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I sold our home in Annapolis MD (in a nice neighborhood on the first day it was offered) above the asking price as a FSBO with several competing offers. I sold the next one in Yorktown VA to a guy in my office with just a note on my bulletin board. Usually if it's a decent house in a decent neighborhood you probably will not have problems.
Have never experienced a real estate agent suggest we tour an FSBO property. Never.
Unless a FSBO is in my face -- i.e., in a neighborhood I farm or unique, like being on a lake, etc. -- I don't generally go looking for them, and if they aren't in my MLS, they are almost invisible to me. FSBOs are not part of my marketing and listing acquisition plan. If I have a client with a specific need, I might check out Zillow or a couple of other sell-it-yourself sites, but honestly, though, the chances that a FSBO home will be overpriced and/or outdated are higher than average.
Many times, a client has found a FSBO on-line and wants to see it. It is often like pulling teeth to schedule showings. Seldom a lock-box, so they have to be there. "That's the baby's naptime. Can you reschedule for another day?" Often I CAN'T "reschedule" for the next day, because my buyers are being relocated, and they are only in town for the day. I had one wack-job following us around with his cell phone, videotaping our tour. Client was unnerved, and even when I asked the seller to please not videotape us, he aggressively said, "It's my house, I may need it for evidence if anything goes missing." The client looked at me and said, "I think I've seen everything I need to see," and we said goodbye. Seller was p.o.'d that we had "wasted his time," but he probably rationalized it by deciding that we really were there to case the joint.
Another FSBO seller wouldn't allow me to preview a home for an out-of-state client, saying they "knew" that I just wanted to solicit the listing. I was only going to have the buyer for 2 or 3 hours, she had a long list of homes and I thought it might be worth taking a look for inclusion on her showing list, since it was in her desired school district, but the pictures were so bad I couldn't make heads or tails out of the interior. Ironically, my buyer ended up buying the house next door to the FSBO. She said later that the FSBO seller came over after she moved in (house was still on the market) and said, "Why did you never come to look at MY house?"
I sold our home in Annapolis MD (in a nice neighborhood on the first day it was offered) above the asking price as a FSBO with several competing offers. I sold the next one in Yorktown VA to a guy in my office with just a note on my bulletin board. Usually if it's a decent house in a decent neighborhood you probably will not have problems.
Not quite sure where you're going with this paragraph. You say that the OP doesn't need an appraisal, and that if they had an agent, they wouldn't be getting one. That's because an agent has a great deal of sales information and comparable information at their fingertps and good ones know how to apply that pri cing information to a new listing. If the OP is going to be a FSBO, then they have to come up with the price one of three ways: 1) a WAG (wild-a$$ guess); 2) a professional appraisal; or 3) coax an agent to do a comparative market study for you, even though you won't be listing with them.
No one suggested that an agent was a replacement for an attorney. In fact, the OP said they would hire an attorney to do the paperwork. There are many tasks that an agent manages for a seller, but no reputable agent would suggest that their training is comparable to a law degree. We go to a contract class every year to review changes to the purchase and sales contract that is used by members of the state's association of realtors -- that doesn't make us attorneys.
Commissions are negotiable, certainly. The poster should have phrased it that "the buyer's agent will expect a commission." However, some sellers will refuse to pay a commission to an agent who brings a ready, willing and able buyer. The buyer may then choose not to purchase the house if they have to pay the agent separately on their own -- if it's part of the sales price, it can be subject to financing, but if they have to pay the agent directly, it's coming off the top of their funds.
I don't agree with your assertion that "bringing buyers" the smallest part of an agent's job. Managing a buyer is one of the most time-consuming tasks in real estate -- which is why many agents prefer listings to buyers. Buyers take a lot of time in counseling, scheduling, showing, comparables, research, offers, negotiations, etc.
Why is it unethical to discuss a key facet of buyer/seller psychology? The major conundrum with a FSBO: Both sides want the money that would otherwise be going to a real estate agent. The buyer feels that the seller would have paid it if they had an agent, so why not just give it to the buyer? As you can imagine, the seller takes exception to this, somewhat, figuring that s/he's the one saving the commission, why should s/he share it with the buyer? This is a fundamental conflict between FSBO buyers and sellers. You can discuss the role of a commission in this process as an abstract, of course, but at some point, you have to put a number on the table, with the understanding that commissions are negotiable.
Appraisal: I did not say that the OP does not need an appraisal. I said that it was nonsense to just go off and say that he needs one simply because he is selling without an agent. There's a big difference in these statements. I also said that it's irresponsible (and unethical, misrepresentation and perhaps illegal if it were an agent making these claims) to suggest that to get the equivalent of the services an agent provides, you need to get a professional appraisal for $500 or whatever. The fact is that an agent does not normally "throw in" a professional appraisal as part of their standard services, nor is an agent's 'market valuation' a professional appraisal so there is no equivalency. Very misleading argument to make.
If someone wants to make a case for better pricing strategy of a house or whatever by using an agent, I suggest that they make that case responsibly and ethically and not by using misleading information. Agents "give away" market valuations all the time because they are of little value in today's market. I've had agents contact me out of the blue offering to come by and do a market valuation of my home, even without any hint of interest in selling on my part. I'm not suggesting that a FSBO use an agent to value their home or not, just making the point that the "service" of putting a market value on the home is like air these days. Just a fact of life and how things have evolved. No longer a mysterious art that relied on information that nobody else had access to.
Attorney: I think we are saying the same thing and I already explained my position on this. It would be irresponsible to claim that a benefit of an agent is that they allow you to avoid legal expenses should unexpected problems arise (more or less the claim in the post being discussed). Are there situations where an agent's services can hypothetically help save on legal expenses? I don't doubt that. But that doesn't mean that it's a responsible and ethical claim to make.
Commissions: 'Bringing buyers' (i.e. connecting/introducing buyers and sellers) is not managing buyers toward the closure of the sale. I just repeated the common view here from agents that this is a very small part of the work.
Agent vs FSBO Sale Price: I don't understand your position on buyer/seller psychology. Nobody can guess what psychologies will arise and what dynamic there will be between a hypothetical buyer and seller. Can one hypothetical buyer try to negotiate a lower price because it's FSBO? Yes, of course. Can another hypothetical buyer not even think about it and not bring this point into negotiations? Yes, of course. Can another hypothetical buyer see it as them both saving transaction costs (i.e. in principle, generally "split the savings"). Sure. All you can be certain of is that there are a million and one factors in any negotiation and the use of an agent or not may or may not put pressure on price or impact the "psychology". And if it does impact anyone's psychology, how do you put a price on that if you're going to try to make representations to potential clients? You can't and you're on dangerous grounds trying to do so. Generally, the power dynamic in any negotiation is whether it's a buyer's or a seller's market. If it's a buyer's market, the buyer will drag out all kinds of arguments for a lower price. In a seller's market, they can all fall on deaf ears. The question is not whether you can discuss buyer/seller psychology. It's whether it's ethical and legal for an agent to represent to a potential client that they can net (or even gross) that client more than they would net (or gross) if they sold it themselves. And you seem to be saying that you see no problem in going even further and quoting specific figures (e.g. if you FSBO, you'll only get 330k but I can get you 350k). That's very very shaky legal ground and I would say that it's irresponsible, unethical, misrepresentation and potentially illegal unless you have a very strong basis for making these claims. Hint: speculating on what hypothetical "buyer/seller psychology" may or may not be is not a strong basis for making claims like this.
I sold our home in Annapolis MD (in a nice neighborhood on the first day it was offered) above the asking price as a FSBO with several competing offers. I sold the next one in Yorktown VA to a guy in my office with just a note on my bulletin board. Usually if it's a decent house in a decent neighborhood you probably will not have problems.
Walessp
Quote:
Originally Posted by westcoastforme
This
You had it under priced and left a lot of money on the table. Benny the pool boy could have sold it for what you did. How much you lost is anyone's guess but given the area and the facts you recite, I'd guess you could have bought a pretty good Mercedes for what you threw away.
Every time you tell this story another person will think you a fool. I'd keep this to yourself.
In 2016 I purchased a home through a realtor for $500k but found out immediately after closing that my company would be closing in 12 months. 12 months later I got a new job in a new location, so I sold the home FSBO. I listed it at $505k and got two offers, one with an agent for $507k (I prenegotiated a $10k fee to their realtor; 2%) and another to a buyer with no agent for $500k. I sold it to the unrepresented buyer and the sale went through without a hitch.
Unfortunately, the represented buyer lost out with a higher offer because it put less in my pocket. If only they had come to me without an agent, the house could have been theirs.
Interestingly- the original owners of the home walked away with $475k after commissions; I walked away with $500k only 12 months later.
We did it once, and could have done it twice (we changed our minds and took it off the market second time, bad decision, missed a good deal). Easy. Both times sold quickly. No pro photos, even. In fact, I think all we did was put out a sign, put it on Zillow (I think it was Zillow - it was back in 2000). Held one open house, had three offers. We took the one that was 5% over asking. And it wasn't under-priced.
Appraisal: I did not say that the OP does not need an appraisal. I said that it was nonsense to just go off and say that he needs one simply because he is selling without an agent. There's a big difference in these statements. I also said that it's irresponsible (and unethical, misrepresentation and perhaps illegal if it were an agent making these claims) to suggest that to get the equivalent of the services an agent provides, you need to get a professional appraisal for $500 or whatever. The fact is that an agent does not normally "throw in" a professional appraisal as part of their standard services, nor is an agent's 'market valuation' a professional appraisal so there is no equivalency. Very misleading argument to make.
What's misleading about it? An appraisal is a financial instrument, primarily used by lenders to make sure they're making a good loan. A Realtor's market valuation is their evaluation of what the house should sell for. The bank doesn't care what the realtor thinks, but at the same time, if he's off in la-la-land the house will never close since it won't appraise unless its an investor/cash purchase.
Quote:
Originally Posted by just_because
Attorney: I think we are saying the same thing and I already explained my position on this. It would be irresponsible to claim that a benefit of an agent is that they allow you to avoid legal expenses should unexpected problems arise (more or less the claim in the post being discussed). Are there situations where an agent's services can hypothetically help save on legal expenses? I don't doubt that. But that doesn't mean that it's a responsible and ethical claim to make.
It would be a pretty crummy attorney that couldn't write a contract for you that would have all the benefits of one prepared with the help of a realtor, assuming you engaged a Real Estate law firm.
An Enrolled Agent is not the same as a CPA and a CPA is not the same as a Tax Attorney. If an Enrolled Agent gives you crappy advice or you ignore/conceal information, you likely end up needing the services of one of the other two. Same type of thing.
Quote:
Originally Posted by just_because
Agent vs FSBO Sale Price: I don't understand your position on buyer/seller psychology. Nobody can guess what psychologies will arise and what dynamic there will be between a hypothetical buyer and seller. Can one hypothetical buyer try to negotiate a lower price because it's FSBO? Yes, of course. Can another hypothetical buyer not even think about it and not bring this point into negotiations? Yes, of course. Can another hypothetical buyer see it as them both saving transaction costs (i.e. in principle, generally "split the savings")
You're technically correct. However, I would imagine real world experiences would prove many of those hypotheticals to be rare.
I bought my house from a FSBO. I was the tenant, and when he put the house on the market I made a low, but not shockingly low, bid. After some haggling we agreed on a price and I'm still here. We both saved a lot of money.
You had it under priced and left a lot of money on the table. Benny the pool boy could have sold it for what you did. How much you lost is anyone's guess but given the area and the facts you recite, I'd guess you could have bought a pretty good Mercedes for what you threw away.
Every time you tell this story another person will think you a fool. I'd keep this to yourself.
How in the heck do you know his house was under priced?
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