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Despite enjoying the banter in the thread from the "who needs real estate agents?" crowd, I had an interesting observation regarding an FSBO property currently on the market in my neighborhood.
Some background:
Average home (sale) price around here for the last 3-6 months has been between $350k-$400k. Average DOM has been about 5. That's based on four homes that have sold in the neighborhood in the calendar year.
This house is at the higher end of the range as far as size, amenities, etc. Owner first listed it at $525k, with a statement in the listing that they would "only work with principals, no agents." Yikes.
That was a month ago. The property is still listed, but they dropped the price down to $489k, and now there's a rather conciliatory statement at the bottom of the listing that says "Owner willing to negotiate rate with buyer’s agent."
A local agent I know said that after they came out of the gate with a statement that they would only work with principals the place was pretty much ignored by the locals. Would this be the case for any of the agents in the forum as well? I would assume that it set a tone that suggests that the seller is going to be less than cooperative when it comes to working with a buyer's agent?
Of course, this is probably moot as their ask is stupid high, like close to $100k over current comps.
RM
Really, it depends on the client and the market.
I generally run a pure (non-MLS) FSBO past the clients before I reach out to the seller, to see if they are interested. I would not bother the sellers if I didn't have a bona fide buyer interest to present.
I can imagine clients being put off by the statements you quote, even if they were willing to overlook pricing issues. So, if they told me to forget it, I would not engage the sellers. If they said it was worth pursuing, I would.
Sellers often do amazing damage to themselves when they think people should genuflect prior to talking to them.
Recent sale less than half a mile from me.
"FSBO" sign in the front yard. I stopped, mentioned I am an agent and asked what the price was. Lady said, "We haven't decided if we will allow agents."
I said, "OK. I have two buyers for a home approximately like this."
Her daughter perked up and said, "$475,000."
Me: "Thank you."
Texted the number and requested photos or a link. No reply.
It sold fairly quickly. $459,000.
Probably about $30,000 light or more, but no commission payment. No idea if it was As-Is or if the seller paid any closing costs. And, I never got to see the inside, of course.
But, in this neighborhood, good houses are going for 10%--20% over list price in a whirlwind. Maybe it isn't a great house. Or, maybe the buyers got a steal. I don't know.
But, I wouldn't have told them I have buyers for that niche unless I did. Unfortunately, some agents would pester them.
Despite enjoying the banter in the thread from the "who needs real estate agents?" crowd, I had an interesting observation regarding an FSBO property currently on the market in my neighborhood.
Some background:
Average home (sale) price around here for the last 3-6 months has been between $350k-$400k. Average DOM has been about 5. That's based on four homes that have sold in the neighborhood in the calendar year.
This house is at the higher end of the range as far as size, amenities, etc. Owner first listed it at $525k, with a statement in the listing that they would "only work with principals, no agents." Yikes.
That was a month ago. The property is still listed, but they dropped the price down to $489k, and now there's a rather conciliatory statement at the bottom of the listing that says "Owner willing to negotiate rate with buyer’s agent."
A local agent I know said that after they came out of the gate with a statement that they would only work with principals the place was pretty much ignored by the locals. Would this be the case for any of the agents in the forum as well? I would assume that it set a tone that suggests that the seller is going to be less than cooperative when it comes to working with a buyer's agent?
Of course, this is probably moot as their ask is stupid high, like close to $100k over current comps.
RM
Are you saying it was ignored by local agents or ignored by local buyers?
The majority of buyers want to use an agent. In part because it’s “free,” but also because buying a house is a very important decision and they don’t want to screw it up. If a buyer is using an agent and sees a FSBO that isn’t offering anything to agents, chances are they’d have to pay their agent out of their pocket (if the FSBO would even work with the agent at all), which many won’t want to do unless maybe they’re getting that much of a discount on the property. So that’s the buyer ignoring it, not the agent (nevermind if the house is overpriced to begin with).
Are you saying it was ignored by local agents or ignored by local buyers?
The majority of buyers want to use an agent. In part because it’s “free,” but also because buying a house is a very important decision and they don’t want to screw it up. If a buyer is using an agent and sees a FSBO that isn’t offering anything to agents, chances are they’d have to pay their agent out of their pocket (if the FSBO would even work with the agent at all), which many won’t want to do unless maybe they’re getting that much of a discount on the property. So that’s the buyer ignoring it, not the agent (nevermind if the house is overpriced to begin with).
Back 27 years ago when we moved from Orange County to Las Vegas we first rented a small home for 6 months. We then made contact with a well experienced agent in the NW area. Probably looked at 20 or so homes with her over 3 month. No joy.
While driving around exploring we came upon a FSBO. Called them and then went to see the home. Virtually a perfect fit for what we were looking for. Got together with our agent and determined a reasonable price. I negotiated that with the owner and came to a reasonable deal with the owner including 1.5% to my agent for carrying out the transaction. Went perfectly smoothly.
Only problem was our rental house decided to sue us for the last two months rent even though we had found an acceptable renter to take the rental when we moved out. The owner was glad to help us do it but apparently their RE Agent told them we still owed the two months. Went to small claims court where the judge threw the owner out.
Four years later we both got licensed and began sell real estate which we both enjoy. And we check out any interesting FSBOs nearby.
1. Of course, when it's "easy" to sell a listing, then listing agents are "overpaid". At the same time, I think you see a LOT of quality agents negotiating their commission down right now. So, in a "Seller's market", then the Listing agents may be overpaid. And the Buyer's Agents, who write offers on multiple homes before succeeding ("sell" 7 homes to have success once) are underpaid. Logically, when we're in a Buyers market, the opposite holds true.
2. If for whatever reason I get the Seller additional $, does it matter if it takes me 5 minutes or 5 days of effort? Does my compensation "change" on some hourly basis?
3. You'd find very few Realtors that don't agree that the barriers to entry - the education requirement, the professional responsibility, the fiduciary duty aspect - shouldn't be much higher. Because we "pay the price" for all the crappy agents constantly denigrated on forums like this one.
4. At least 1 company has tried the Buyer ala carte, and quickly failed. $50-100 per showing ($100 minimum per trip), $1K to write an offer, $1K to negotiate repairs, etc. And a big rebate of commission at the end. Nobody used them, or many that did welched on paying (like, disputed credit card charges for the showings).
Agree with everything.
I know #2 in particular is not specific to “per hour”, but if we’re going down that route Mike was probably on the right track as far as starting around $100/hour for a good agent.
For a salary based on 40 hours, that’d be $208k/year. A nice salary, but not really extravagant and along the lines of what plumbers, electricians, etc charge. And that’s also not including expenses, assuming the client wouldn’t be paying for those too.
Due to the hot market, combined with the thought of paying at least $15k in realtor fees, I have my house FSBO. I have it on Zillow and about 10 Facebook Marketplace real estate groups. I had a couple agents show it, 1 low offer, but they backed out (long story--wasn't worried about major items on the home inspection but still backed out over the minor ones as their offer was contingent upon it), a 2nd low offer we flat out refused, and I've shown it twice myself. I have a survey, current home inspection, multiple photos, 3D tour on Zillow, etc. I've also done most of the work, even having a lockbox on the house for agents to show it, if they desire. I've fixed some of the items on the inspection, but it's an old house, and we are selling as-is. The location is very desirable. A comparable house sat on the market 2.5 months, but finally is under contract for a respectable amount.
It's been on the market 3 weeks. I dropped the price 2.9% after 2 weeks. I haven't yet purchased a flat-fee MLS. I'm wondering if I'm just going to have to throw in the towel and pay the ungodly commission. I've shopped around realtors, and I'm told my price is right on target by one broker who I might use. If I go with an agent, I'm going to have to accept an offer at or very near asking price to pass along those fees to the buyer.
We just purchased our current house FSBO. (Some relatives knew the people). It was a piece of cake. I know there's been multiple threads with this huge debate on how realtors don't earn their fee with huge backlash from agents on here. I get it. They're defending their livelihood. I personally don't think it's anywhere worth what I'll pay. It wasn't when I sold my last house---it was quite disgusting what I received in turn for what I paid. I just look at it like this: $15k invested in my kid's college account in an aggressive growth fund at 7% is over $50k in 18 years. The thought of spending that for fees is nauseating; especially when I prepare contracts as part of my job. I guess I went into the wrong line of work. Anyway, I suppose I could just sit on it longer. My ad states that I'm willing to work with a buyer's agent--commission negotiable. I'd rather just pay someone a flat fee of $1k-3k to handle it; that's about all it's worth workwise. The house will sell itself when the correct buyer comes along, and I've done all the other due diligence.
Anything else I can do to avoid an agent? We have already moved, so the house is empty, and showing it after work has worked out well for my schedule, as well as prospective buyers so far. Is the flat-fee MLS worth it for the $150-300 and does it drive in that much more traffic?
YES. You have to get in mls. You will pay 2.5 % or lower (negotiate) but you can get tons of people. Your neighbor taking 2.5 months to sell is a very long time in this market. Every city I look at homes go in 1 to 6 days unless something very wrong with it that even a fixer upper doesn't want.
You are hidden on zillow and other places. You are under "other listings" and almost nobody looks there, yes, you are nearly blackballed. We tied to do fsbo. They also have classified here on C.D. that I could not find.
And, if you start at less than $100/hour, you are shorting me.
Sorry, but you're not worth anything close to that.
Any certificate job that can be had in 2 weeks is not worth more than $15-$20/hr.
Fast food workers undergo more training.
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Yes
