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Getting back to the OP, I'd like to offer two suggestions for selling FSBO. Well, three.
1. Get an online floorplan drawn up. They only cost about $30 but they make your listing look so professional.
2. PHOTOS. Most shoppers do their initial search based on photos. If you have a good camera with an external flash (not an iPhone), take good photos. Otherwise, spend a couple hundred bucks on a photographer. The equipment is more important than the user as it's not hard to take good photos of a house and its interior, so look for a college student or something on craigslist; no need to use a professional home photographer.
3. Make sure to offer a reasonable commission for buyers' agents. I offered 2.0% and almost every single realtor was fine with that amount. Only one told me that she wouldn't show the house for less than 2.5% and I politely declined- I told her "as this is new to market I'm not ready to go up to 2.5%, but if it's still available in a couple of weeks I'll give you a call". I ended up receiving offers from both unrepresented as well as represented individuals. I ultimately went with an unrepresented buyer but the bidding war was helpful in getting the price up. I almost went with the represented couple but their offer put $3k less in my pocket after all was said and done, so I went with the lower unrepresented offer.
I'm not a realtor but if you aren't smart enough to look down the pipeline and see that the industry is going to bypass you then that's on you. I've given the stockbroker/travel agent analogy and those industries got wiped out with a click of a mouse. A realtor's transaction costs are too high for what they do! The whole transaction is focused on price from the selling price to the mortgage rate so at some point someone will see that line item commission as ridiculous and come up with a better model.
I'll give you a 2019 example: My sister just moved to a new area, she had previously lived within 40 miles of this place but it was over a state line. She was shopping from 1000 miles away in a fairly hot market and knew the school district/area she wanted to live in.
She narrowed her search to about 10 houses. Clicked a Redfin agent and forwarded a list of the 10. Agent set up the showings, my sister flew in Friday night, saw the 10 on Saturday, signed a contract Sunday and flew home. Closed within 45 days. That whole transaction started with the internet, the realtor was essentially a chaperone. One of the houses was only accessible by cutting through a rough area, the agent did point that out before the showing but my sister said it was very noticeable on the ride over. The agent offered very little input outside of that.
My sister and her husband were qualified buyers, 25% down, pre-approved mortgage, perfect credit so the realtor didn't need to hand hold them, help them with anything. They sold their former house (it had been rented for 10+ years) with the "local neighborhood specialist" and it was a disaster. That agent was hoping to handle the buy side of the new house (40 miles away, she was licensed in that state also) but my sister said the redfin plan worked out perfect and she was interested in fast/no hassle.
Total value of the real estate involved was 678K.......so not NYC prices but the concept works on all levels.
Using the "neighborhood favorite realtor" wasn't beneficial. In my own neighborhood the "local favorite" loves to quote fast sales (under contract in 12 days type thing) but her price per square foot is the lowest also. I bet you could get a same day contract every time if you give the property away........
I personally know 6-7 realtors, like their contacts are in my phone and I call/text them about stuff outside of real estate. I would not hire 5 of them for my personal home. One girl is a straight up hustler (she also is the broker/owns the office) and the other has been selling good for 2-3 years. The other area agent is a superstar but I don't know her. She has sold stuff on my street and thinks way way outside the box. If I was listing today, I'd call the 2 I know and the 3rd agent and tell all 3 who they are up against and get them to pitch me their ideas for selling the property. The listing agent will be the one with the best strategy. All 3 coincidentally had set records for high sales in my neighborhood, only to get bested by the other 2.
If I was buying, I'd be searching realtor.com and other sites for houses I like/areas under consideration.
The technology is improving, the price per square foot numbers are easily accessible to anyone so the "lock on the market once held by the MLS/realtors" is losing ground fast. You would be blind not to see that big changes are coming down the line. Covid might have sped up the "virtual tour" concept so it is more acceptable to more buyers, further decreasing the need for the chaperone realtor to unlock the front door.
Hardly anyone is going to write an offer for a house they haven't laid their own eyes, and ears, and nose on, anymore than they'd buy a used car without a test drive.
Redfin is a flat fee brokerage with a really excellent website, but at its core is little different than any of the other brokerages.
Realtor.com is licensed by the National Association of Realtors, and therefore is tapped in to the various MLS's.
Neither of them are new, and the internet has changed the RE business as surely as it has anything else. But just as being able to go online and buy Geico insurance hasn't wiped out Insurance Agencies, neither will the internet wipe out REA's.
Zillow and Redfin are cash crematoriums. With no clear road to reliable profitability.
Z, in particular, exists mainly as a vehicle for the founders and officers to cash in on other peoples' money, selling stock as they burn OPM cash.
My overhead is less than either Z or R, and my margins are better. Why would I sweat them?
Then we have Opendoor, Offerpad, and other flippers. Burning cash so bad, they had to stop buying during COVID.
Revolutionaries come, and they go. Without profits, they are likely to do the latter without ever dominating anything.
I'm not a realtor but if you aren't smart enough to look down the pipeline and see that the industry is going to bypass you then that's on you. I've given the stockbroker/travel agent analogy and those industries got wiped out with a click of a mouse. A realtor's transaction costs are too high for what they do! The whole transaction is focused on price from the selling price to the mortgage rate so at some point someone will see that line item commission as ridiculous and come up with a better model....
If I was buying, I'd be searching realtor.com and other sites for houses I like/areas under consideration....
The technology is improving, the price per square foot numbers are easily accessible to anyone so the "lock on the market once held by the MLS/realtors" is losing ground fast. You would be blind not to see that big changes are coming down the line. Covid might have sped up the "virtual tour" concept so it is more acceptable to more buyers, further decreasing the need for the chaperone realtor to unlock the front door.
A few qeustions:
1-What is a fair amount for a fee or commission for agents?
2-Is buying a house really comparable to planning a vacation?
3-Who do you think paid for that technology you're using?
4-There is a lot more to pricing a home than just the price/sf.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
34,705 posts, read 58,042,598 times
Reputation: 46172
Word of mouth,
Referrals
Investors
Great signs (easy to read at 60 mph)
Lots of pics on website and /or Zillow
Brochures with all the facts and mortgage options
Cash flows if income capable.
Improvements (list and price). Clients like to know you have spent time and dollars on their future home.
Very expressive write-up
Compensation to agent for quickly closed sale (I prefer 10 day max closing, I like cash deals)
Plenty of facts
Listen carefully to your buyers (don't over-sell)
Be very prompt I. Follow up
Be accessible and articulate
Know a financing options
Have a professional appraisal available.
Completely document the benefits of the property.
Don't waste a minute on tire kickers. (Real buyers will beat your door down if you are priced correctly.)
Just sold property #39 FSBO.
Have used a realtor 2x, due to other party needed Hand holding. Hopefully... Never again.
RE is dirt simple, especially residential props. Commercial can eat your lunch if you mess up.
Never allow HUD or SBA, FHA or VA loan delays. (I will not write a contract if I get locked into buyer's loan drama.
I applaud that you will take your clients to FSBO. Around me they won’t.
They always have, if the owner will agree to a single party listing and will pay them their commission. I was an investment real estate broker from 1971 until I finally retired so know what I am talking about.
I have been involved with numerous properties of all types that were FSBO, known in the trade as Fisbos. Some were as simple as a small building lot, to large irrigated farms and commercial. Some of the properties we handled were in other states, and a couple were in South American Countries. Clients were local prominent men, and as far away as North Africa and Malaysia.
I did not sell homes as personal residences as I did not want to wast time showing home after home. But on the other hand, I sold as many as 14 homes in one day to investors. A long time broker and his partner a builder came to me with a 13 unit to be build subdivision, but they needed half pre-sold or they could not get construction money. Gave me a price that investors would accept, and I sold all 13 with buyers taking 2 to 5 homes plus a seller came to me with an beautifully maintained home that morning to be repoed by the bank on Monday (next work day) which I made a deal to buy and called VA for final figures and had them send me the assumption papers to close on Monday. They knew me, and sent them to me, even if I had not made a sale yet. They knew I would personally buy it if not sold by Monday. That was 14 homes sold on the phone with every call a sale, in 2.5 hours. All were under firm contract by evening signed by both sides.
Side Note. Fourteen homes is the sales level for better agents in one year according to NAR. In other words I did a years business for a good agent in one afternoon.
I turned the papers over to my business partner (my wife), and she took it from there. Most people do not realize that there are hours of time usually handled by the agent, on every sale. I handled the actual listings and sales, my wife did the rest right up to handling the closings. We did a lot more business this way, than would otherwise be possible. She was a licensed Broker, a university trained paralegal specializing in real estate, a GRI, and knew the business inside and out. She was one of the founding members of the county wide Real Estate Clossers association and was their trainer on doing real estate closings.
Once I had turned the papers over to her, I did not have to waste my time doing things the agent/broker normally handles, but could work on the next listing and sale.
Hardly anyone is going to write an offer for a house they haven't laid their own eyes, and ears, and nose on, anymore than they'd buy a used car without a test drive.
Really? How many homes closed in the last 60-90 days without seeing it in person due to Corona?
Ever seen the carvana ads? They deliver it to your house, no dealer visit/no test drive.
A few qeustions:
1-What is a fair amount for a fee or commission for agents?
2-Is buying a house really comparable to planning a vacation?
3-Who do you think paid for that technology you're using?
4-There is a lot more to pricing a home than just the price/sf.
1. 1-2% of the gross is all the money
2. Depends on your vacation? I have friends that spend more annually on travel than I did on my first house!
3. Do you really believe realtors funded sites like zillow? Zillow farms public data bases (even has a link to their data sources in the property description!).
4. Do you realize that you made no sense? Price is always based on sq ft! I've never seen a realtor that doesn't start with neighborhood comps, followed by price per sq ft then multiplying that by your actual sq footage. None of this BTW is any trade secret, so again what are they bringing to the table?
Hey if you are a current realtor crushing it, fine.....ride the wave of success but the business is a broken model. Just like buying a car doesn't need a local salesman (email, negotiate, go in and sign the paperwork, drive away or even let them deliver it).
Fact is there are too many waiter/bartender/soccer mom/part time realtors that are making no money and hoping to be a "millionaire producer" like on TV. The market will surely change and thin those types out. It is a mediocre living for 85% of the realtors out there, the other 15% are killing it. https://www.homelight.com/blog/how-m...ors-in-the-us/
2mm realtors in the US, 1.4mm joined the MLS..............yet there were only 5.5mm transactions in 2017. Bascially one realtor for every 2.75 sales for every realtor in the US. Now clearly nobody is holding out to close less than 3 deals a year but it also shows there are way way way too many realtors.
The internet has changed many industries, the high commission is going to be the bullseye for those trying to change the industry. You book flights/hotels/car rentals yourself on websites like Expedia (eliminating the travel agent), buy cars online from local dealers, Amazon sells everything under the sun for less than local retailers.
The title agent does all the "official work" with the documents/loans etc yet they don't get paid as much as the realtor. How can you believe that the realtor's days aren't numbered (too many, too high commission, actually not needed by law to get a sale done).
Interesting where the founders of Zillow came from:
Zillow Group, Inc., or simply Zillow, is an American online real estate database company that was founded in 2006,[4] and was created by Rich Barton and Lloyd Frink, former Microsoft executives and founders of Microsoft spin-off Expedia, Spencer Rascoff, a cofounder of Hotwire.com, David Beitel, Zillow's current chief technology officer, and Kristin Acker, Zillow's current senior vice president of experience design
Find out where the majority of buyers who have enough money to buy your house work and market there.
Most people can't afford to buy exactly where they want to buy, but if your house is in a reasonable commute distance to their place of employment, you stand a much better chance of buyers willing to visit your property.
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