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I would still offer the buyer's agent a commission if they brought me a buyer .
The thing I don't like is that agents want to act like what they do it magic.
The main thing and most important thing in selling a house is finding a buyer. In a hot market like SoCAL now aren't people with money finding it hard to buy?
I'm guessing these days it's mostly people looking for a house themselves anyways through search portals like redfin, etc.
Using a flat fee MLS listing service wouldn't your listing show up on these portals?
And as I mentioned what hungry agent would turn down a FSBO deal if they have buyers in their pocket that can't find inventory for?
It does not make any logical sense. Are they dumb enough to turn down money because they don't want to deal with a house that's not listed by a Holier than Thou agent?...
The buyer's agent would still make a commission
Actually in a hot market it should be possible to sell a house without any agents involved.
Think about if you actually spent a few thousand on marketing... I'm sure you could get many many leads.
You could afford to do some really interesting marketing that agents will never do because they have other deals and they aren't going to spend that much money on marketing them unless we are talking multimillion dollar homes.
How much effort and marketing $ does an agent actually spend on a lower end $400k type house in the SoCal market?
It seems like this industry relies a lot on fear versus facts and reality..
How long does it take the average person to say $12,000? (and that's just 1 side of the commission)
I think people just look at the percentage and think "Oh 3% that's not much" ,but don't actually do the math and think about how much effort and time the agent is going to spend.
Again , this is for a hot market like I am seeing in L.A , homes going pending in a week or so even in not so great areas.
The main thing and most important thing in selling a house is finding a buyer. .
Not to mention all the paperwork that goes into the deal. Not sure I would want to handle all that alone. So much more that the agent does then just get the buyer. I would pay someone else to navigate those waters.
But $12,000 for paperwork? Sounds super steep to me. Even as a seller or buyer with an agent you still need to deal with paper work anyways, so it's not like you can completely outsource that stuff.
It's actually escrow that handles a lot of that stuff rather than the agent. The agent is basically just forwarding the docs from escrow to the client.
A few years ago, after losing out on several multiple bids houses, my parents came across a FSBO and they jumped on it. Finding a FSBO in market where any cardbox shack gets multiple bids is like finding gold. The first thing we thought of is not that the seller is cheap or we should get a commission discount, the first thing we thought of was: Yay! Less competition!
It was a FSBO short sale where the seller happens to be a real estate agent but he didn't want his fellow colleagues to know he's underwater so he didn't put his house on the MLS, never listed with a broker, but instead advertised it hush-hush style and only for a very short time.
So in a hot market, houses sell themselves. Whether there is a real estate agent behind it is irrelevant, imo.
The thing to keep in mind with the flat fee listings is that they don't include the commission for the buyer's agent. So, you will probably still have to pay 2 to 3% to the buyer's agent if you expect any agents to show your house, at least.
Also, if an agent has a buyer that likes two about equal houses, one FSBO and another with an agent, the buyer's agent would much prefer that they went with the listed house because FSBO sellers are a real hassle. Of course, no two houses are ever completely equal, so if your house is better then it will sell.
Yeah I do understand that, of course if a buyers agent brings you a buyer you will have go pay them a commission ..but if you could save that commission on the list side, isn't that significant ?
FSBO sellers are a real hassle ? Sounds like a generalization kind of .
Also if buyers are really desperate to buy in this market , won't the agent deal with the hassle versus turning the deal down . It seems like today there are more buyers than homes ...would anyone disagree about that ?
Lets say he has a bunch of buyers lined up , and that nonfsbo already has a bunch of offers ..as it seems to be these days ...will they really turn down the fsbo?
Also I've heard of people offering more than 3percent to give an incentive ..like 3.5 percent..but in a tight market with low inventory I don't imagine this is necessary.
I still haven't heard of any decent arguments for hiring a listing agent in a " hot " market with low inventory.
12k$ is too high for an agent. Those were the days when people really needed a real estate agent to sell their houses.
But i suppose people now rather want to invest in real estate.
FSBO sellers are a real hassle ? Sounds like a generalization kind of .
Yes, it is a real hassle unless the seller is very knowledgeable about the process. I am in CA where we have a huge amount of disclosures and other documents involved in the process.
The first thing we do after a home goes under contract is ask the listing agent for all the disclosures. Do you know what those are? How to find the forms? How to fill them out? Do you have county specific disclosures? Do you know how to order HOA docs or CC&Rs and which ones are required? Do you know that if you forget a disclosure form and submit it right before you are scheduled to close, the buyer can cancel within 3 days without risking their deposit?
The FSBO seller often counts on the buyers agent to lead the way on this, making our job more difficult and increasing our liability because it can make us the seller's de facto agent without getting paid to do it. Yes, it is a hassle.
Are you good negotiating? Because agreeing on the price and signing a contract is just the beginning of the process. Getting under contract is the easy part. Getting through the process of appraisal, inspection, loan conditions, timing and possession can be a breeze but more often creates a new opportunity to negotiate with every issue that arises. Getting closed with money in the bank takes a lot more effort than just getting an offer.
"Using a broker to sell your home can cost you up to six percent of the selling price -- in other words, if you sell your house for $400,000, you can lose up to $24,000. But you'll save that money if you sell the house yourself, and it's not hard to do! Thoroughly revised and scrupulously researched, For Sale by Owner in California takes you step by step through the entire selling process, from putting your house on the market to transferring the title."
From the reviews :
"u have ever held a garage sale or sold a car without hiring someone else to do it for you, why would you turn over 3% or 6% to a realtor to sell your house? It isn't rocket science!"
My point is that the 'work' that an agent does can be done on one's own or outsourced for a very small fraction of the cost.
An interesting comment from a BROKER on this article :
"
The real estate industry doesn't seem to understand that their 6% commission fee is more than many homeowners have in equity. If your house is worth $400,000 and your equity is $60,000 then that 6% commission ($24,000) is a whopping 40 percent. The costs haven't changed even though agents have to do less work now than ever before.
As a broker myself, it's a trend that I've been aware of for some time. With so many free and low-cost resources at their disposal, people have choices. I am seeing more and more homeowners take matters into their own hands."
Last edited by jm1982; 08-30-2013 at 12:20 PM..
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