Some people thought I had lost my mind for publishing yesterday’s post, "Confessions of a FSBO, Part 1". It is no secret that people can sell their own home without being represented by a Realtor®, so I thought the article was a good one because it explores an alternative ways of selling a home. A home is often a person’s most expensive and valuable asset, as such buying or selling a home is a huge and important step. Sellers should have options and they do.
The home owner in yesterdays post is not a FSBO, if FSBO means for sale by owner with out representation by a Realtor®. The home is listed with a Realtor® who charges a flat fee. Only persons with real estate licenses who belong to the MLS, can list homes on the MLS. Being a member means that the individual must also be a Realtor®. They are simply giving the consumer the alternative of paying a small fee for a sign and to have their property listed on the MLS.
The seller is also agreeing to pay a commission to any Realtor® who brings in a buyer. When a home is listed by a full service agent it works the same way, we split our commissions with the buyer’s agent. In this case the sellers are paying 2.5%. When I list a home I am required to set it up so the buyer’s agent gets paid 2.7%. If the sellers find their own buyer they will not have to pay the buyers agent. They are actually competing with at least 10,000 local agents, who have buyers. It is likely that they will have to pay one of these agents.
Sometimes these discount and flat fee companies mislead buyers and sellers into thinking that the property is being sold by the owner with out a Realtor®. There is one local company that has some particularly nasty anti- Realtor® propaganda which misleads consumers because they are Realtors®, and belong to the same local board of Realtors® as I do. Since the information is not exactly false, but not really true either, but considered advertising it is allowed.
The seller will incur the regular closing costs when the home sells. Some of the flat fee and discount service providers help with the contract once the purchase agreement is received. If a buyer’s agent writes and offer he or she will be doing the bulk of the paper work involved in the transaction.
Full service Realtors®, like me, do not charge any kind of fee, instead we charge a percentage of the homes sale price and are paid when and if the property sells and only if it closes. We also give the buyers agent at least 2.7% of the purchase price. We provide services, including putting the listing on the MLS and on Craig’s list, and providing a for sale sign as parts of an overall marketing strategy. Actually for me selling homes is hard work. A a full time job which keeps me very busy and can even be stressful.
In addition to services, I provide expertise and experience gained from selling more homes each month than many of my clients have sold or will sell in their lifetime. The first time I sold a house, for a client I did not find it so easy and believe I would not have been able to do a good job without the help and support of my broker who had been in the business for almost 30 years.
Christy is not a true FSBO she is simply using a service that allows her to pay less of a commission by doing some of the work herself. In some cases this strategy saves money and in other cases it does not. To sellers who do not have a lot of equity and have the time to do the work the flat fee or discount model may be viable option.
