List with a realtor vs FSBO?

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Topic Author
mnnice
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List with a realtor vs FSBO?

Post by mnnice »

We are getting ready to move on and sell our house. Not sure if we should hire a realtor or try it ourselves?

I will try to share the germane information. Please ask if you have any questions?

Real Estate climate—
Seller’s market not much inventory that is existing homes. Midwest Small town (~15,000) commutable to much larger community. House down the street that would be a pretty good comp was sold as is in just a couple days. I suspect it had significant foundation issues. Most of the listings here are new construction and 45-50% more expensive.

House—
Boring little ranch. Lower end of the market here. Most of the mechanicals are newer (appliances, washer, furnace, water heater). Roof is 20 years in on a 30 year roof. AC is ancient but works fine. Well landscaped and cute brick exterior. Inside is clean with fresh paint. Some of the flooring is fine other parts need a refresh. Definitely a place you could move in with your kid and dog and not need to do anything.

Sellers—
Time affluent semi-retired folks. Not legal or real estate professionals but pretty knowledgeable about the market. Not averse to showing it.
Last edited by mnnice on Mon Oct 23, 2023 9:50 pm, edited 1 time in total.
stan1
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Re: List with a realtor vs FSBO?

Post by stan1 »

This really is a personal choice. There are people who will tell you that you can and should do it, no problems. The wording of your post reads like you are close to deciding to FSBO but want permission.

The important point is setting the list price. Some FSBO sellers over-price their home and it sits on the market for a long time. While some will say "I'm waiting for the right buyer" that's typically not an approach that will get a sale. If the market is fast moving you are better getting multiple offers within a short amount of time and letting them bid against each other to set the sales price. If you aren't serious about selling "maybe if we get the right price" I'd say wait until you are ready to sell at the price determined by the market. Putting out bait to see if you get a nibble is not a good approach to a real estate sale, and that will take a lot of your time and be more disruptive of your lives. When you decide to sell approach it like a business transaction.
clydewolf
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Re: List with a realtor vs FSBO?

Post by clydewolf »

There is more to selling real estate than knowing the market.
There are many legal items, and how to attract the right prospective buyers.

The real estate agent deals with these items daily. You deal with these issues maybe a few times a lifetime.
stan1
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Re: List with a realtor vs FSBO?

Post by stan1 »

clydewolf wrote: Sat Jun 03, 2023 11:43 am how to attract the right prospective buyers.
What do you mean by this? Are you referring to someone who is prequalified for a mortgage appropriate to the expected sales price of the house? Today people use websites so if the property is on the websites via MLS it will get views. If someone is going to try FSBO without putting the property onto the websites (not putting it into MLS) I'm not sure I would recommend that in most cases. You can pay a flat fee to put the house into the MLS through an agent that does that.
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lthenderson
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Re: List with a realtor vs FSBO?

Post by lthenderson »

I tried FSBO once. I found many people who came to look at it didn’t understand the buying process if an owner was selling. Most thought I would loan them the money, some thought I was trying to scam them somehow even though I told them that I had deducted the 6% commission off what I could have sold it through a realtor. I found many seemed uncomfortable with the owner present during the showing. After three months, I gave up and got a realtor. I sold it within a week for 6% more money to compensate for realtor commissions.

I’ve bought both of my houses FSBO and have great experiences with both. But I suspect people like me are rare in the real estate market.
toomanysidehustles
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Re: List with a realtor vs FSBO?

Post by toomanysidehustles »

mnnice wrote: Sat Jun 03, 2023 11:08 am We are getting ready to move on and sell our house. Not sure if we should hire a realtor or try it ourselves?

I will try to share the germane information. Please ask if you have any questions?

Real Estate climate—
Seller’s market not much inventory that is existing homes. Midwest Small town (~15,000) commutable to much larger community. House down the street that would be a pretty good comp was sold as is in just a couple days.

Sellers—
Time affluent semi-retired folks. Not legal or real estate professionals but pretty knowledgeable about the market. Not averse to showing it.
Hot market and time on your side....give it a try yourself and negotiate 1.5% to an agent that brings a buyer.
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retiredjg
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Re: List with a realtor vs FSBO?

Post by retiredjg »

If you can sell it yourself, both you and the buyers get a significantly better deal. For that reason, I think FSBO is a good thing to try for a month or so (if you are willing) but I would list with an agent after that. I think agents definitely have a purpose and place, but they are not required for every situation.

Last time I sold (not a hot market), I just spread the word and someone (friend of a friend) knocked on my door. I never had to list it at all. Showed it twice (same people) and it was all over in about 6 to 8 weeks. There was plenty of information on the internet and forms already approved by my state. It was a learning curve, but not a problem at all.

The one thing I had which you might not have was that I trusted the buyer and they trusted me. There was very little chance of shenanigans going on and we both knew it. That made things easier for sure.
chassis
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Re: List with a realtor vs FSBO?

Post by chassis »

mnnice wrote: Sat Jun 03, 2023 11:08 am We are getting ready to move on and sell our house. Not sure if we should hire a realtor or try it ourselves?

I will try to share the germane information. Please ask if you have any questions?

Real Estate climate—
Seller’s market not much inventory that is existing homes. Midwest Small town (~15,000) commutable to much larger community. House down the street that would be a pretty good comp was sold as is in just a couple days. I suspect it had significant foundation issues. Most of the listings here are new construction and 45-50% more expensive.

House—
Boring little ranch. Lower end of the market here. Most of the mechanicals are newer (appliances, washer, furnace, water heater). Roof is 20 years in on a 30 year roof. AC is ancient but works fine. Well landscaped and cute brick exterior. Inside is clean with fresh paint. Some of the flooring is fine other parts need a refresh. Definitely a place you could move in with your kid and dog and not need to do anything.

Sellers—
Time affluent semi-retired folks. Not legal or real estate professionals but pretty knowledgeable about the market. Not averse to showing it.
How much time and effort do you want to put into the selling process?

FSBO units are not shown to buyers who are working with agents, so you reduce your pool of buyers by using FSBO. Agents operate in the ethical grey area in this regard. And you have the added time and effort to list and show the house, and manage documentation (seller’s disclosure, sales agreement, arranging title transfer).

Aggressive buyers who do their own searching independent of their agent (as I have done) will ask their agent to see a FSBO unit which they (they buyers) have found. Otherwise you are generally exposed to non-agent-represented buyers.

If your market is hot enough FSBO likely only means a few more days on the market and a few more showings. It sounds like your house is in a desirable/affordable (relatively speaking) segment.
Outer Marker
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Re: List with a realtor vs FSBO?

Post by Outer Marker »

I would strongly recommend against doing a FSBO. FSBO's are not respected in the marketplace and are shunned by agents. Most buyers are working with agents, so you're limiting your pool, and the few that aren't will try to help themselves to the savings you are trying to generate for yourself.

On the other hand, I would not use a full 6% commission agent. Services like Clever and Ideal Agent allow you to retain a selling agent for a 1% commission, plus the standard 3% comp to the buyer's agent - which is really the one that enables the transaction. The 1% listing fee is totally worth it in terms of handling all the basics of the listing, getting a sign and photos up, plus coordinating showings.
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daleddm
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Re: List with a realtor vs FSBO?

Post by daleddm »

Get in touch with an attorney who does residential real estate routinely and have them offer some guidance about the process and pitfalls of FSBO, as you're going to need them in the end anyway. Probably won't cost you any (or much) more than their routine closing fees as you are bringing them the business. If your property goes onto Zillow you're not really losing much in the way of marketing. As a realtor said to me not long ago - "whatever you can see on Zillow is the same as what I can see via MLS."

If I was doing it again now (have sold and bought FSBO multiple times), I'd offer an open house or two, and then ask followup folks to provide something evidencing their ability to pay, get a loan, etc.
Topic Author
mnnice
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Re: List with a realtor vs FSBO?

Post by mnnice »

daleddm wrote: Sat Jun 03, 2023 12:57 pm Get in touch with an attorney who does residential real estate routinely and have them offer some guidance about the process and pitfalls of FSBO, as you're going to need them in the end anyway. Probably won't cost you any (or much) more than their routine closing fees as you are bringing them the business. If your property goes onto Zillow you're not really losing much in the way of marketing. As a realtor said to me not long ago - "whatever you can see on Zillow is the same as what I can see via MLS."

If I was doing it again now (have sold and bought FSBO multiple times), I'd offer an open house or two, and then ask followup folks to provide something evidencing their ability to pay, get a loan, etc.
Attorneys aren’t commonly used at closings here.
Outer Marker
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Re: List with a realtor vs FSBO?

Post by Outer Marker »

You shouldn't need an attorney. The real estate forms are all simple form documents. Closing agent can handle the mechanics. That said, I wouldn't go it alone for the reasons noted above.
Normchad
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Re: List with a realtor vs FSBO?

Post by Normchad »

you can certainly do it either way.

I bought my house from a FSBO though, and oh man, those people screwed themselves big time. They really didn't understand how much their house was worth, and they cost themselves a bunch of money. And they still had to pay a commission to my real estate agent. It was awesome! I probably would have been willing to pay 50K more than I did for this house.......

In theory, an underpriced house should get more offers and drive up the price. For some reason though, in real estate, people are super eager to accept a fast offer and close fast. It cracks me up when people bragged that they got under contract in 1 day. I always think "well, you must have underpriced your house then".

For the people I bought from, their listing coincided with a major snow storm. So that reduced the amount of traffic. And around here, lots of buyers-agents avoid showing FSBOs to their clients, because they know the FSBOs just mean they are going to have to do a lot of the work.

Having said that though, I also do know several people who have sold FSBO, and have been completely happy with the results.
smooth_rough
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Re: List with a realtor vs FSBO?

Post by smooth_rough »

If you aren't transactional experienced, and don't know the purchase contract language forwards and backwards, you could get pushed around in the deal once you get into escrow. Even if you think you already have a buyer in hand that is willing to pay "top dollar" or as good you can get in current market conditions, you still need attorney to review everything to protect yourself.
bradinsky
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Re: List with a realtor vs FSBO?

Post by bradinsky »

smooth_rough wrote: Sat Jun 03, 2023 3:05 pm If you aren't transactional experienced, and don't know the purchase contract language forwards and backwards, you could get pushed around in the deal once you get into escrow. Even if you think you already have a buyer in hand that is willing to pay "top dollar" or as good you can get in current market conditions, you still need attorney to review everything to protect yourself.
Selling FSBO, always use an attorney.
Outer Marker
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Re: List with a realtor vs FSBO?

Post by Outer Marker »

bradinsky wrote: Sat Jun 03, 2023 3:12 pm
smooth_rough wrote: Sat Jun 03, 2023 3:05 pm If you aren't transactional experienced, and don't know the purchase contract language forwards and backwards, you could get pushed around in the deal once you get into escrow. Even if you think you already have a buyer in hand that is willing to pay "top dollar" or as good you can get in current market conditions, you still need attorney to review everything to protect yourself.
Selling FSBO, always use an attorney.
I'm an attorney, but I'd be hard pressed to see why a layperson couldn't use and understand the local form contracts that are used for virtually all real estate sales. Most agents aren't attorneys and they are able to use them just fine. I would not accept an offer written on anything other than the standard form contract. Selling FSBO is not a good idea for a number of reasons, but if you're determined to do it, I wouldn't spend money on a lawyer. Much better spent on a 1% agent in the first instance.
Zipster
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Re: List with a realtor vs FSBO?

Post by Zipster »

This question always elicits strong opinions. Here's mine, after buying and selling 2 FSBOs:

Where I live (and everything about real estate seems to be local), you need some sort of Realtor to get on the MLS (which also gets you listed on Zillow and Redfin). When you list on the MLS, you set what % you will give to a buyer's agent (this is not visible to anyone but Realtors). Last go-around selling, we paid a discount brokerage (basically a place set up to enable FSBOs) $500 to get on the MLS. They suggested a minimum of 2.5% to a buyers agent and we set it at 2% (interestingly, in the closing paperwork this figure initially said 3%-- we had our lawyer take care of that!). We staged our house (which basically means clean it well and put half of your stuff in storage offsite!) and took better photos than 90% of what you see in most listings, held one open house each time, and got what we wanted each time.

That brings up another point-- use a lawyer. For us, using a lawyer (again, one who specializes n FSBOs) saved us $$$ once when a buyer wanted us to fix some stuff and for whatever reason they missed some deadline to make that request. We didn't catch this, but our lawyer did. Yes, the forms are easy and standardized, but you can also use the lawyer as a sounding board who is actually working for YOU.

I don't buy "Realtors don't want to show people FSBOs". So what? If I'm a buyer in this current market I'm scanning realtor.com, Zillow, and Redfin daily, and if something pops up, I'm going to go see it! The realtor has probably locked in their buyers to make sure they're gonna get their 3% anyway-- if you're offering less than that as the seller, then that's the buyer's problem to work out with their Realtor.

All of that said, I live in a place where FSBOs have been pretty common for many years.
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Re: List with a realtor vs FSBO?

Post by Outer Marker »

Zipster wrote: Sat Jun 03, 2023 4:29 pm That brings up another point-- use a lawyer. For us, using a lawyer (again, one who specializes n FSBOs) saved us $$$ once when a buyer wanted us to fix some stuff and for whatever reason they missed some deadline to make that request. We didn't catch this, but our lawyer did. Yes, the forms are easy and standardized, but you can also use the lawyer as a sounding board who is actually working for YOU.

I don't buy "Realtors don't want to show people FSBOs". So what? If I'm a buyer in this current market I'm scanning realtor.com, Zillow, and Redfin daily, and if something pops up, I'm going to go see it! The realtor has probably locked in their buyers to make sure they're gonna get their 3% anyway-- if you're offering less than that as the seller, then that's the buyer's problem to work out with their Realtor.
So, two points - 90% of practicing law is reading comprehension and paying attention to detail. If you're the careless type and don't pay attention to detail, you shouldn't be doing a FSBO. This extends to everything from reading the contract, to decluttering the house and painting your front door. Detail counts in every aspect of doing a FSBO -- from presentation to excecution. At the end of the day, paying 1% to a selling agent is likely to net you more money than trying to do all this yourself. As I said above, FSBO's are simply not respected in the marketplace.

Second, if a Buyer's agent brings you a buyer and you want the contract, you're highly likely to wind up paying the buyer's agent. The buyer is not going to be willing to eat the cost - unless you're priced way under market. The buyer is obligated by contract to pay his agent the agreed fee (usually 3%) Skimping on the buyer's commission is a false economy and is likely to cost you money. You can, however, go cheap on the selling agent side. 3% buys you little more than a 1% agent. That's the minimum cost of admission IMHO.
spankasmurf
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Re: List with a realtor vs FSBO?

Post by spankasmurf »

Go for FSBO! Be sure to come back and let us know how it went!
Ktorrence
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Re: List with a realtor vs FSBO?

Post by Ktorrence »

There’s a false sense of confidence by sellers and buyers that real estate agents provide a better service than FSBO. It is subjective to various factors. I take issue with the National Realtor Association blocking access to the mls. They don’t think, they know that the average homeowner is more than capable of selling their own home without an agent.

I’ve said before that people buy and sell cars everyday that sometimes cost more than the average price of a home without an agent. But for some reason people have this notion in their heads that one particular object has to be handled by an agent in order to produce a proper transaction.
bsteiner
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Re: List with a realtor vs FSBO?

Post by bsteiner »

The broker's job is to find a buyer, and often to persuade a prospective buyer to buy. If you want to sell it yourself, you would have to find a buyer, and perhaps persuade a prospective buyer to buy.

The lawyer's job is to handle the legal work. Real estate procedures vary from state to state, and sometimes within a state. Lawyers are commonly used in residential real estate transactions in some places but not in other places.
stan1
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Re: List with a realtor vs FSBO?

Post by stan1 »

bsteiner wrote: Sun Jun 04, 2023 9:32 pm The broker's job is to find a buyer, and often to persuade a prospective buyer to buy. If you want to sell it yourself, you would have to find a buyer, and perhaps persuade a prospective buyer to buy.

The lawyer's job is to handle the legal work. Real estate procedures vary from state to state, and sometimes within a state. Lawyers are commonly used in residential real estate transactions in some places but not in other places.
You'd be hard pressed to find an attorney in California who knows how to handle the form filling (not really legal work). It's much easier to find an attorney who knows how to sue a realtor.
michaeljc70
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Re: List with a realtor vs FSBO?

Post by michaeljc70 »

How will you market the house if you FSBO? Not many people are buying houses off Facebook Marketplace or Zillow. I would not do a full FSBO. If you are inclined to go that way, I'd pay someone to list it in the MLS and offer an agent that brings a buyer the going rate in your area (it is 2.5% where I live). That gets it into the MLS and everything that feeds (which is all the big sites like realtor.com, Redfin, Zillow, etc.) I've done this 3 times and it worked well. If you go straight FSBO your audience is very limited and that can limit the price you get.

As to paperwork and legal work, I used the standard contract for residential real estate in my area (created by the realtors association and found online). Everyone uses an attorney to buy/sell real estate where I live. I don't understand not using an attorney for what is probably the biggest purchase/sale of your life.
Glockenspiel
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Re: List with a realtor vs FSBO?

Post by Glockenspiel »

An older couple in my neighborhood have their house listed as FSBO. It is not on the MLS. It's not listed on Zillow, Realtor, Redfin, or any of the local realty company sites. It simply has a small sign in the front yard listing it as a FSBO. I cannot find any photos of it online. I have no idea how they will get the word out that it's for sale. I'd bet good money that it will sit for awhile before selling, and they'll likely get frustrated and just hire a realtor.
michaeljc70
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Re: List with a realtor vs FSBO?

Post by michaeljc70 »

Glockenspiel wrote: Mon Jun 05, 2023 9:26 am An older couple in my neighborhood have their house listed as FSBO. It is not on the MLS. It's not listed on Zillow, Realtor, Redfin, or any of the local realty company sites. It simply has a small sign in the front yard as a FSBO. I cannot find any photos of it online. I have no idea how they will get the word out that it's for sale. I'd bet good money that it will sit for awhile before selling, and they'll likely get frustrated and just hire a realtor.
The problem with a lot of FSBO sales is they aren't serious. It is kind of "if a buyer shows up and offers me a big amount I'll move" kind of thing.

Another thing with FSBO is there is no one screening the people coming through your home. A good buyer's agent should be doing that telling their client to get pre-approved for a mortgage, etc. and to some degree making sure they aren't just window shopping.
Normchad
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Re: List with a realtor vs FSBO?

Post by Normchad »

michaeljc70 wrote: Mon Jun 05, 2023 9:30 am
Glockenspiel wrote: Mon Jun 05, 2023 9:26 am An older couple in my neighborhood have their house listed as FSBO. It is not on the MLS. It's not listed on Zillow, Realtor, Redfin, or any of the local realty company sites. It simply has a small sign in the front yard as a FSBO. I cannot find any photos of it online. I have no idea how they will get the word out that it's for sale. I'd bet good money that it will sit for awhile before selling, and they'll likely get frustrated and just hire a realtor.
The problem with a lot of FSBO sales is they aren't serious. It is kind of "if a buyer shows up and offers me a big amount I'll move" kind of thing.

Another thing with FSBO is there is no one screening the people coming through your home. A good buyer's agent should be doing that telling their client to get pre-approved for a mortgage, etc. and to some degree making sure they aren't just window shopping.
These are great points.
bberris
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Re: List with a realtor vs FSBO?

Post by bberris »

clydewolf wrote: Sat Jun 03, 2023 11:43 am There is more to selling real estate than knowing the market.
There are many legal items, and how to attract the right prospective buyers.

The real estate agent deals with these items daily. You deal with these issues maybe a few times a lifetime.
A real estate agent can't or shouldn't give legal advice. A lawyer is cheaper.

The only buyers who won't find your house for sale without an agent are those corporate relocates.
Pdxnative
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Re: List with a realtor vs FSBO?

Post by Pdxnative »

I assume you’re contemplating this because you think you’ll save money. Have you done the math? There are fixed costs you’ll pay anyway, percentage to the buyer’s agent, etc. For a lower end home in what sounds like a lcol area, what is the savings?

In my experience, a good realtor (and there are more bad than good ones out there) has the sort of familiarity with the process as well as the objectivity about your home’s value to make it worth using one. They can help iron out wrinkles in the process, including resolving potential conflicts and getting repairs done fast to facilitate closing. There’s no way of knowing for sure, but my impression from the FSBOs I’ve seen is that they are getting less than market value with extra headaches.
Nowizard
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Re: List with a realtor vs FSBO?

Post by Nowizard »

We have done both on more than one occasion. Gradually, we decided that if the house did not sell within a defined period, a relatively short one of less than four weeks, we would go with a Realtor. Time is money, and even if time is not a major issue, most of us just want to settle things quickly whenever we are trying to implement a major decision. Minor cost to list it on MLS and buy a nice sign.

Tim
Gladiators2Swansons
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Re: List with a realtor vs FSBO?

Post by Gladiators2Swansons »

We tried to FSBO by listing our home on Nextdoor, but after a few months without success ended up using a flat-fee listing agency. It was a good experience. We paid $1,000 for a listing on the MLS with many pictures, have the agency schedule showings for us, and have the agency review offers with us. It was an additional $250 to have professional photos of our house taken.

I understand the frustration with the monopoly that is MLS, but we felt that trying to ‘fight’ MLS by using FSBO was unlikely to financially hurt NAR/MLS while materially reducing the sale price of our home.

Similarly, we felt that paying a commission to a buyer’s agent was a cost of doing business. In our area, serious buyers were using agents.

We paid the buyer’s agent a 2.4% commission, saving us the 3.6% (less $1,250) that would normally have gone to a seller’s agent.

If inventory is low, I suggest being strategic about when your listing goes live. Evidently listing on a Thursday is ideal. Buyers can tour over the weekend when they aren’t working. If you end up with multiple offers, you can request to receive offers by Sunday evening.
michaeljc70
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Re: List with a realtor vs FSBO?

Post by michaeljc70 »

Gladiators2Swansons wrote: Mon Jun 05, 2023 11:54 am We tried to FSBO by listing our home on Nextdoor, but after a few months without success ended up using a flat-fee listing agency. It was a good experience. We paid $1,000 for a listing on the MLS with many pictures, have the agency schedule showings for us, and have the agency review offers with us. It was an additional $250 to have professional photos of our house taken.

I understand the frustration with the monopoly that is MLS, but we felt that trying to ‘fight’ MLS by using FSBO was unlikely to financially hurt NAR/MLS while materially reducing the sale price of our home.

Similarly, we felt that paying a commission to a buyer’s agent was a cost of doing business. In our area, serious buyers were using agents.

We paid the buyer’s agent a 2.4% commission, saving us the 3.6% (less $1,250) that would normally have gone to a seller’s agent.

If inventory is low, I suggest being strategic about when your listing goes live. Evidently listing on a Thursday is ideal. Buyers can tour over the weekend when they aren’t working. If you end up with multiple offers, you can request to receive offers by Sunday evening.
+1
invest4
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Re: List with a realtor vs FSBO?

Post by invest4 »

A few comments:

* FSBO may be a confusing term. Historically, FSBO was done a certain way and developed a poor perception for some people. The flat fee MLS companies out there include those who will let you use their signage (a significant plus which already gives your home sale "street cred") as well as appointment app, etc. Today's selling does not need to be like your parents FSBO

* You can absolutely do this yourself.
- The flat fee MLS agency will help you with questions.
- Save all of the selling agent commission
- Set your own buyer's agent commission
- Negotiate for yourself (hoping you are not that person who is their worst enemy in negotiations).
- May receive signage and app from the flat fee MLS agency
- All of the items like pictures and description if the house, etc. you can see examples from other listings and copy / adjust them to fit your house.
- Appointments are the biggest thing that may trip people up if they can't easily do themselves. They will either have to find someone or allow the buyer's agent to go through.

* Real-estate lawyers are typically reasonably priced and you would do well to spend the money to have one. You don't know what you don't know. They are experienced and will also help you with questions and manage relevant issues should they arise. An absolute must have in my view.

* Many people are uncomfortable and prefer an agent. This is not surprising as many people are wary of new ways of doing things. That is not to say that some of their potential concerns do not exist (you may indeed be a terrible client for yourself)...but I think between the MLS agency and your real-estate lawyer also supporting you, you will be just fine.


We sold our last house via flat fee MLS and it was fantastic for us. We saved a pile of money and also had some fun doing it. Most of the time, all involved in the process were unaware that we were listing it ourselves, including the buyers agents until it dawned on some of them...usually during negotiations (no need to get back to the buyer's agent after we "talk to the seller" eh?).

Best wishes.
michaeljc70
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Re: List with a realtor vs FSBO?

Post by michaeljc70 »

invest4 wrote: Mon Jun 05, 2023 12:04 pm A few comments:

* FSBO may be a confusing term. Historically, FSBO was done a certain way and developed a poor perception for some people. The flat fee MLS companies out there include those who will let you use their signage (a significant plus which already gives your home sale "street cred") as well as appointment app, etc. Today's selling does not need to be like your parents FSBO

* You can absolutely do this yourself.
- The flat fee MLS agency will help you with questions.
- Save all of the selling agent commission
- Set your own buyer's agent commission
- Negotiate for yourself (hoping you are not that person who is their worst enemy in negotiations).
- May receive signage and app from the flat fee MLS agency
- All of the items like pictures and description if the house, etc. you can see examples from other listings and copy / adjust them to fit your house.
- Appointments are the biggest thing that may trip people up if they can't easily do themselves. They will either have to find someone or allow the buyer's agent to go through.

* Real-estate lawyers are typically reasonably priced and you would do well to spend the money to have one. You don't know what you don't know. They are experienced and will also help you with questions and manage relevant issues should they arise. An absolute must have in my view.

* Many people are uncomfortable and prefer an agent. This is not surprising as many people are wary of new ways of doing things. That is not to say that some of their potential concerns do not exist (you may indeed be a terrible client for yourself)...but I think between the MLS agency and your real-estate lawyer also supporting you, you will be just fine.


We sold our last house via flat fee MLS and it was fantastic for us. We saved a pile of money and also had some fun doing it. Most of the time, all involved in the process were unaware that we were listing it ourselves, including the buyers agents until it dawned on some of them...usually during negotiations (no need to get back to the selling agent after we "talk to the seller" eh?).

Best wishes.
Pretty much my experience the 3 times I did it. It is also nice to be able to answer buyer's questions and them not get a "I'll ask the owner and get back to you" on things like how old is the roof, how old is the furnace, how are the neighbors, etc. When using an agent it was like a game of telephone- the potential buyer asks their agent, they ask the selling agent and then the selling agent asks the owner. Then the reverse with the answer.
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mnnice
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Re: List with a realtor vs FSBO?

Post by mnnice »

Pdxnative wrote: Mon Jun 05, 2023 11:03 am I assume you’re contemplating this because you think you’ll save money. Have you done the math? There are fixed costs you’ll pay anyway, percentage to the buyer’s agent, etc. For a lower end home in what sounds like a lcol area, what is the savings?
I would guess $13k. Definitely not chump change.

We sold two houses previously and used a realtor both times. The first sold so quickly I was left wondering what the realtor did other than let the others in her office know it was for sale. I did worry about it too much as we got that money back as part of a corporate relocation package. The second was during the Great Recession. We tried BSBO when prices were falling and the market was near comatose. Listing with a realtor eventually worked but only when the market started to reawaken a bit.

I guess my rationale was that we are DIY people that clean our own house, manage our own investments, change our own oil on vehicles. Why not this too.
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Re: List with a realtor vs FSBO?

Post by ScubaHogg »

You can decide if you want to pay tens of thousands of dollars to have someone whose incentives are very different from yours slap your house on a website

A real estate attorney will likely fill out any legal paperwork much more competently for a fraction of the price

The former poster Willthrill81 posted his fsbo experience on his blog if it interests you

https://www.thesensiblesteward.com/post ... e-by-owner
“Conventional Treasury rates are risk free only in the sense that they guarantee nominal principal. But their real rate of return is uncertain until after the fact.” -Risk Less and Prosper
Pdxnative
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Re: List with a realtor vs FSBO?

Post by Pdxnative »

ScubaHogg wrote: Mon Jun 05, 2023 4:30 pm

The former poster Willthrill81 posted his fsbo experience on his blog if it interests you

https://www.thesensiblesteward.com/post ... e-by-owner
This was an interesting read, thanks for the link.

My takeaway was that they thought it was worth 460k+ but offered to sell it for 450k after a few days, and would have done so if the buyer had accepted their counter. Ultimately the market price was 480k minus the 2k gutter cost. So sure, they saved 12k but would have cost themselves 28k had their counter been accepted.

Hard to know if a good realtor would have prevented that error. Most of the sales I saw happening during that time in hot markets had a showing period with a firm offer date. I suspect a realtor would have had a better sense of what was happening in the market and how to set up the bidding to maximize price.
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Re: List with a realtor vs FSBO?

Post by stan1 »

invest4 wrote: Mon Jun 05, 2023 12:04 pm and also had some fun doing it.
mnnice wrote: Mon Jun 05, 2023 12:49 pm I guess my rationale was that we are DIY people that clean our own house, manage our own investments, change our own oil on vehicles. Why not this too.
This may be the differentiator, the group of people who would consider it fun to sell their own house and change their own oil might be pretty small but is probably over-represented on this forum compared to the general population.
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Re: List with a realtor vs FSBO?

Post by michaeljc70 »

Pdxnative wrote: Mon Jun 05, 2023 6:58 pm
ScubaHogg wrote: Mon Jun 05, 2023 4:30 pm

The former poster Willthrill81 posted his fsbo experience on his blog if it interests you

https://www.thesensiblesteward.com/post ... e-by-owner
This was an interesting read, thanks for the link.

My takeaway was that they thought it was worth 460k+ but offered to sell it for 450k after a few days, and would have done so if the buyer had accepted their counter. Ultimately the market price was 480k minus the 2k gutter cost. So sure, they saved 12k but would have cost themselves 28k had their counter been accepted.

Hard to know if a good realtor would have prevented that error. Most of the sales I saw happening during that time in hot markets had a showing period with a firm offer date. I suspect a realtor would have had a better sense of what was happening in the market and how to set up the bidding to maximize price.
There is one thing that has been discussed in many threads, but maybe needs to be repeated. A realtor making 2.5% has almost no incentive to get top dollar. Example: House listed for $400k. If they get 2.5% the sellers commission at $400k is $10,000. If the place sells for $370k the commission is $9250. A difference of $750 in commission, and $30k to the owner. Further, agents have split with their brokerage. They are not getting the 2.5%. They are getting a fraction of that. My point is, the bottom line for the selling agent is a few hundred bucks and thousands or tens of thousands to you.

All my comments are based on my own experiences and having been close to people that are realtors. I am not and have never been a realtor.
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Re: List with a realtor vs FSBO?

Post by Pdxnative »

michaeljc70 wrote: Mon Jun 05, 2023 9:22 pm
Pdxnative wrote: Mon Jun 05, 2023 6:58 pm
ScubaHogg wrote: Mon Jun 05, 2023 4:30 pm

The former poster Willthrill81 posted his fsbo experience on his blog if it interests you

https://www.thesensiblesteward.com/post ... e-by-owner
This was an interesting read, thanks for the link.

My takeaway was that they thought it was worth 460k+ but offered to sell it for 450k after a few days, and would have done so if the buyer had accepted their counter. Ultimately the market price was 480k minus the 2k gutter cost. So sure, they saved 12k but would have cost themselves 28k had their counter been accepted.

Hard to know if a good realtor would have prevented that error. Most of the sales I saw happening during that time in hot markets had a showing period with a firm offer date. I suspect a realtor would have had a better sense of what was happening in the market and how to set up the bidding to maximize price.
There is one thing that has been discussed in many threads, but maybe needs to be repeated. A realtor making 2.5% has almost no incentive to get top dollar. Example: House listed for $400k. If they get 2.5% the sellers commission at $400k is $10,000. If the place sells for $370k the commission is $9250. A difference of $750 in commission, and $30k to the owner. Further, agents have split with their brokerage. They are not getting the 2.5%. They are getting a fraction of that. My point is, the bottom line for the selling agent is a few hundred bucks and thousands or tens of thousands to you.

All my comments are based on my own experiences and having been close to people that are realtors. I am not and have never been a realtor.
Sure. I’m not suggesting the incentive structure brings a better price. Not at all. The market does that. The only place a realtor’s incentive is aligned with a client is getting the sale done once an offer has been accepted.

In the linked example, I think a competent realtor would have structured the listing in a way that forced those offers to come all at once rather than in a trickle (at least that’s what I understand from talking to friends who sold during that period in seller’s markets). And if lowball offers came in, I don’t think an experienced realtor would bite. That’s been our experience at least.

I’m not a realtor and no fan of the way the system is structured but I do think sometimes DIYers underestimate the value an experienced professional can provide, and overestimate the potential savings. Not in every case, obviously.
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Re: List with a realtor vs FSBO?

Post by ScubaHogg »

Pdxnative wrote: Mon Jun 05, 2023 6:58 pm Hard to know if a good realtor would have prevented that error. Most of the sales I saw happening during that time in hot markets had a showing period with a firm offer date. I suspect a realtor would have had a better sense of what was happening in the market and how to set up the bidding to maximize price.
A realtor makes almost no more money if you sell your house for an extra 30k. Their incentive is to sell homes quickly, not maximize the sell price.
“Conventional Treasury rates are risk free only in the sense that they guarantee nominal principal. But their real rate of return is uncertain until after the fact.” -Risk Less and Prosper
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Re: List with a realtor vs FSBO?

Post by ScubaHogg »

Pdxnative wrote: Mon Jun 05, 2023 10:05 pm I’m not a realtor and no fan of the way the system is structured but I do think sometimes DIYers underestimate the value an experienced professional can provide, and overestimate the potential savings. Not in every case, obviously.
An experienced sales-person

No one ever thinks the car salesman is on your side or is interested in getting you the best deal…
“Conventional Treasury rates are risk free only in the sense that they guarantee nominal principal. But their real rate of return is uncertain until after the fact.” -Risk Less and Prosper
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Re: List with a realtor vs FSBO?

Post by andypanda »

My car salesperson didn't even know that all of the added tacked on junk items on the 4Runner I just ordered from their allotment that were listed as PIO were Port Installed Options. She kept saying the factory put them on and you had to take them. I corrected her once, and moved on. The dealer has a take it or leave it attitude. I can leave it when it arrives and get my deposit back. We will see. My stepson wants my '16 4Runner Trail Premium with KDSS because his '15 has 150,000 on it. Mine is 62k. I'm 72 and decided to buy a new truck. My wife swears she is going to keep her '16 Avalon until our two grandsons - 4 & 7 - learn how to eat food in the backseat without making a mess.

I sold my house in 2020 as the plague ramped up. :) I found a buyer and negotiated a price. I knew a lawyer who charged me $300 for advice. When we needed a Virginia purchase agreement he emailed me one. He told me what forms to print and give to the buyer - you may have lead paint, you may have asbestos, etc., and the Virginia disclosure that Virginia is a buyer beware state and the seller is obligated to answer questions honestly if you ask them. When everything was in place he printed out a few more forms and had me sign them on the hood of my truck in front of his office. He took a voided blank check from me and delivered the package to the closing company. I split the closing company's $550 fee with the buyer and the money appeared in my checking account the day after closing. Sellers don't attend closings here.

Could I have found a purchase agreement and all the other forms using google? Sure. The lawyer had current copies on his computer and I never had to wonder if I'd screwed up somewhere.
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Re: List with a realtor vs FSBO?

Post by William Million »

Others have mentioned, but:

- If you sell yourself, you have to get on MLS and probably have to add a commission for a buyer's agent. Most serious buyers use an agent and you don't want to exclude them.

- On staging, a good selling agent will be tactfully blunt with you about the furniture in the house. You might not realize how others view your sofa or kitchen table. Of course, the higher value the house, the more staging will pay off.

- I would not underestimate the importancee of deciding on an iniital listing price. A good sellers agent will know what price to list at in order to elicit the most showings and whether you could create a bidding war. A house in our neighborhood recently sold within 24 hours - with backup offers. The sellers of another same-size house in the same neighborhood listed a month later for same price. Still no offers after months on the market. Sellers of the 2nd house are not able to objectively understand that their house, while same-size and same location, is worth 20% less. A seller's agent adds that dose of objectivity.
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Re: List with a realtor vs FSBO?

Post by mnnice »

We had a meeting with a realtor and she sent us a document with expenses and proceeds estimates. It had a 7% commission and $1300 in fees that seemed very junky plus $575 for a home warranty that is another profit center for them.

Leaning harder at FSBO. Still working on decluttering and repainting the basement.
Last edited by mnnice on Thu Jun 22, 2023 9:38 am, edited 1 time in total.
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Re: List with a realtor vs FSBO?

Post by ScubaHogg »

mnnice wrote: Thu Jun 22, 2023 9:30 am We had a meeting with a realtor and she sent us a document with expenses and proceeds estimates. It had a 7% commission and $1300 in fees that seemed very junky plus $575 for a home warranty that is another profit center for them.
:oops:

Good lord
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Re: List with a realtor vs FSBO?

Post by ClevrChico »

Unless I knew someone that had already expressed interest in buying, I would shop around for an agent with a fair commission. A good salesperson is worth every penny in their commission. And, having sold a car private party, that was enough of a nightmare.
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Re: List with a realtor vs FSBO?

Post by mnnice »

We listed as a FSBO in early July. Had an accepted offer 5-6 weeks later and closed in late September.

We paid the buyer agent 3%. Comparing the settlement paper from when we were buyer we paid less in closing costs than they did with 100k less in sale price.

Would do again.
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hand
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Re: List with a realtor vs FSBO?

Post by hand »

FSBO or realtor isn't binary decision between now and when you sell- assuming you have an idea of the value of your house, "list" on Zillow / other platforms with a "make me move" value today and see if you get any interest. You'll have realtors tripping over themselves to list your property

Notes:
1) One of the common realtor scams is to contact FSBOs pretending they have a buyer and asking you to sign listing paperwork to put you in touch. Don't.
2) I'm very pro- FSBO, but to do well it requires a decent level of financial, interpersonal, legal, marketing and negotiation acumen as well as common sense and time to devote to the process - be sure to do an honest assessment of your skills before you list.
3) Make sure you invest in good photos for your online listing
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Re: List with a realtor vs FSBO?

Post by KneeReplacementTutor »

We sold our last two homes ourselves. One in a matter of days. The other in a matter of months. The process was straightforward. It started by picking up an FSBO document packet from a local title insurance company. As others mentioned high quality photos, and signage are helpful.
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Re: List with a realtor vs FSBO?

Post by Sandtrap »

mnnice wrote: Sat Jun 03, 2023 11:08 am We are getting ready to move on and sell our house. Not sure if we should hire a realtor or try it ourselves?

I will try to share the germane information. Please ask if you have any questions?

Real Estate climate—
Seller’s market not much inventory that is existing homes. Midwest Small town (~15,000) commutable to much larger community. House down the street that would be a pretty good comp was sold as is in just a couple days. I suspect it had significant foundation issues. Most of the listings here are new construction and 45-50% more expensive.

House—
Boring little ranch. Lower end of the market here. Most of the mechanicals are newer (appliances, washer, furnace, water heater). Roof is 20 years in on a 30 year roof. AC is ancient but works fine. Well landscaped and cute brick exterior. Inside is clean with fresh paint. Some of the flooring is fine other parts need a refresh. Definitely a place you could move in with your kid and dog and not need to do anything.

Sellers—
Time affluent semi-retired folks. Not legal or real estate professionals but pretty knowledgeable about the market. Not averse to showing it.
to op:
option
Look up various "flat fee" R/E brokers in your area that will "list" (put it on the MLS R/E Listing Service) for a flat fee.
Be helpful and provide property information and nice pictures, much like you see on many listings on Zillow, etc.
Once "listed", the property will be able to be sold by any R/E brokerage or R/E salesperson.
option
FSBO (for sale by owner)
Often, very often, there's an immediate stigma that's attached to FSBO listings. IE: must be something wrong with it, maybe I can get the owner to "owner finance" the property since I'm broke and have no job, etc.
A lot depends on the particular property and area. If there are FSBO's in your area as well. Look at past FSBO listings in your area and get an idea of the type of property, why it was sold as a FSBO, how long on market, if it was owner finance, etc.
You can do well on a FSBO, or it can turn into a hassle. The local closing/escrow company can handle all of your paperwork from start to finish.

question to OP:
What do you hope to gain by sellng your home via a FSBO vs a regular R/E pathway???

j :D
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