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We'll be selling our home in one of the notorious "declining markets" this spring and are debating whether to go with a traditional realtor or one of the flat rate services. We've sold by FSBO in the past as well as using a traditional realtor, so we're neither pro-realtor nor pro-FSBO zealots.
Our home is inside the DC beltway, in a suburban location with excellent schools. Homes in our area all very similar--colonial-style brick houses built in the late 40's. Based on recent sales (although there are very few), our home will likely sell for something around $850,000. This is a high price for an older 3br, 2.5ba, but actually well below the median price for the county, which is around 1M. Our home would probably be one of the least expensive in the neighborhood. Values are said to have gone down in our area by about 10-15% over the last year, but there are have been no foreclosures or short sales.
I don't think that our run-of-the-mill home will be that difficult to price correctly, and feel comfortable with the nuts and bolts of a real-estate transaction. So I'm wondering what a traditional agent brings to the table that is worth $50,000 (6% comission). A flat-rate realtor will provide an MLS listing, which is clearly THE major marketing tool.
Which will sell the home faster: some razzle-dazzle "marketing strategy" from a real-estate agent, or simply knocking 25-50K off the price (the 3-6% comission)?
While we are leaning toward the flat-rate service, there certainly is a major hassle factor in doing everything ourselves and we are still on the fence. Maybe some of the realtors here could tell me what they might be able to do for us that would get the home sold more quickly.
There are traditionally two realtors in a transaction, one for the buyer and one for the seller. Each charges around 3% commission which comes to a total of 6%.
If you don't have any realtors involved, then you have make appointments to show the house and be there for the showing. And your buyer will want some money knocked off since he didn't have a real estate agent involved. I don't think that's a wise idea at all.
A more common alternative is you still pay for the buyer's agent (often 3%) and take care of the listing agents duties. In that case, the value that the real estate agent brings is advertising. If you feel your hosue will sell itself, you may not need a real estate agent to help.
You don't need a traditional realtor You Need a Tech Savvy Realtor.
Our job is to expose your property to the greatest pool of buyers possible.
The marketing of your home is a different activity than negotiating your offer. There are 4 parties in a real estate transaction.
The Buyer and their agent, the Seller and their agent. The most articulate and well presented negotiator will sway all the parties in their favour.
If you have the skill and experience to control everything... then fine, Maybe FSBO is for you. The last part becomes transaction management.
In reality, purchasers are working with or on the Realtor databases for available listings. Going alone may not provide you the exposure you seek. Buyers do not have the time or energy to FIND and Negotiate with FSBO's being generally unaware of the process involved.
There are fewer buyers really looking at the FSBO market.
The reality is getting your house sold. Is a difference in 1,2 or potentially 3 % perceived gain in net worthy of the TIME on market chasing a declining sales value. SIMPLY put FSBO's on average IMHO spend much more time selling.
"A more common alternative is you still pay for the buyer's agent (often 3%) and take care of the listing agents duties. In that case, the value that the real estate agent brings is advertising. If you feel your house will sell itself, you may not need a real estate agent to help."
I personally avoid these situations as I often end up handling the Listing Agent duties to ensure the transaqction closes smoothly. In that situation I am liable to an additional party without compensation.
What ever you choice, I am sure that it is correct for you.
Buyers do not have the time or energy to FIND and Negotiate with FSBO's being generally unaware of the process involved.
There are fewer buyers really looking at the FSBO market.
I'm not really looking at doing a traditional FSBO for the reasons you mentioned, but instead would go with a flat-rate or "minimal service" agent. Do you think this is equivalent to a FSBO?
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You don't need a traditional realtor You Need a Tech Savvy Realtor.
This is an interesting concept. What would the "Tech Savvy Realtor" do beyond the basics of the MLS? I had already planned to create a simple web-site for the home, which is cheap and easy.
Honestly, I've been profoundly disappointed in the tech savvy of virtually every agent I've interacted with. Most seem to have great personal networking and traditional sales skills, but few that I've met have much to offer in the way of web-based marketing, or financial analysis.
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The most articulate and well presented negotiator will sway all the parties in their favour.
If I could find the realtor who could do this, I'm sure he/she would be worth his or her weight in gold. But again, I really haven't seen a lot of high-power negotiating tactics from any of the realtors I've been involved with. Mostly, they seem to be very nice, personable people who want to get the sale taken care of with as little time and hassle as possible.
I guess you could try the flat fee kind, and if you didn't like the results, change.
A good tech savvy broker would present you with a marketing plan. Realtor.com company website, text message, full video or virtual tours, craiglist ads...
My listings thru my point2 website get syndicated automatically to dozens of other websites.
Do most buyers work with a Realtor in your price range? Most Realtors prefer to deal with another Realtor in a transaction.
Most Realtors prefer to deal with another Realtor in a transaction.
Not sure about Montgomery County, but the real estate code of ethics requires real estate agents to show all houses and support buyers buying all houses as long as they are offered some sort of commission. It's a serious violation of ethics to show houses based on your personal opinion on the listing agent or firm selling the home.
However, that's not to say that it doesn't happen in real life.
..., but the real estate code of ethics requires real estate agents to show all houses and support buyers buying all houses as long as they are offered some sort of commission.
The name of the game with home sales is maximize your EXPOSURE.
The flat fee FSBO companies give you a sign for the front yard, usually only list on their web site and 1 MLS site (unless you pay more) for a limited period, and the rest is up to the seller. They don't promote your property to other realtors and they don't screen the potential buyers. I have heard many stories about sellers unkowingly spending a lot of time with shoppers representing themselves as buyers but who couldn't qualify for a mortgage even if the price was right.
Buyers are a lot smarter now than they were a couple of years ago when the homes were flying off the shelves as soon as they were listed. They know that a FSBO may have discounted the price but they want an additional discount or concession on top of that because they know the seller is still making $$.
Our statistics show that most FSBOs end up selecting a realtor after they try it on their own - especially in this market.
On the other hand, there are those sellers who start with an agent, the house does not sell (often times because it is overpriced), so the seller then tries the FSBO route to see if he/she can get their price on their own. The result is usually the same or they end up taking the house off the market after a wasted year.
It is tough market these days, even for a seasoned Realtor, so the seller has to determine how much time and effort they want to devote to an experiment.
Last edited by NORMGLO; 12-06-2008 at 12:15 PM..
Reason: insertions
The name of the game with home sales is maximize your EXPOSURE.
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They don't promote your property to other realtors and they don't screen the potential buyer
I don't doubt that this is true, but I'm wondering what "promoting your property to other realtors" really means and whether it even matters in the internet age. Given the universal availability of MLS data, wouldn't every realtor already be aware of every home for sale in their area? And virtually everyone I know shops for a home the exact same way--going to the internet and doing a search then visiting the ones that look good on the net. Do buyer's agents really have that much sway anymore over which homes their clients see?
I'm not trying to be argumentative, and don't doubt that having a full-service agent has some value. I'm just trying to determine where that value lies, and put a rough dollar value on it. Will it be worth 50K to me?
As a buyer, I do all of my searching on Realtor.com or Craigslist. I would jump at a for sale by owner that had been discounted 25 to 50 over something with a nice color brochure.
But you aint helping Realtor Diane keep up her Jaguar lease payments.
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