For sale by owner (RE agent, foreclosures, 2%, agent)

[Bill Keegan]

Originally Posted by cl723

Didn`t you and others have to go to school to learn the trade of real estate? That`s what I`m trying to do, is to educate myself in learning how to do this. This seems contradictory when you yourselves had to learn about it before you could even get your license.

Actually, the classes that you need to take in order to get the license are about the laws and legalities of selling real estate. They don't teach you anything about marketing & selling real estate (which is what most would consider the tradecraft). Those things may or may not be taught by the broker with which a newly licensed real estate agent affilliates himself.
The point is that marketing and negotiating the sale of real estate is a reasonably complex project that requires a fair bit of knowledge for it to be done correctly and well. By asking a question as simple as the one that started this thread, you are telling most of us that you don't have that basic knowledge, and might be hurting yourself by trying to do it on your own.

My answer to that thread starter, for what it's worth, is that it depends on your location. Here in NJ, most everyone uses an attorney to complete the transaction, and I would recommend that anyone considering selling their home without the assistance & representation of a professional real estate agent should line up that attorney at the start, and talk to them about making sure everything is done correctly, from a legal standpoint. (The attorney still isn't going to give you marketing or selling advice.) In other locales, you might get different advice.

[mortimer]

Originally Posted by cl723

Brandon, I don`t get what you are trying to say. Please spell it out.

I was clear on this from the beginning.

Originally Posted by cl723

You are a realtor and apparently you don`t like it when people can sell on their own.

I doubt that.
Lots of people use other realtors where Brandon doesn't get
a dime from the sale and Brandon doesn't get bothered by that.

In your original question:

Originally Posted by d723

Should I have a real estate attorney lined up ...

You asked a good question.

Why don't you go visit one and pay for the consultation?
Then your question will be answered.

What no one posted, but should have was that if you have
to ask the question, then you are not qualified to sell a house
on your own. There is a reason that people pay a realtor to
do it for them. They are professionals and professionals cost
money. You pay for an accountant if you can't do your own
taxes and you pay for a lawyer if you don't know the law.

I would rather do what I do for a living and pay a realtor to
do what they do for a living.

If you go out and FSBO without knowing what you are doing, you
could easily waste a whole year screwing around and not getting
your house sold. Time is money - at least it is for me.

I know people who are serial FSBO sellers. They know what they are
doing. Good for them. I also know people who buy old crappy homes
and fix them up. Good for them also. Those things are not for me.

[Brandon Hoffman]

Originally Posted by cl723

Brandon, I don`t get what you are trying to say. Please spell it out. You are a realtor and apparently you don`t like it when people can sell on their own.

Quite frankly, I don't care if you go FSBO or not. Some are quite capable of selling their own home. They have the time and knowledge to be successful. The fact you're here asking such basic questions tells me that you probably would be better off having representation. The mistake that most people make is they believe its as simple as putting a sign in the yard, maybe an ad or 2 on craigslist, and a buyer comes along. Then they fill a few blanks on a contract and it magically closes.

While it does occassionally go like that, plenty of FSBO's succeed in getting a home under contract but then aren't prepared for the trouble shooting when a problem pops up. Some don't realize the times they need to be available. A home listed by a professional is always available, most working couples is available when they aren't at work. Some don't understand the paperwork. At any rate, only 13% of FSBO's were successful in 2007. If you're asking such a simple question, I suspect you would be better off with representation. After all, a Realtor works like a doctor, lawyer, accountant, etc in that they sell their time and knowledge in exchange for pay.

[Tish Thompson]

Uhm...really??? You probably need to either get an agent or pay an attorney to help you.

Originally Posted by cl723

Should I have a real estate attorney lined up before I put my house on the market? How does this whole process work?

[StealthRabbit]

Originally Posted by cl723

Should I have a real estate attorney lined up before I put my house on the market? How does this whole process work?

as mentioned... Where are you? That will dictate some of the process, but generally no need for a lawyer, UNLESS there are complexities. I use them for multi-property commercial transactions, and farms, but rarely for houses. How well can you read the legal and survey?, Do you understand encumbrances? I used one on my first House (age 19 and financed by owner & a second by seller) After learning the process and establishing really solid relationships with title and closing officers I rarely feel the need for a lawyer, but won't hesitate to use one if necessary.

Originally Posted by gbone

Once you delve into this a little more you will find that it is much easier to sell FSBO when the market is a seller's market. When the market is declining(or a buyer's market) it is generally much more difficult to go the FSBO route.

True, but not impossible, just a bigger challenge

Originally Posted by cl723

Brandon, I don`t get what you are trying to say. Please spell it out. You are a realtor and apparently you don`t like it when people can sell on their own.

I wouldn't be judgmental. Some realtors are intimidated by FSBO, but you can also do a FSBO w/ MLS for $199 and set a 'seller' premium at 3-3.5% Many realtors will still not show your property, but that is often a 'pride' issue, OR you have not been EZ to work with. Just be professional with agents and clients. Don't be a pain.

Originally Posted by mortimer

Lots of people use other lawyer...

Why don't you go visit one and pay for the consultation?
Then your question will be answered.

....
If you go for a consult and ask a lawyer I will bet... they will say you need one. JMHO I found it good to have a lawyer as a friend and pay them well for a few 'part-time' activities.

Originally Posted by mortimer

I would rather do what I do for a living and pay a realtor to
do what they do for a living..

I would GLADLY pay a good realtor the same hourly rate that I pay my attorney, (for specific time on my sale + advertising) but usually 'commission' is about 10-50x what my lawyer makes, AND I often have to educate the realtor. AND arrange the closing and related docs.

[middle-aged mom]

About 12-13% of homes for sale during the bubble were FSBO. That number is substantially less, in the current market.

The job description of a listing agent is to educate the seller, create excitement within the marketplace for the property and negotiate.

The majority of the U.S. is in a declining market, right now. Sellers decide to set or chase the market. Those who set, get sold sooner and for more net proceeds than those who chase.

In most cases a home needs to be sold at least 3X, to the local brokerage community, to buyers and to the appriaser. Other agents and buyers need to see that the home is something special which is a combination of location/condition and price.

If you are not the best value within your local market, why is anyone going to consider your home versus all the others? Being the best value presumes you have been inside all recently closed properties and the active competition and know their strengths and weaknesses compared to your own place.

As for negotiation, if you cannot defend your property's value versus the facts of your local market, it's likely a waste of everyone's time. The value of your home changes constantly, dependent upon closed sales, new listings and repositioning of the competition.

There are good and not so good agents everywhere, just as there are good and not so good plumbers and teachers, everywhere. We get into trouble when consumers think all, within any profession, are alike.

[middle-aged mom]

Originally Posted by StealthRabbit

I would GLADLY pay a good realtor the same hourly rate that I pay my attorney, (for specific time on my sale + advertising) but usually 'commission' is about 10-50x what my lawyer makes, AND I often have to educate the realtor. AND arrange the closing and related docs.

When one hires an attorney to litigate on their behalf, they either pay an hourly rate with an upfront retainer or more commonly they hire the attorney on a contingency basis. The attoney analyzes the case and determines the odds of winning before taking a contingency assignment.

Contingency means the attorney is assuming the business risk and therefore receives a greater reward than if there were no risk of getting paid. If the case is lost, the attorney's bill is limited to out of pocket expenses and court costs. If the case is won, the attorney's bill is usually 30-35% of the financial award, plus out of pocket expenses and court costs.

There is a risk -reward relationship associated with all contingency payments.

There remains no shortage of real estate brokers/agents in any market. I am hard-pressed to think of a more competitive business.

Some brokers/agents will work on an hourly basis as a part of their menu of services. Generally speaking, consumers do not embrace the concept of hourly rates well....and prefer the business risk of the transaction remain with the broker/agent, which is why the contingency compensation model persists.

[rjrcm]

MaM - excellent post! Sorry, can't rep you. It's exasperating that many complain about our compensation, yet want us to assume the risk of not being payed with no offsetting reward.

I just completed a sale as a buyer rep for a couple that started working with me over 11 months ago to find a home. On the surface, I received a nice commission check for a cash deal that closed in about 2 weeks. Breaking it down into hours of service for all the previous counseling and time investment, not so much. And what if they had never purchased?

Edit: to be clear, this couple did not complain about my compensation, in fact, they were willing to pay me themselves if they bought a FSBO not offering buyer agent compensation. One is a commercial Realtor.

[middle-aged mom]

I bought 30 and sold 29 homes before I got my real estate licence in all kinds of markets. All of these transactions involved brokers/agents. It seems I was always working with an agent, somewhere. I have seen the good, the bad and the ugly.

The best agents were local agents who knew their dirt, better than anyone.
The most common and valued characteristic they all shared was that they took the time to educate me.

The internet gives consumers a lot of information. Someone needs to make it relevent to avoid costly consumer mistakes.

There are many professions that charge an hourly rate for service. Some charge by the quarter hour and this includes the time they spend enquiring about your family's welfare and answering client questions.

Translating this to real estate.....it would be to the listing agent's benefit to encourage seriously over priced listings. It would be in the buyer's agent's best interest to encourage the buyers to see another round of 50 properties.
The agent get paid regardless of achieving their client's objectives.

If there was a better way of getting sold or buying a home, than true and competent full service brokerage, I would embraced it.

[eric#1]

Originally Posted by cl723

Should I have a real estate attorney lined up before I put my house on the market? How does this whole process work?

ans. to q #1
1. yes, if you want legal advise.
2. no, if you don't want legal advise.

ans to q #2
1. Find a buyer.
2. Tell them the good, bad, ugly about your home.(disclosure)
3. Negotiate a contract.

There tends to be a bunch of stuff after # 3 but it depends on what is in the contract in order to know about "this whole process". No one could give you any accurate advise on what to do without knowing what is agreed on in the contract.