[photopress:fsbo_article1.jpg,thumb,alignright]Over the holiday, we were talking to a man in Shoreline getting his house ready for sale in the Spring of 2007. I promised to give my thoughts on his “selling it himself”. Clearly agents aren’t experts on how to sell your house all by yourself, in fact, we are quite the opposite. But I have helped people do this from time to time over the years, and am genuinely happy when they can achieve their stated goal, whatever that may be.
I found this article at the same place that I found the photo. It’s as good as any out there, I’d say. If anyone has others to recommend, please post them in the comments section.
I know some companies, like Microsoft, have internal online forums where they can post their For Sale By Owner Properties. If anyone can post results of that method, we’d like to hear from you.
Craig’s List, of course, is a good place to put an ad, but you pretty much have to stay on top of re-doing it when it expires.
I think any method is worth trying for 30-45 days IF you try it early in the year. The downside of For Sale By Owner, is if it doesn’t work, and you get on market late, you can lose the best months of the selling season.
If you are planning to “honor agents”, in other words allow for a Buyer Agent Fee as a FSBO, then you might as well pay the extra to be a “For Sale By Owner” in the mls. There are several companies that offer this service, and while it is true that some agents may boycott you and not show your house, if you have one of those houses that will “sell itself”, then that should not affect you much.
The main advantage of being in the mls, is that buyers who look on the internet at homes will not miss you, even if their agent does. They will see your house and ask their agent to see it. Agent’s might not show your home if the buyer doesn’t notice, but I doubt they will refuse to show it, if their buyer client asks to see it. “Bidding up” is one of the advantages of being in the mls. Getting a single buyer to pay what you ask is OK, but getting a couple who bid each other up is more likely to happen, IF it is going to happen, based on the higher exposure afforded you by being in the mls.
That said, my main advice is to be LISTED, really LISTED, by April 15 or May 1. So if you are going to try to sell it yourself, try not to miss the main selling season by doing it too late, or for too long. If it is going to work, you will probably know that within the first 10 days to two weeks.
If it were me, I’d try no fee at all for two weeks with a sign and Craig’s list. Then I’d tier up to a “FSBO in the mls”, and then full list, if needed, after 30 days. That gives you 45 days of trying without full fees. If it is going to work, I’d say 45 days to 60 at most oughta do it.
Try having some relative strangers look at it before any real buyers. I often ask people outside, neighbors mostly, to walk through and tell me anything negative that they see. After looking at the house while staging it for hours or days, I sometimes get blinded to small details. Every single time, they notice some obscure little thing that I can fix before real buyers see it. It’s very helpful and people are more than willing to help. Don’t ask them, what they think. They may feel obligated to say it looks great. Specifically ask them to find negatives.
Just my thoughts. As I said, we in the business are clearly not the experts on how to do it without us 🙂
Ardell,
Thanks for starting this subject.
The Redfin site was informative and in their comparison page it lists all the different services provided by them as compared to a FSBO mls listing and a traditional agent.
My first question is how can they do all that and still make money?
It seems like there would have to be corners cut somewhere but I really have no idea. And then the one thing I would really want help with “property review to set price” they did not offer. There is also no help with “how best to fix up the place for sale” which is what I have been trying to get here for free. And that seems like one of the most important sale preparation steps, at least it is the one I know the least about. The price is right as long as Redfin is efective but I am suspicious of a free lunch.
Also after reading all this and thinking about it, what I meant by selling it myself is to list on the mls and offer the 3% commision to the buyers agent. Although it might be a good idea to try it for two weeks on Craigs list like you suggest. Being in the starter home price range I want to prepare and price it to bring in multiple offers so it will sell quickly. Without being on the mls that might be hard to do. Again I am assuming that we will have the market that Eileen is thinking is on the way back as per her Nov 22nd post about Residential sales voume
Is there a way to put it on the mls in conjuction with Craigs list, so buyers would see it for two weeks with a 1% sellers comision and if it dosent sell then bump the commison up to 3% so that agents would show the property. Or once it comes out at 1% will it be ignored even if the commission changes. In other words would it lose momentum from listing at an initial 1% sellers commision or is that scenario even possible to do whether bad idea or not?
Honestly Martin,
With all you are doing to the house and the price range, it’s hard for me to believe you will have trouble. But I don’t know your location well as to negatives.
1% buyer agent fee makes no sense in any way, shape or form. Agents are not likely to notice the change in commission, it’s not that obvious. I wouldn’t take that risk, as when you are NEW in the mls, you get the most attention. I’d say “no agents” on Craig’s list and sign, to see if if that brings you a buyer direct…1% won’t really make any difference, so why waste it. I had a very bad experience recently where an agent agreed to take about 1.5%, but then talked the buyer out of the house at time of inspection and sold him one where he made 3%…not worth the risk. But I’m still smarting from that one on behalf of my seller client, so I may not be totally objective on that at the moment.
You might get away with 2.5%, buyer agent fee, as most agents don’t make a distinction between the two. But I wouldn’t go lower than that.
I don’t know what Eileen’s fees are for limited service, but I’d have her come look at it and consider that option, before “well known discounters”. We don’t work together, so her writing here is not why I say that.
I recently sold a house that was an mls only company down around 93rd and Aurora. The owners said they had more showings in the first three days than they had in the 6 weeks they were listed that way. They were in escrow in about 5 days. It could have been other things…so hard to say if agents actually do not show certain company listings. Even if they get paid the same 3%, some don’t want to support the trend of FSBO’s in the mls.
Again, given your price range and how nice it will look when you are done, I seriously doubt you’ll have trouble selling it.
I don’t think there are any negatives on this street is is quiet with little traffic, bus 1/2 block away that goes staight downtown.
Point well taken on the 1% fee, won’t do that.
So from what you are saying, and it makes sense, it would be better to go with an outfit like Eileens than one like Redfin.
The commision with Eileen might be higher than that of Redfin but to other agents it will not apear to be a discount listing that they would choose not to support, and thus there will be more showings.
Martin,
Well, I think given we have tried our best to give you honest and helpful adivice, it wouldn’t hurt you to give Eileen a shot. Seems the right thing to do to talk with her, at least.
As to Redfin, everyone knows how much I like Redfin. I was actually surprised when you brought up the actual name of a company, as it is clearly bad ethics for me to say you should or shouldn’t list with one company over another.
Redfin has been better known on the buyer side than the seller side, and my respect for them in the industry is due to their recognition that the buyer controls their side of the table. I’ve passed a Redfin sign on the road, but clearly there are other companies that come to mind when I think of discount listing companies. I wouldn’t have pulled Redfin out of that hat, in my mind. I don’t know much about them on the listing side.
Truth is, most any company is willing to negotiate the listing fee, which is what makes Redfin so be-all-end-all in their break through efforts to educate the public with regard to how to treat the buyer agent fee. Seller offers it in the price, and buyer and buyer agent take it from there. I so wish that concept would become the norm in the same way that seller’s negotiate with their agent.
OK, I’ve squirmed in the hot seat long enough to come up with an answer 🙂 ALL companies negotiate with sellers. Interview three or four, even the ones you might think have a “set” fee. Decide which one is best for you and then talk price.
When we were talking earlier, I was thinking about the mls only options that you never meet, and send you a lockbox in the mail. I honestly don’t know how Redfin operates on the listing side. So call them and a few others and interview them. The ones I was referring to would not come, you would not get to meet with them at all, that is why they are “for sale by owners in the mls”. I’m pretty sure Redfin does not operate that way.
You got my point, so you weigh the options weighing the pros and cons with price. A primary consideration will be whether or not you have a lot of competition in the market, or you are the “only game in town” at your price. You already have the competitive edge given your price range. Question will be if you maintain that edge by the time you put the property up for sale, or will inventory have increased to the point where you no longer stand out in the crowd. So make sure you check all homes actively listed for sale on the day that you list.
You mentioned waiting for some pink flowered tree to be in bloom, I’d put you at 1/2/07 before inventory heats up with a photo of the pink flowered tree from days gone by included in the mix.
No hard and fast answers, but first time buyer priced properties may do better the earlier they come out in the year. Not before, or you get the 26xxxxxx vs. 27xxxxxx listing number.
This is a general note concerning the “non” MLS sites for searching properties: They tend to be more difficult to maneuver. Basically, it is more difficult to search these sites and the information is lacking.
For instance, as an agent, I post on craigslist all the time. However, I provide as much information as possible concerning the property. Many FSBO posters have little information… making the search process more difficult or time consuming. Maybe they think they are tricking us into at least calling them.
When researching for buyers, I search all sites possible… but most FSBO ads and sites leave a lot to the imagination. A little mystery is great in the dating scene but a major buzz kill when trying to find a great property for my clients.
Soooo… FSBOs sellers and sites, please take the mystery out of your postings. Us agents actually want to sell your home to our clients.
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Here’s my 2 cents. Let’s say that by going FSBO the seller actually gets an offer from a buyer without an agent. But now what? Sure, they can bring their buyers to an attorney, but is the house priced well enough to pass the appraisal? Are the buyers approved from a reputable lender or an online lender that doesn’t know the market, gives a teaser rate, makes things sound great but then says your lock expired and the new rate is 2% higher. Who gets the inspector, who negotiates for items that may or may not need another inspection and/or repair. What happens if there’s no lead based paint disclosure, mold, form 17, etc. Not to mention OSS requirements, farm land in Snohomish County, no legal, and the buyer uses that to get out of the deal.
Having a listing agent is so much more than simply finding a buyer. The skill comes in keeping the buyer and hurdling all the problems that realtors spend their days solving, that they’ve seen over and over and know how to solve.
I guess that’s why I like the fee for service model. There is a list of all the things that the listing agent does. When broken down, 3% is cheaper, but at least the seller has choices. If they do get a buyer through Craig’s list, they so often don’t know what to do next, between, “I love your house and want it” to transferring the keys.
And, if there is a buyer’s agent involved, the agent must work for that buyer, will negotiate and owe allegiance to that buyer and must do what’s best for that buyer. Where does that leave a seller? I suppose it’s the same as a do it yourself divorce. Do you want to trust the other party to even consider your position or do you want an advocate. There’s a reason why FSBO’s sell their homes for 18% less that sellers with representation. Again, just my 2 cents.
Hey, its America. I’m indifferent to FSBOs. I feel they or the whole trend have little or no impact on my business. And if a “non-listed” seller/homeowner wishes to enter into a negotiation with me, well then…
By the way, nice photo of the For Sale sign. That pretty much speaks for itself. Kind of like ‘Eat Here’ for a restaurant or “Rooms’ for lodging.
I’ve been toying with an idea for awhile now on how to offer some advice to unrepresented sellers. To be clear, my market is different than yours in Washington. Sales are down, the numbers don’t lie.
I have a friend that is thinking about selling his home on his own. He knows plenty of Realtors and doesn’t want to choose one and risk any friendship with others (I told him that it wouldn’t hurt my feelings at all if he choose a different representative than me).
But the advice I gave him was to put a tag line on his marketing that reads something along the lines of … “Buyers OR buyers designated broker recieve X% of sales price at closing.” The ‘X%’ can be whatever my friend thinks is appropriate.
If he gets an unrepresented buyer, the buyer can use the funds in escrow to help with the lending or for down payment. If my friend is met by a represented buyer then the broker will get paid.
Lastly if any of my friends other Realtor friends brings a buyer… then they get paid and no feelings are hurt.
I’d offer this to any unrepresented seller as free information or a tip… no problem.
Ardell, I like reading your blog entries. This one really caught my attention because I work with FSBOs over here on the East side of the state. I’m not an agent, I build websites for them. We actually just started a FSBO blog at http://blog.spokanebyowner.com/. It’s helpful to hear your take on by owners. Over here about half of our customers sell with a buyer’s agent and the other half don’t use an agent at all. Of course, I think their success has to do with help pointing them to the right proffesionals (regarding Eileen’s comment) and the amount of information on the websites we build (regarding Todd’s comment).
Hi Deanna,
Like that A to Z post. Are you a flat fee based listing company? Do the listings also go into the mls? Do owners have that option? What is your advice to sellers regarding Buyer Agent Fees?
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You liked the A to Z I copied from your post? Ha ha…
Well, we do have all flat fees and we consider ourselves an advertising company. We charge fees for the advertising and then direct them to other local resources if they need help with any other part of the transaction. Listings are not automatically added to the MLS but do have that option.
As far as agent fees. We usually recommend all or nothing. Either expect to pay %3 or don’t expect an agent unless it’s a higher end home. We assume that since most houses will accept 3%, an agent will avoid showing one that doesn’t. What do you think?
For all the years I’ve been an agent, I have printed out all comparable sales and shown the owner what those that have sold have offered. This way “if what the market will bear” in terms of what agents will “accept” changes, I’m not quoting some fixed percentage.
From what I can see, 2.5% works just as well as 3%, unless the home isn’t comparable for some reason to those who sold with that offering. If everyone started offering 2.5% then maybe 2% would work in the future.
I haven’t seen offering a higher amount compensate for property weaknesses…nor should it. As to the “A to Z” LOL, I didn’t invent the alphabet, so didn’t attribute your A to Z to “copying” me.
What is the rules/law about FSBO after the listing is expired? Our house was on the market for 8months and now I would like to try and sell it myself. I have 2 potential buyers that are interested but they were shown the house by agents earlier. What are the obiligations to commisions for that agent?
The buyers may or may not have obligations to the agents they were working with. It depends if they were in contract or not. Generally speaking if they were shown the properties just a few days before it expired, it doesn’t seem right to cut everyone out. I’m sure none of my clients would proceed without me.
Consumers are not subject to mls “rules” nor are their laws on the subject. Your listing contract would decide. Sometimes there is wording covering a short period of time after the expiration date. Clearly if someone saw it the day before it expired and the reason you know they are interest is a result of the showing from when it ws on market, you shouldn’t be looking for a reason not to pay as you promised when you put the property in the mls. But most times, I don’t think you have to care about those who worked for you in good faith.
I want to honor our contract. I have already told one guy who I know our agent showed him the house many times that his offer needs to be done through the agent, and I told the another couple who had there agent show them the house that they needed to discuss this with their agent. The potential buyer I am working with myself didn;t see the house with any one but me. Do I have wait to sell it? What if someone wants to be shown the house and doesn’t tell me they have already seen it with an agents?
Colleen,
It is your agent who would be due the commission and your agent who would have to pay the agent of those two buyers, not you. So sending them to their agent isn’t the answer. You need to talk to your agent OR have an attorney look at your contract to see if you might have to pay a commission after you close with a buyer thinking you have no commission to pay.
We can’t tell you what is in your contract. Usually there is a “protection period” in a listing contract to prevent a buyer and seller from coming together during the contract, and then cancelling it so they can go around the agent(s). Basically you told us your agent worked for eight months (during the worst market) and now that the market is finally a little better and it looks like the property can finally be sold, you want to do it without the agent who worked for you for eight months.
Why are you not asking your own agent what would be appropriate in this case? Listing agreements are usually one page long not counting the input data. Two pages at most. If you don’t understand what it says, it can’t cost much to bring it to an attorney.
I can only assume that you and your agent did not part on good terms. You can always call the broker of that company, if you don’t want to speak with the agent you had for 8 months.