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I'm having so little luck finding a house I like, I starting trying to find "for sale by owners" to see if I had missed anything. I only found one house in the area where I am looking that I hadn't seen on other listings. Are FSBO's hard to find and are most willing to pay a buyer's agent?
Well, if they are in the MLS, then likely they have indicated some compensation for a buyer agent. Don't know if most are willing to, but I'm sure your agent would be willing to ask if you find one. Or you could agree to pay commission if not. You could try Craigslist, probably most will at least advertise there, but beware of scammers.
No FSBO's are listed in the MLS. There are people who are selling their houses with limited representation, but in order to be in the MLS, they must have a listing agreement of some sort with an agent, even if it's just to put them on the MLS (and some states are passing legislation that requires that a certain level of representation be given regardless if money changes hands between a licensee and a client, to prevent abuse and misunderstandings). This removes them from the category of "For Sale By Owner".
So, if you're looking for a true FSBO, you'll need to look elsewhere than the MLS.
There are websites out there for true FSBO's to list their homes on, and you also might try Craigslist - our local one has categories for brokers to list homes and a for owners to list homes for sale.
You are correct. All MLS listings require a brokerage to be involved through a listing agreement. In my state, that may be very minimal representation (basically nonexistent) for a minimal cost. Many of these listings request offers to be presented directly to the seller. It's just a way for a seller to get into the MLS for more exposure. In their mind, they are still FSBO.
"EO" listings on our local Triangle MLS are "Entry Only," with no implication or requirement of the entering Realtor to insert himself/herself into the proceedings beyond slapping data onto the MLS.
All Buyer or Buyer Agent dealings are directly with Sellers. Often the listing agent has never met the seller, with all interface electronically.
More to the point of the OP's question:
I have no idea if "most" unrepresented sellers list on MLS. Quite a few do, but I think not "most."
Last edited by MikeJaquish; 10-26-2009 at 06:38 AM..
Yes, laws do vary by state, which is why I said some states were making requirements for a minimal level of service to be provided.
We sometimes have listings that say to contact the seller directly for all showings and information - these usually have a combo lockbox rather than a supra lockbox and the agent may be in an entirely different region of the state, BUT we are required to submit the offer to the agent as well as the seller - the agent is required by law to do at least that much for their money, however little it might be, since they are in an agency relationship with the seller.
And, yes, sellers who use limited service agents may think in their minds that they are unrepresented, never mind that they have signed a contract that indicates otherwise. (One does wonder how many people simply do not read the legal documents that they sign.)
But I suspect the state law requiring that the agent actually do something for their client, however minimal, beyond putting them on the MLS may have something to do with why I find most FSBO's NOT on our MLS.
I'm having so little luck finding a house I like, I starting trying to find "for sale by owners" to see if I had missed anything. I only found one house in the area where I am looking that I hadn't seen on other listings. Are FSBO's hard to find and are most willing to pay a buyer's agent?
Other agents and Realtors answered your question regarding the MLS. I wanted to comment that any smart FSBO seller should offer compensation to a buyer agent. I know many people who have gone that route due to the area their home is located and I have always advised them to factor in buyer agent commissions. A smart FSBO seller does NOT want to reduce the huge pool of buyers who want to be represented (someone looking out for their best interest) by not offering a BA compensation. Just ran across one the other day while we were scouring the market for a client and it said 'principals only' - IOW, no agents. To me, that screams that a seller does not want a buyer who is represented though of course that's JMO.
My state requires limited service brokers ( flat fee guys) to accept, communicate and negotiate all offers.
I am not aware of any flat fee guy who lists in my area, who knows the dirt or visits the property or the comps. The flat fee guy and seller are at a disadvantage when the offer is presented by a buyer's agent who knows more than they do.
There's a dirt cheap flat fee guy who is licensed in my state whose office is in a state thousands of miles away. Gotta love it.
YTD, in my area, only 2 properties listed by a flat fee guy have closed. The rest have withdrawn from the market, eventually list with a full service broker or remain amongst the unsellables.
If flat fee brokerage was effective at getting property sold, I would embrace the concept.
There are some agencies that for a fee list a property on the MLS and proivide the owner information so it is a FSBO. If you call the agents they will quickly tell you to call the owner and not discuss it. after all they have no interest in it.
In order to be listed on the MLS some compensation must be offered to agents.
For the m,ost part FSBO's do not makeit on the MLS, but agents sell the majority of them anyway. If a FSBO allows an agent in to show a client their home they will obligate themselves to a traditional 3% commission. This has made it to court and the FSBO has lost steadily.
I can't imagine why you aren't finding what you are looking for unless your parameters are not realistic. ie wanting a 5000 sq ft home for under 100k... check above your price and see if more doesnt show up.
I have a belief that an offfer is better than no offer. I have a client that we looked above his means and found a home at 305k he liked. problem, he was only approved for 260k. So it seems too low an offer but the one thing you never know is the motivation of the homeowners. Result, we closed today. I gave them the chance to say no and they accepted. ices nice to get 15% off, not the norm but had we never proposed it it wouldnt have happened.
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