what are the disadvantages of "for sale by owner"? it seems now is a seller's market - so what value will a selling agent bring?

Asked by BP, Milpitas, CA Sun Jun 3, 2012

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Carla Muss-Jacobs, Principal Broker/Owner ~ Exclusive Buyers Agent ~ ABR, CEBA’s answer
Carla Muss-J…, , Portland, OR
Sat Jun 9, 2012
There's many agents who won't show a FSBO property. I'm an EBA (Exclusive Buyers Agent) and work with Buyers Exclusively. I let them know that if there's a FSBO on the market they will need to instruct me on whether they want to deal with FSBO's or not. If they don't want to deal with them (more to the point, if they don't want me to deal with a FSBO in their behalf), I don't show them property since I'm obligated to follow the instructions of my clients..

The liability to my brokerage when dealing with a FSBO is one reason. I, a licensed professional, don't like working with FBSO's/unrepresented sellers. While I'm the only one licensed and I'm dealing with an unrepresented seller, whose license will be called on the carpet if something gets screwed up in the deal? I might be acting in the best interest of my client and the FSBO screws up, but I don't represent the FSBO and can't disclose to them what the heck they're supposed to do.

I'm also not going to do the FSBO's work for them. If they think "playing Realtor" is fun and will save them money, let them conduct business with me. I'm not their agent and I won't do anything to even hint at "dual agency" undisclosed or disclosed.

But, then . .. on the other hand . . . I love FSBOs because, and trust me on this, a savvy buyers agent can "negotiate" a deal for their clients that will make the FSBO's head spin. Yeah, keep thinking that just because it's a "seller's market" you can wheel and deal. HA HA HA HA HA HA Love the logic on that one. Keep thinking that all an agent does is open the door for the buyer, or plants a "for sale" on the property for the seller. Yeah, that's all real estate is all about . . .

My last deal had the sellers coughing up $20,000 and they were represented by their listing agent. Properties were flying off the shelf in that little market where my clients wanted to buy. Sellers left $20,000 on the table . . . in a "seller's market" AND they were represented. HA HA HA

I used to work for an attorney, prior to becoming a licensee. He bought a house and only AFTER did he realize there were no rain gutters! We live in the Pacific NW and it rains here. The lawyer couldn't even figure that out. He was way too emotional, nervous, anxiety ridden to represent himself. He didn't have a buyers agent, went with the list agent and thought he could broker the deal. He did . . . only thing was, he didn't broker rain gutters into it.

The "selling agent" is the buyer's agent -- the agent who actually SOLD the home to the buyer is the selling agent.

The "listing agent" is the seller's agent -- the agent who actually LISTS the home for the sellers.
1 vote
you don't seem like an agent with much integrity....
Flag Mon Mar 6, 2017
Terri Vellios, Agent, Campbell, CA
Wed Jun 6, 2012
Risk management. Most people believe that the reason they hire a real estate agent is to market the property to find a buyer. The best reason to hire an agent/broker is for risk management. A full time seasoned professional has a vested interest in giving you all your options for disclosures, understanding what you are agreeing to in a purchase contract, and so much more.

If you are in a position to buy your house back if something goes terribly sideways , then perhaps you can sell by owner. I will share with you when I've sold my own property, I hired an agent. In addition to risk management, they should be awesome at emotion management and ego management, because those two things can really get in the way of smooth closing.

Have an amazing day!
Web Reference:  http://www.terrivellios.com
1 vote
Cindy Davis, Agent, San Diego, CA
Sun Jun 3, 2012
Wow! Agents do so much more than sticking a home on the MLS. The agent will make sure your disclosures are filled out correctly, and assure that you go through the necessary reports and inspections properly. My quetsion for you would be what is the advantage of going for a 'fsbo'? Price?

Every time I've viewed fsbo's...they are priced too high for the market.

Anyway, best o luck.
1 vote
John Souerbry, Agent, Fairfield, CA
Sun Jun 3, 2012
I'll focus on just one disadvantage: "reach". In advertising, agencies place ads based on "frequency" and "reach." Frequency means how often the message will appear and reach refers to the size of the target audience. One of the functions of an agent is to broadcast your home sale information to as many potential buyers as possible. The bigger the pool of buyers who know about your home sale, the more likely you are to get the deal you're looking for in the time frame you want it. Agents are part of an advertising network that includes, but extends well past, the Multiple Listing Service (MLS). Most MLS listings are also "syndicated" or shared with dozens of other sites, such as here on Trulia. Agents also manually enter your sale information into a half dozen or so other marketing channels, including print, broadcast, and other media. Creating this extraordinary "reach" is something that most owners do not have the tools to do.
1 vote
David Owens, Agent, Wichita, KS
Wed Mar 9, 2016
Selling a house is unlike selling a car. The process of selling a home is very complicated and the risk of errors can be high and expensive.

Advertizing is another area where a Realtor has definite value to a seller. Placing listings on the MLS so other agents know the property is for sale, talking with people who the Realtor knows is in the market for the property and other agents they work with are effective ways to get potential buyers to make offers. FSBOs who put a sign in the yard and list on Craigslist limits the market exposure for the property and could significantly reduce the sale price.

Many people have also mentioned safety as a concern but I won't elaborate on that very valid point.

Often people think they can save money or increase their net by FSBO. But working with a good agent can easily offset the cost, sell the property faster, and reduce the stress and anxiety of the sale process.

David Owens
0 votes
Osteencitadel, Home Buyer, West Columbia, SC
Mon Feb 2, 2015
Look at all the real estate agents posting...hmm
0 votes
Osteencitadel, Home Buyer, West Columbia, SC
Mon Feb 2, 2015
I bought a home FSBO and it was my first home and it went great. It was 2008 and the market was down and who can lose 6% when they are already selling for a loss. I tried an agent but she only showed me Colwell Banker homes and was only interested in her commission. Real Estate agents are not adjusting to technology. Read the contract, make an conditional offer based on a the results of a home inspection and final walk through. Use trulia and zilliow to figure out the market based on manly the neighborhoods of similar quality. It is easy, you are going to do it anyway because you can't trust agents with your hard earned money. Even a lawyer is cheaper and would have your interest. I thank the future should be a flat fee like the majority of the developed world.
0 votes
Meena Gujral, Agent, Pleasanton, CA
Wed Apr 10, 2013
Just wondering if you ended up selling your home since this post is quite old. Did you sell For Sale By Owner or did you end up listing it with a Realtor. Your question was posted in June of 2012.

We at Help-U-Sell can sell homes for a low set fee. We are full service realtors. You can go to our website for more details if you are still looking to sell.

Meena Gujral
Help-U-Sell Achievers Realty
0 votes
Deborah Garv…, Mortgage Broker Or Lender, San Diego, CA
Sat Jun 9, 2012
Good points by agents. There is one BIG reason:

Most real estate professionals are going to insist upon potential buyers to be preapproved before they take them out to preview properties. They are not going to open houses for lookey loos, stalkers and aspiring home buglars!

Seriously, there are manyn reasons why you don't want to open up your home to just anyone who happens to see your For Sale by Owner sign. Think carefullyn about your strategy for privacy, liabiltiy and safety before putting the sign on your lawn and posting on Craigslist. At very least, partner with a lender to prescreen anyone who want to view your property.
0 votes
Mark Burns, , Cupertino, CA
Mon Jun 4, 2012
Listing agent and selling agent. One for the seller and one for the buyer. Do you want to go directly to the seller's agent to make an offer or do you want to sell your house yourself?

If you want to be a For Sale by Owner, it could be a lot of fun. Or it could be a long drawn out process with a lot of mistakes and lost opportunity. I won't restate what others have said but you might consider one or two things: Do you know the agents and their brokers who will be submitting offers to you? Will you be able to tell which offer(s) will really be able to close?

Good luck,

Mark Burns, Realtor
Coldwell Banker Elite - Top 2% Worldwide
President - PRDS, Contracts and Forms for Silicon Valley Residential Real Estate 2008-2012
DRE #00896552 Licensed since 1985
Over 600 Homes Sold in Silicon Valley
Web Reference:  http://www.markburns.com
0 votes
Edith Karoli…, Agent, Winnetka, IL
Mon Jun 4, 2012
I am not going to add anything to what all the other Realtors have already said below.....You obviously are not quite decided yet to do this by Owner, and I mean all of it....

If you are just thinking about saving the commission, put your home on a few FSBO sites and
voila it is sold, nothing to it, go for it and you will find out.... or may before you proceed with FSBO read all that the other agents have to say to convince you otherwise.

But I have only one question for you... what makes you say it seems now is a seller;s market?????? How did you determine this, how did you find out, who provided you with all the information?

Do you know exactly how many homes are on the market and how many buyers are looking, and I mean ready and willing and approved buyers who will actually and seriously buy a home.....If there are more homes on the market than ready and willing buyers, we are not in a sellers market we are in a buyers market, i.e. the buyers have a lot of homes to select from, so they can cherry pick
and buy when their price is accepted or negotiate it until they find the home at the right price for them.

If homes come on the market and are under contract within 2 weeks that may be a Sellers market...

So because you are saying it seems....... I am almost convinced that you do not have all the numbers. and still you would be well advised to work with an experienced Realtor to make the entire process from start to finish so much easier for you. If you need any recommendations get back to us and we would gladly provide you with some good recommendations.

All the BEST

@Properties North Shore, 30 Green Bay Rd. Winnetka Il. 60093
Edith always works in the very BEST interest of her clients Buyers, Sellers and Investors alike,
covering the city of Chicago, all N and NW suburbs and the fine homes of the North Shore.
Edith always goes the x-tra Mile with a Smile for all her clients.
Feel Free to visit my website
Have a wonderful Day :)
0 votes
Ricky Ablaza, Agent, Milpitas, CA
Sun Jun 3, 2012
HI Bpl_pal,

If you can do all of the following, then "for sale by owner" is fit for you. If not, give me call (408-316-0793):

1. Needs Analysis
a Help clarify the motivating reasons to sell
b Determine the seller’s timetable
2. Pricing Strategy
a. Determine the best selling price strategy given current market conditions
b. Show resulting net sheet
3. Property preparation
a. Advise on repairs and improvements
b. Provide staging strategies
4. Marketing strategy
a. Develop marketing plan
b. Establish marketing timetable
5. Receive an offer
a. Evaluate offers
6. Negotiating to sell
b. Negotiate counteroffers
c. Advise on final terms and conditions
7. Sell
a. Prepare post contract work list
b. Advise on repairs and vendor services
8. Pre-close preparation
a. Coordinate and supervise document preparation
b. Provide pre-closing consulting
9. Closing
a. Review closing documents
b. Resolve last minute items
c. Complete transaction
10. Post closing
a. Coordinate move
b. Assist with post closing issues
0 votes
Eric H. Wong , Agent, Albany, CA
Sun Jun 3, 2012
You are going to get a lot of answers from real estate agents defending their role and extolling ths advantages of using an agent, so I will not repeat them here.

There are a certain percentage of sales every year that are completed without the services of an agent. If you feel like you can handle the listing and sale of your property and the effort and time it will take, then go for it.

But, if after a month you are not getting the showings you expected or the offers you think your property is worth, please consult with a knowledgeable, local agent.

Good Luck
0 votes
Elena Talis, Broker, Palo Alto, CA
Sun Jun 3, 2012
If you are a DIY type - go for it. I prefer to hire professionals in the field..

In terms of the value of a real estate professional - most of the buyers are being represented by the agents. My work on your house would be to sell it to the agent community, make them bring their clients to your house. And I can do that. Second - I will negotiate on your behalf. Everything from the price to terms of sale. Third - I will keep the transaction on time and rolling. If it is necessary, the buyer may have to be encouraged to perform.

The rest is obvious to most - MLS, syndication to multiple web sites, help preparing your house on time and on budget, satisfying all legal requirements for the sale, etc., etc., etc.
0 votes
Tim Moore, Agent, Kitty Hawk, NC
Sun Jun 3, 2012
To you, a seller, it brings the chance to sell the house. Having it listed on the MLS where a thousand agents can find it when they have a buyer looking for a house is priceless. It also is listed on a thousand websites for buyers across the country to find it from their kitchen table on Sunday morning at 7am. A seller can count on their agent being there to show it so they do not have to be there and they can be having fun, at work or on vacation --- and it gets sold without them lifting a finger.

For you as a buyer - we are free free free so why wouldn't you use us to haul you around in our cars burning our gas showing you homes you might never find wondering aimlessly on your own?
0 votes
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