They ought to give this game a name.
If you're an agent, you know. The game you play when you meet the guy who's selling FSBO. Maybe he calls you, maybe you jot down his number as you drive by one day.
Maybe you even get a chance to walk through his house. You're doing a mental inventory the whole way, thinking about the marketability of various features, staging and even how to compose your glamour photos of the home. The whole time, the seller is watching you thinking about one thing:
Commission, commission, commission, commission.
So then you get the prepare something more formal to present to the FSBO seller. You know, you're got your program and pricing nailed down and have many productive tips and ideas to get the house sold. However, the seller persistently derails you with discussion about commission. "Will you do it for 2%? I have a "high end" agent who will do it for 2%" Um Hmmm. You try to go over the differences between agents again, and highlight your skills which make you desirable irregardless of commission. You do try.
But it's not getting through.
Then, you follow up and get no response. You're not 100% upset about that, but the professional and competitor in you makes you try again. No luck. The next morning, the house is listed by that "high end" realtor. 4 photos taken by a polaroid, stripped down bare listing, overpriced by $20,000.
The game may be over for you, but the other agent's game with the seller is just getting warmed up! Now they'll have to negotiate the price down to your suggested price (as they figured from the beginning)and try to keep their sign in the guy's front yard for the rest of the season - free advertising, you know.
It's a game, but it's not a game. This is dealing with a mult-hundred thousand dollar asset, for goodness sake! It's beyond me, sometimes, what sellers are thinking. Folks, there is a difference between agents and sometimes the commission is worth every penny! I would absolutely love to explain the difference to you in person if you're reading this and contemplating selling FSBO (or going with that 2% agent).
You may be thinking "what's got into Jeff this morning?". If you guessed that I've been wrapped up in FSBOland, you'd be right. Why do I do this to myself? Oh, there's another one. Maybe he'll listen to reason...
Jeff - Service isn't cheap and it typially costs much more to do things without the assistance of a Professional. Get the word out there amigo! I wish I could find it but I read somewhere that a very high % (something like 90% of FSBO's) would not sell their house themselves ever again.
That would be a good stat to get, Jason! Let us know if you find it again.
Thanks for the comment!
I would say, look don't try and save money in commission, that is what you have done so far and it is not working. Don't make the mistake many FSBO's make and go from one bad strategy to another which is list with a low service, low price, and low marketing agent. They don't sell homes well in this competitive market.
Finally I would say, look a great agent with great marketing can not only sell your home for fair makret value but can get you extra many times which helps reduce the commision you are paying. Remind them it's all about net numbers and their strategy of buying the cheapest realtor will not get them more, it will cost them thousands more in price reductions and time on market.
Spokane Real Estate - Ross Quintana (Team Quintana Real Estate - MJ McAdams Realty Lic#3015)
Great comment Ross! Sounds like you have a plan to address some common misconceptions and challenges. Can you tell us the source of the NAR number?
Just Google NAR stats and you can find all the information you need. Of course, stats are only as good as how they are obtained. FSBO stats are hard to come by on a national basis as there is no one mechanism to track them. When you track sales only using a portion of the data, you are bound to get conflicting results. For example, lets say a FSBO uses our for sale by owner service and also elects to purchase a flat fee listing on the MLS. The buyer is found through us, but the seller must report that to the MLS - voila, the MLS just got credit for the sale. Most agree that the actual stats for FSBO sales is somewhere between 20-33%, depending on the area of the country where there are regional services that keep track of data. National websites do not track sales, only giving information to media on how many people are "advertising" by owner. There's a big difference between posting an ad on a website and actually selling using the same service.
With the scenario you are posting about, you can always wait and prospect the expired listing from your fellow agent assuming those Polaroids don't do much for the curb appeal. Or, if you have a buyer who is interested, work as a buyer's agent. Many private home sellers are open to working with you under those terms - at least they are in our area, especially when we educate both sellers and buyers how the commission can be worked to the satisfaction of both parties.
I can guarantee that there's no way that 20-30% of home sales are FSBO in our part of PA. Perhaps that's a market difference. And, I wouldn't count all the inter-family transfers as FSBOs - they'd have to actually market the house to the public to count. I'm certainly not against FSBO networks, I'm a DIY'er myself. In a buyers market, though, stripped-down programs are going to be at a disadvantage when homes are actually competing against each other for the buyer's money. Aggressive online promotion and superlative photography are musts these days for a top-dollar, timely sale to happen.
FSBO sellers generally fall into 2 categories - the ones that are open to possibilities with a realtor and the ones that are not. In our area it's probably about 50/50. I often work as a buyer's agent with FSBOs - and if they're reasonable they see how nice it is to have a professional who effectively acts for both sides for 1/2 price!
Hi Jeff, Here in California, Most brokerages are very clear in defining Agency and who is working for whom. After that a letter will advise that the Seller is on their own and can suffer great liability if they fail to do certain things and that is usually followed with advising them so to legal advise on how to proceed.
FSBO's don't do all that well here. Their transactions may times end up in court after the fact. Either civil or Small Claims.
You might check out your statistics on that and see what kind of cases are available at your courts. Back east they are hopefully not as a litigious as here, otherwise there would be no hope left for a more sane life.:-)
San Diego Real Estate Voice authored by William Johnson GRI CRS e-PRO (RE/MAX Associates)
William, I like the approach of sending a letter to define the relationship. I'm not sure how we could search the court records for dispute cases, but our records are online and easily accessible (you have to love technology).