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People find many reasons to avoid selling their homes to qualified buyers.
FSBO refers to selling and marketing. To kick a buyer to the curb after selling and marketing on a principle that does not alter the net proceeds to seller is a personal choice, but hardly logical.
How would I have "kicked the buyer to the curb" when accepting their offer and moving to contract?
We made it abundantly clear what/why we needed to get out of the house to fulfill our mortgage and moving expenses. Are you saying we should have taken a loss or tried to convince the buyer to come back with a higher offer?
I know this to you is ponderous redundancy, but in terms a half-wit might understand, what benefit do I, the seller have, paying a buyers agent ?
I did not understand the last example. Are you assuming that all FSBO's sell for less than an agent would get for them and buyers win in negotiation 100% of the time on the "no commission" theory?
You are going to pay it one way or the other. Either a commission or a reduced price. Why does it matter which one?
I guess thats where I didnt get it. I must respectfully disagree about FSBO's automatically getting sold at a lesser value. There are some places that somes houses sell themselves as soon as they go to market just due to their location. I dont think it is reasonable to assume all FSBO's go for less than they would otherwise.
I guess thats where I didnt get it. I must respectfully disagree about FSBO's automatically getting sold at a lesser value. There are some places that somes houses sell themselves as soon as they go to market just due to their location. I dont think it is reasonable to assume all FSBO's go for less than they would otherwise.
Here is the problem (or one of them). You are going to exclude the majority of buyers right of the bat. The fact is most buyers have agents and they aren't going to pay you market value and pay the commission. They may as well buy a similar house and get representation for the same money.
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Quote:
Originally Posted by thunderkat59
How would I have "kicked the buyer to the curb" when accepting their offer and moving to contract?
We made it abundantly clear what/why we needed to get out of the house to fulfill our mortgage and moving expenses. Are you saying we should have taken a loss or tried to convince the buyer to come back with a higher offer?
I know this to you is ponderous redundancy, but in terms a half-wit might understand, what benefit do I, the seller have, paying a buyers agent ?
I did not understand the last example. Are you assuming that all FSBO's sell for less than an agent would get for them and buyers win in negotiation 100% of the time on the "no commission" theory?
Sales price is moot, as long as the property appraises adequately.
Seller's net proceeds from sale is the game at hand.
Why does it matter if the buyer rolls agency fees into the sales price, as long as the net proceeds are unaffected?
A seller negotiating for anything other than net proceeds and acceptable appraisal likely has their focus in the wrong place.
Ok, I understand now. I also googled this theory and of course Realtor sites gave stats in their favor and FSBO's gave stats in their favor. However, somewhere in between, the few independent financial sites that came up agreed with going with the realtor.
I did the comp research and got a nice turn-around profit on my Vermont FSBO, and think I got a good price, but I better understand your perspective and respect that the stats don't lie !
Thanks for your patience and perseverance in educating a dummy !!
We are going to try to sell our house FSBO. We had an "old" sign in front of our house (forgot it was there in a rock pile....but that's another story)....
Anyway, someone in the neighborhood took down our number called me and I gave her a sheet I had about the house and a link to photos.
I must note that we were interested in selling the house about a year ago....but now really dont want to sell until next May/June 2013.
She in turn, gave the info to her daughter who is the one looking for the house. The daughter gave my name and number to her Buyers Agent.
The Buyer Agent called me and asked if I was willing to work with a BA. After a while I said yes, I would probably deal with her and I asked what % she was looking for and she said only 2.5 instead of 3% (well, gosh golly gee, aren't you just the generous sweetheart!)
Anyway, they came and saw and we haven't heard anything, which is fine with me becaues I am NOT ready to pack up and rent until I can move out of state next year.
But, if this happens again, what is the correct % I should go with? After all, the BA isn't doing ME any favors.....I've got a real estate attorney lined up with a contract, etc. and ready to go. (this is New Jersey by the way).
What are your thoughts?
If you can sell your house and only pay 2.5% commission, that is pretty good. If you are dealing directly with this agent (ongoing negotiations and buyers have already seen house) I would drop it to 2% and see what they say. You can alsways go back to 2.5%
However, if a random BA calls you to feel out commission before they even bring the buyers buy, I would do the same thing you did with previous agent. Ask them what is appropriate, they may quote you something less than 3%.
Not all FSBOs sell for lower than market prices. In fact, I've seen quite a few FSBOs sell for crazy high prices. I think some buyers get so excited about the idea of buying without any Realtors getting a cut that they get careless and falsely assume they're getting a good deal. If you're buying without an agent do your homework. The seller is certainly not going to tell you that your offer is stupid high. Penny wise...
Quote: Originally Posted by MikeJaquish Why would a seller even consider NOT paying the agent? It makes no sense.
All that is happening is the buyer is financing their agent fees in the purchase.
House sells for $500,000 = 2.5% = $512,500.
Or house sells with no agent at $500,000.
How does the seller net change between the examples? There is no reason for the seller to deny the buyer representation, assuming the buyer is ready, willing, and able.
Still dont get it. Sorry . . .
I am not denying anybody anything. The buyer chose to have representation. I still dont understand why I would need to pay a percentage to someone who I have not requested service from and has done no service for me, especially on a "hot" property that as mentioned, did not need any agency marketing. The buyer paid the agents commission, as she should have. Not sure why I would.
What is the point of FSBO if you are still paying commission ? Obviously I am missing the obvious.
-----------unquote:
This is exactly what I don't understand. Say I want to list my house for $500,000 FSBO. Jack and Jill see the sign on my lawn and call me. We set up appointment. They see the house, they like it and we settle on a price of $490,000. I call my Real Estate Attorney, he sets up the contract, I give it to the buyer, they give it to their Real Estate Attorney.........they do whatever it is they (attorneys) do for 3 days and then ..........we go off into the land of "closing".
Why would I want to have a BA come to me with Jack and Jill and then settle on a price of $490,000 and (which means $490 out of the pocket of Jack and Jill)......but into my pocket it's not $490 but instead $478,000.
Why would I give $12,000 to someone who doesn't market my house (Trust me, I think listing agents certainly earn their money)......but someone who just brings me buyers I could have gotten on my own doesn't make sense.
Maybe I'm missing something? Maybe because I have the luxury of NOT having to sell until next year, and maybe because I still think my house is worth more than many of the same houses in my neighborhood (although it will probably sell at the same price as the others). See, we are the dummys who overdid our home over the years. (Although truth be told, we did it FOR US!!! We love the kitchen, the open concept, the rolling grounds, the pool area, etc. etc.)
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"net proceeds to seller!"
Quote:
Originally Posted by suzsaz
Quote: Originally Posted by MikeJaquish Why would a seller even consider NOT paying the agent? It makes no sense. All that is happening is the buyer is financing their agent fees in the purchase.
House sells for $500,000 = 2.5% = $512,500. Or house sells with no agent at $500,000.
How does the seller net change between the examples? There is no reason for the seller to deny the buyer representation, assuming the buyer is ready, willing, and able.
Still dont get it. Sorry . . .
I am not denying anybody anything. The buyer chose to have representation. I still dont understand why I would need to pay a percentage to someone who I have not requested service from and has done no service for me, especially on a "hot" property that as mentioned, did not need any agency marketing. The buyer paid the agents commission, as she should have. Not sure why I would.
What is the point of FSBO if you are still paying commission ? Obviously I am missing the obvious.
-----------unquote:
This is exactly what I don't understand. Say I want to list my house for $500,000 FSBO. Jack and Jill see the sign on my lawn and call me. We set up appointment. They see the house, they like it and we settle on a price of $490,000. I call my Real Estate Attorney, he sets up the contract, I give it to the buyer, they give it to their Real Estate Attorney.........they do whatever it is they (attorneys) do for 3 days and then ..........we go off into the land of "closing".
Why would I want to have a BA come to me with Jack and Jill and then settle on a price of $490,000 and (which means $490 out of the pocket of Jack and Jill)......but into my pocket it's not $490 but instead $478,000.
Why would I give $12,000 to someone who doesn't market my house (Trust me, I think listing agents certainly earn their money)......but someone who just brings me buyers I could have gotten on my own doesn't make sense.
Maybe I'm missing something? Maybe because I have the luxury of NOT having to sell until next year, and maybe because I still think my house is worth more than many of the same houses in my neighborhood (although it will probably sell at the same price as the others). See, we are the dummys who overdid our home over the years. (Although truth be told, we did it FOR US!!! We love the kitchen, the open concept, the rolling grounds, the pool area, etc. etc.)
Why would you sell for $490,000 rather than negotiate a price that covers the agent fee?
Why would you not sell at $505,000?
It is only numbers. Buyer bears the cost in the sales price, and you need to negotiate a sales price that yields you an acceptable net proceeds amount after all expenses are paid.
One thing a listing agent always does is provide a Net Sheet to the seller, which includes commissions, so the seller knows what will be left when the property is sold.
You should do no less for yourself, and be aware of any expenses you may need to account for to hit the bottom line you want.
No one can make you work with a buyer of any sort, including one with an agent. So, don't work with anyone if you don't care to, but look at your net when working with anyone.
Some sellers panic when buyers ask them to pay buyer closing costs. It is exactly the same dynamic. Get the net amount in focus, and the rest falls into place.
No seller gets to pocket and spend the sales price.
Sales price is ego. Net proceeds are money.
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"net proceeds to seller!"
