2010
I believe if you have the time, energy, and resources to expend selling and marketing your home have at it, but be aware that it’s a job, and without the full commitment, your results could be less $$ than favorable.
1 vote Thank Flag Link Thu May 6, 2010
And Dunes the $20 TruliaPRO and holder of the highest honor (VIP3 Badge) Trulia bestows on GREAT Contributors making my opinion of course much more valuable than the lesser Badge combination and the fact I'm not a Mayor proves I'm not on the Trulia Cheerleader Squad....I will now share that recognized and rewarded wisdom

Without salespeople FSBO's wouldn't exist!


Now ya can point out that without Agents there would be no ice cream ; )
Dunes the $20 TruliaPRO
1 vote Thank Flag Link Wed May 5, 2010
Actually, Bruce, "salespeople" are the "great result of capitalism and the free market." Without capital and markets, there are no salespeople, just FSBOs.
1 vote Thank Flag Link Wed May 5, 2010
Have you ever try to sell anything to anyone? How well can you negotiate? Are you comfortable taking criticism? You know what I mean. You should know what you can do.
1 vote Thank Flag Link Wed May 5, 2010
Thank you all.

The other reason I want to do FSBO is the appraisal value. We need to pay $30k~$40k commission if we don't do FSBO. If we reduce the price by $40k, there would be no appraisal issue. If we are lucky, we may only need to reduce the price by $20k.
1 vote Thank Flag Link Mon May 3, 2010
Freddy - It's considerate that you are dispensing real estate selling advice to consumers based on the 5 homes may have sold............especially the part where you stipulate the buyer MUST be in possession of a "pre-approval letter", versus a pre-qualification letter...........May I assume you think a pre-approval "letter" is a mortgage commitment.....subject to a contract of sale for a specific home and acceptable appraisal?

What you don't realize is, you will be losing out on some very well qualified buyers if you insist on having everyone be in possession of a commitment in advance of making an offer. Even with the "approval" in place, the buyer will still have a mortgage contingency in their contract, and the home will still have to appraise out. So, your pre-approval letter may give you a sense of security, but it is a false sense of security, as nothing trumps a commtiment other than a real written final commitment, following an acceptable appraisal.

But, Freddy know best, as he has sold 5 homes !

Freddy, it's great that being a fsbo worked out for you - I mean that........but you're really not in a postion, imo, to give advice to others who may want to make the same journey...share your opinions, sure that's fine, but to state something as though it's an absolute necessity, which you have done several times now,may be misleading to others.

By the way -
Isnt there another current thread on trulia where you are asking about finding an agent to list your home, or did I misread that?
1 vote Thank Flag Link Mon May 3, 2010
IMHO (as an investor) from a buying perspective, I don't see much of a difference. I see lots of overpriced properties in several markets whether FSBO or listed. Also, I'd approach the purchase the same way whether or not the property were listed.

Yet, I've observed that roughly 10% to 30% of the FSBOs tend to be priced at least 3% (often 10%) higher than similar listed properties in a market. Those sellers tend to be less knowledgeable about the overall selling process, less prepared to work the numbers, and less likely to negotiate (at least without a little hand-holding at first). However, a buyer can overcome all of those obstacles by building a rapport with the seller, and this is where buyer representation can help out quite a bit.

Personally, I care less about whether a property is FSBO or not, and more about whether the seller is motivated to sell or not.
1 vote Thank Flag Link Mon May 3, 2010
Sorry Debbie,
There I go rambling on about what moves me to buy and giving tips on my techniques that could be helpful when selling and I forgot Im talking to Professional Agents that have been trained to sell. And Im not saying that in a disrespectful way...you all really have been trained to sell. So enough of the back and forth disagreements concerning FSBO sales, the Agents have valid points and I myself have valid points. To sum it all up once again, if you have the time, if you have fairly good organizational skills, if you are a good communicator and have patience and a little knowledge of Marketing then by all means list your home FSBO and save the commissions. But if you are extreemley busy, dont have time meet posible buyers (and you might have to speak to several), are lacking in Marketing and sales skills then seek out the number 1 Agent in your area and hire that person. Personally, if I were to hire an agent I would look very close at the Agents actual sales numbers. Many Agents are number 1 because they have more listings and their peers actually sell their listings and they get the credit..Some might say "who cares, the house got sold"... I care! If I am going to spend upwards of 6% commissions for selling my home to an Agent, I want the Agent that is doing the selling and not the Agents that make a career out of getting as many listings as possible and then spend their weekends at the Lake wondering why everyone else has to work weekends...Find an Agent that is a work-a-holic, one who's answering questions on every website you go to, one who spends the time making a really nice vitual tour of their listings, and one that holds open houses as part of their weekly routine...And last but not least, put it in your contract with the Agent that any prospective buyer must submit a "Pre-Approval" letter from a Mortgage Bank prior to showing the home, not "Pre-Qualified" but PRE-APPROVED"...believe me there is a difference and it will save you lots of time and frustration if they do this...And if they dont...FIRE THEM for breaking the agreement !!!
1 vote Thank Flag Link Mon May 3, 2010
and i guess i'd like to know if we answered hollie's question.

freddy, believe me, your fortitude in the process of selling is the extreme exception...just as most folks can buy a can of paint and have a go at it...few get the results that a pro does. if YOU can, that doesn't mean you are doing folks a favor by encouraging them in your path...i can speak from first hand personal experience that many folks are ill equipped to deal with the many moving parts of a sale. incompetent even.

have a look at my FisboSanDiego.com website. it was conceived for the seller who is willing to pay a buyers agent if they can produce a contract. i don't promote it too heavily anymore, i learned that most of the clients were not keeping their files in order and getting all the T's crossed and I's dotted...even after i gave them ALL the disclosures, marked up for signatures, and told them to get them back before they delivered a deed to escrow. i offer the service now only to persons who i am confident can compose a proper file and who have strong business skills. this is not a trade for the naive. the consequences are too steep.

another issue that should be raised is the wisdom of dealing unassisted on low priced properties...if the sales price is $45k is it worth it to save $2,500? for an $800k shack, sure, but the law of diminishing returns says that sooner or later you really should let someone else do the scut work and go surfing or quail hunting or whatever.
1 vote Thank Flag Link Sun May 2, 2010
Well, I have to say that vacations are a rarity for me. The last one I went on was to Disney World with my 4 kids 2 years ago and that was the first one in 6 years. And by the first night I wanted nothing to do with the little buggers. We still managed to make some great memories and I love Disney World but I was exhausted when I came home. Anyway, I digress....

I haven't agreed with everything Freddy has said. His perspective is obviously different than that of a full-time agent. But we can't deny how much that commission is costing sellers these days, not just financially, but emotionally. And I think that discussion with sellers/buyers, whether we agree with their perspective on this industry or not, is of utmost importance. Frustration toward this industry is real and we owe it to the public to listen. God knows we defend ourselves enough and blow our own horn enough and tell them how much they need us enough. Sometimes, we really just need to shut up and listen.

One of my favorite sayings is Speak without offending, listen without defending. Of course that goes both ways and it is very hard to listen to consumers generalizing (sometimes fairly and sometimes unfairly) about our profession but listening is a huge part of our job and we need to learn where that frustration is coming from. After all, these are the very people we want to hire us.
1 vote Thank Flag Link Sun May 2, 2010
Freddy - you had me at hello...........but lost me at "Nationwide MLS"..........actually, I kind of dropped out at "the mortgage dept. does more work than the agent"..........

it is remarkable you sold 5 homes.........here's to the next 5
1 vote Thank Flag Link Sun May 2, 2010
- So I guess what I'm trying to say if this makes any sense, is speak less of what the potential home buyer see's, and more about the potential the home has to offer that they might not be able to vision without your help...

It doesn't, but if you're really interested, we can try a correspondence class.

All the best,
1 vote Thank Flag Link Sun May 2, 2010
Finally Mack,
Something we agree on!! If a potential buyer goes through the process to get Pre-Approved, then at first sight wants to actually take a tour of the home...let the home sell itself! Theres nothing worse than an Agent or a Home Seller trying to over-sale the home..Instead of trying to sell the home, try to sell the dream or should I say the potential the home could be used for. Maybe the home has a pool for possible family gatherings, maybe the home has an extra large bonus room for a possible gameroom to entertain friends, maybe it has a workshop so that someday you can open that small business we all dreamed about having...I know that every time I bought a new home I was more interested in how I could use the new home to fullfill my personal goals and less on the astetics of the home...But of course you are talking to a "Do-it-Yourselfer" kind of person thats is not afraid of work and doesnt mind home projects...So I guess what I'm trying to say if this makes any sense, is speak less of what the potential home buyer see's, and more about the potential the home has to offer that they might not be able to vision without your help...
1 vote Thank Flag Link Sun May 2, 2010
- The Mortgage dept in my opinion does far more work than the agent,

Freddy, I mentioned on a related thread that amateur salespeople don't know how to sell; mostly, they talk about the wrong things and they don't know how to keep their mouths shut.

And, in your haste not to slam my profession while beating on it with whatever you had in hand, you helped to prove my point here.

Even mortgage people don't think they do more work on a sale than real estate agents do - ask them!

- All I know is on every FSBO sale I marketed each home to the best of my ability without listing with the Nationwide MLS

And the thing is, Freddy, amateurs often don't know what they don't know.

Again. Sincere congratulations on selling five homes. It is remarkable, and you are to be congratulated.
1 vote Thank Flag Link Sun May 2, 2010
freddy,

while our friend Mack might need some decaf, you are mistaken as to what happens after a property gets to escrow. the mortgage company does not process the transaction. as well, you oversimplify the tasks leading to an escrow or passing or settlement, depending on the state you are in.

the topic here is FSBO. the poster asked our opinions. we offer them with the caveat that they are OUR opinion. since the question was vague we take a stab at it with some guessing as to what prompted the question. that's the nature of a forum like this...some questions require some faith that we are at least getting close to the meat of the posters needs.

while you might think that the trade is overpaid (and maybe full of ourselves) the fact remains that the many attempts to change the compensation structure over the years have been largely met with big ho-hums. i know, i tried like hell to do it myself. i can show you file after file of FISBO's who tried to go it alone and were smart enough to call me (or anyone) when they got to their comfort level.

for those willing to put in even a modest effort, there are many ways to save commission dollars and to sell a home without going it alone. those who do not do so are making their own business decisions...they don't need your second guessing. for those who do, i think the effort is well worth it...but i learned the expensive way that many have better things to do than deal with the many nitty gritty details that come with the territory.

don't make the mistake of thinking that just because you can handle a sale that the next guy can too. some folks are just not qualified. for an example of one see the thread in Trulia http://www.trulia.com/voices/Home_Selling/Is_there_a_hour_co…

someone tried to do it themself and is already in trouble. while you might have been capable of dealing in that case ...clearly, this poster was not. it may cost her some real money.
1 vote Thank Flag Link Sun May 2, 2010
- Wasnt trying to slam your profession..

But thought you'd give it a go, anyway.

Look, I don't much care, Freddy. I have often stated here on Trulia that real estate agents would do better by going after the eighty percent or whatever that want to use them, rather than attempt to convert the other twenty or so percent. In a lot of ways, residential real estate sales, because it is a relationship-based business, has many analogues to dating: why harass someone who doesn't want to go out with you, find somebody who does!

But I think it's worthwhile to note that amateurs, in any field, do amateur work. It is remarkable - people talk about it, it becomes a center of conversation - when amateurs do professional-grade work.

And the silly thing is that when an amateur does manage, by some stroke of genius and/or luck, to do professional-quality work, much of the time they turn around and say, "See! Any fool can do this!"

To which I say, why let a fool take on the most important transaction of your life?
1 vote Thank Flag Link Sun May 2, 2010
my opinion is that if you happen upon a property you like AND it is a FISBO AND you can do all the stuff an agent does AND you have access to a lawyer who can structure it for you AND you are comfortable with the price you can get a nice new home.

really it depends on who the FISBO seller is. most are honorable and simply want to save themselves a commission. can't blame them for that. others may be experienced sellers who don't need an agent. if you don't need one, why pay one. other may have an especially nice property that sells itself...there are any number of reasons someone might decide to go it alone. many try and give up...most too soon...but, again, can't blame them for trying.

all that said, i do know of several investor/flipper/sellers who are as crooked as a dogs back leg and who are smart enough to to stay away from agents who have a special place in their hearts for keeping things legal and doing things by the book...generally. certain sellers simply want to get over on you...the solution to that is to get a lawyer to review and mark-up any sales contract you might consider entering into. the cost for a legal review is not high and is MANDATORY for all sales absent an agent...and sometimes advised then as well.

good luck,
1 vote Thank Flag Link Sun May 2, 2010
Opinions are like Elbows...most people have a few??
~~~~~~~~
whew.. that brought up an ugly mental image.

few = 3
couple = 2

I don't know ANYbody with a FEW elbows.
1 vote Thank Flag Link Sun May 2, 2010
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
- and I actually trust Redfin that they're not doctoring responses to make things look good.

I don't think they "doctor" responses, either; I just think that their agents aren't as knowledgeable about houses as more experienced, full-time, out-in-the-field agents.

Sure, they may have one or five or some number. But I know for a fact that one of their "showing agents" - the person who is supposed to know about the homes they show you, be able to essentially pre-inspect, provide insight as to upgrade potential, quality of finishes, things that affect value greatly in my market - one of them, who is a darling and wonderful person, has a side business as a florist, and has never communicated to me any particular knowledge about being able to do some detective work BEFORE you, the buyer, get their hopes up about a particular home.

Redfin has done us "full service" agents a great favor - before, people thought we cost, well, a full commission. Now the public sees that the Selling Agent only gets half, and half of that is going to go to Redfin. So now, you're about 98.5% there (in some markets), and you're hoping that the field agent is worth your saving that one-and-a-half percent.

And if you think they are, that's fine with me.

Good (heck, DECENT) real estate agents know homes. Many of us own and operate investment property, many of us come from design and construction backgrounds, and I think most of us (on the residential, owner-occupied side of things) actually look at houses, not just as boxes with commissions attached, but as homes that people will be using as the stage setting for their lives.
1 vote Thank Flag Link Sat May 1, 2010
To me a interesting thing is the 6% fixation as that my (standard/sand in the line/it's been our traditional fee) and yet the average fee Nationally since 2000. "Over the past decade the average commission rate has remained relatively steady between 5.0 and 5.5 percent"
http://www.justice.gov/atr/public/real_estate/save.htm

I think the simple questions for many may be....Can you handle X clients? Do you have or are you even close to having x clients? Do you need X clients?

Will lowing your commission or finding some other working model get you clients?
Because what's the bottom line in all honesty? Making a living through making a profit which is hard to do without clients.
1 vote Thank Flag Link Sat May 1, 2010
Joan, thank you for your comments!! I probably should say I also have really good friends that are Agents and I see first hand that they are suffering financially due to lack of sales..We are very fortunate here in the State of TN because although it is sluggish, we have not experienced drastic home values decreasing and we have lots of new industries moving here from other States due partly because Tn has no State taxes..We have a little higher sales tax but no State tax...If I were a realtor in this Market and I planned on this being my career for the rest of my working years, I would start thinking outside the box and figure out how to sell properties with lower commissions and make my money in higher volume sales...The World is headed that way in just about every product sold on the Market..New Cars are now being sold on Ebay with lower profit margins but higher volume sales, not saying Homes are to be sold on Ebay, but what I'm saying is if I were a licensed broker I would get my brain to thinking outside the box and I would develope a new way to sell properties with lower commissions and higher volume sales and I would leave my copetition in the dust!! That is until they figured out how to copy my idea..lol..Have a great day!!
1 vote Thank Flag Link Sat May 1, 2010
I think that you will see more FSBO's come on the market however, I think that it will be due to the current amount of possible shortsales. Sellers will try it on their own to avoid the short sale or to bring less money to close. Some will be fortunate enough to be successful most will be over their heads and not sure what to do. It's not as cut and dry as some think. You can see it already here in the Q & A. There are alot of FSBO question asked lately. Asked of Realtors by the way : ) (There are plenty of agents that don't know what they are doing either and hopefully with the way the current market is, it will weed out those that are in this business for the wrong reason).

There are situations where knowledge is important and that knowledge comes from experience and training. Many agents take additional training to keep up with current issues. There are laws and rules involved that FSBO sellers may not be aware of. I think that problems are going to occur as more sellers try to go FSBO and things will need to be regulated in some manner. License law for agents is already changing. All agents need to take additional training and new agents have new requirements for the state of Illinois. Other states are changing their criteria as well. IMO I don't think that the need for an agent will go away. Things may change a little but there is merit in what agents do. We will just have to wait and see what happens.

FYI commission percentages have come down from what was charged before the boom. My area saw 7% as the common rate pre housing boom. Once the boom came that dropped. This is when a lot of discount brokers threw their hats into the ring and commissions continued to come down. People started to go with discount brokers and then problems started to occur. Buyers and sellers started finding out that these companies were not all they were craked up to be. Slowly buyers and sellers came back to traditional agencies but were a little wiser and more cautious. Now we are starting to see percentages go up in some areas as inventory increases.

I for one will take into account the thoughts and views of FSBO's such as yourself. I do appreciate your point of view and will use it to improve what I can do as an agent. It's this kind of dialogue that may help to improve the situation for all.
1 vote Thank Flag Link Sat May 1, 2010
And I also I forgot to mention Jeri and Patrick.
Excellent answers from the two of you, in my humble opinion.
1 vote Thank Flag Link Sat May 1, 2010
Patrick,
I dont think it's the commission that drives people to be FSBO, I think it's "excessive" commission fees combined with promises that agents dont keep and poor communication from the agents that drives sellers to seek an alternative to the typical "list with a realtor" way of selling. I would almost bet a weeks wages the typical home buyer puts a down payment of 5% or less when purchasing a home, I have no facts to back that up so it's just a guess..So just say the average buyer puts down 5% at purchase, lives in the home 5 years and is ready to resale..He will now have to prepare the home for resale spending anywhere from several hundred to several thousand dollars getting the home ready to list...Then the seller has to deal with additional closing cost when the home sales...And now we are in a sluggish economy where in most States home values are declining in value..People dont have the 6% to spare for commissions and thus is setting up the perfect storm for more and more sellers to lean towards FSBO...And once these sellers (like me) have went down that path of actually selling a home using the FSBO methods they will be less likely to ever use an Agent again because once they understand the process is not complicated (although sometimes frustrating) they will feel like the commisions paid in the past were excessive for the amount of actual work that was performed. I think the whole Real Estate Industry had better change with the times and re-evaluate how commissions are based and the amount of commissions/fees or they might find themselves taken over by a whole new industry of FSBO sellers..Remember when we had to go to Attorneys for such things like divorce,wills, bankrupcy and other legal matters? Now you can get all the DIY papers and file the proper documents yourself..My point is this world is becoming a DIY type of economy, and more and more consumers are going the "do it yourself" route when it comes to repairs, sales, and lots of things...and my prediction is Real Estate sales will be one of the next hardest hit industries by the "Do it Your selfers" simply because the industry refuses to change with the times and continues to be driven by greed..
1 vote Thank Flag Link Sat May 1, 2010
Fred..BTW, I do not consider you a Agent basher, I think you just have strong views and get annoyed sometimes (as I'm known to do lol) with what you feel (again as I do) is a habit of some agents to ignore or belittle what you are saying, label it Anti-Agent and then try to use it to make high-wire act claims or suggest what you say has no value...

Any opinion has value if it is presented and defended civilly and with the sources of your claims...This is about letting CONSUMERS who are looking to have information to pick through and make their own decisions of what view they will have......Thank-you for participating and thank you for keeping it civil..

Dune the $20 PRO
1 vote Thank Flag Link Sat May 1, 2010
Jeri...I truly appreciate your thought/views and hope you understand I truly mean this to be a civil look at varying views for Consumers to consider...not RE bashing but maybe a little BS bashing ;)

Maybe if the info is not readily available or a nightmare to document it would be better for the Industry and the image of that industry if those Agents seeking business or to wishing to promote the value of Agents would stifle the claims.

Make claims to show expertise/value and then when asked to back it up...Well we can't/won't because......

Trust?....Value from someone making inaccurate or false or just unverifiable claims to show value? Now we are going to believe their advice if they represent us because???????

IMHO to many Agents think their license suggests intelligence and perhaps it does to some Agents but to the Consumer...they are involved in a huge financial endeavor and need more than that to feel any confidence in the claimed expertise or value.

Patrick
Perhaps non-agents bash Agents unfairly (I know I have come down on the side of Agents many times when this happens) but have always also witnessed in this forum or been a victim myself of unfair bashing by Agents...The point of this discussion at this point IMHO isn't prospecting anymore (other FSBO threads for that) but to perhaps honestly and civilly discuss the topic for the benefit of the CONSUMER so they can consider it.....
I don't think most Consumers pay anymore attention to the Agent bashers than they pay to the Prospectors or Non-agent bashers...Those 2 groups are far to busy admiring themselves to matter much to Consumers and are only here because Trulia allows it and the type of discourse that follows...
1 vote Thank Flag Link Sat May 1, 2010
Hey Dunes - How are ya? You make a good point and a good case for more public information being available on MLS statistics - unfortunately, it would be a nightmare to fairly document. MLS's aren't necessarily connected, so many agents have statistics ranging over the years in several different area MLS's. We just don't have one unified depository to fairly present that information from. So, a consumer has to rely upon the word of the agent...hmmm...well some "words" are better relied on than others - LOL! I guess the solution is in walking your walk, and living your talk - and trusting that in doing so your experience is evident to others.

One good way to "document" that experience is to have a variety of verifiable sales and contact information for people who've done business with you. References - and not just your 3 best friends - but a wide range of people from all walks of life who have sampled your wares can be helpful.

Moreover, I think experience is demonstrated in the care and attention to detail given in an interview. An experienced agent will generally have solid, helpful answers to direct questions, rather than a bunch of evasive, pat answers. A good, experienced agent will listen and try to connect with a potential client's individual situation and be willing to "think outside the box" in presenting possible solutions.


I find that when I connect with a client in a real and genuine way, proving claims and numbers becomes irrelevant - it's the deeds, not the words that matter in the end. Wouldn't you agree?
1 vote Thank Flag Link Sat May 1, 2010
PS Anyone who tosses about little comments as if they were facts....should have the courtesy to provide their source for their claim so people can determine if they are using a source with credibility or just more "Hire us Agents" BS...
Willing to mislead or just tossing out poorly arrived at numbers provided by NAR is just so lame...Consumers are not ignorant but I truly believe Agents who think they are = ignorant.
1 vote Thank Flag Link Sat May 1, 2010
@ Jeri

If you are checking in perhaps you could answer a question for me..

A Consumer (including any FSBO listening to Agents prospect their business) cannot just push a button and see how many homes an Agent has sold. (They can contact an Agent and ask because it's available to them) but they are told they are not informed enough to interpret the info so Call me, email me...Some of us feel it's used more as a lead generator or possibly to conceal how FEW homes someone has really sold....I sold hundreds... Been an Agent for 10 years and you sold 20 homes a year (that would be 200 which I guess is "hundreds"), been an Agent for 15 years and you sold, been an Agent for 20 years and... MOST......Yeah right...Many? Out of how many?

I feel it's not accessible like other info because to many of the "I'm a top seller" yadda yaddas would be busted telling their little stories hoping for business.

Why do you think it is that if Agents are so Professional and feel free to do the we/sell, my experience, my track record yadda they don't push getting the info out so people can see who's full of it and who isn't...

And I'm not buying into the "Protecting the consumer"..."they are not informed enough" nonsense some seem to feel anyone besides an Agent would ever believe...I consider that kind of response to be the type that confirms people negative views of Agents, not the type that is positive for Agents in any way...

It's hard to sound like such a big RE Expert when prospecting FSBO's (Explaining to them how your experience and yadda yadda) if they can push a button and see you sold 2 properties in the last 12 months or none,,,,
# Less than $10,000: 22% of Realtors
# - $10,000 to $24,99: 17%
# - $25,000 to $34,999: 10%
# - $35,000 to $49,999: 13%
# - $50,000 to $74,999: 13%
# - $75,000 to $99,999: 9%
# - $100,000 to $149,999: 8%
# - $150,000 to $199,999: 3%
# - $200,000 to $249,999: 2%
# - $250,000 or more: 3%
2009 NAR member Profile..http://mysinglepropertywebsites.com/propertysites/2009-nar-p…

Most have what? Possessing a license is not experience nor does it guarantee expertise in selling, paperwork, marketing ect.....Some Agents have never sold a thing or if they did they sold cousin Mrytle a place and now call it expertise.

I think "most of us non-agents" think the reasons given by many agents is pure BS but I am very interested in your take on it as a Broker since this prospecting of FSBO's by using "We sell, expertise," stuff seems pretty lame when backing up the claims are not something many Agents seem anxious to do...

In other words if the "most of us Agents" or even "many of us" Agents comments are true then why shouldn't consumers just use the Cheapest of the "most of us Agents" or are the "Most of us Agents all 6% agents"?

My question...My understanding is that an Agent can easily access this info through their MLS and if that is true then why not allow the public the same ability.....Transparency instead of you are not as smart as me so you can't see it, I'se protectin ya........now Trust me...

Let us see who the "most of us Agents" are or if any "most of us Agents" even exist.........And how many of the "most of us Agents" their are compared to how many NOT "most of us Agents" there are

Dunes the PRO and VIP3
who on the 15th will be a VIP2 because Trulia just took close to 5000 VIP points away from me......http://www.trulia.com/blog/discovertrulia/2010/04/vip_score_…
1 vote Thank Flag Link Sat May 1, 2010
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