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The Dirty Little Secret that the FSBO Companies won't tell you.

I keep seeing and hearing about "dirty little secrets" that real estate agents won't tell their clients. Most of them turn out to be pretty stupid points. However, today while going through my morning routine (dead-heading, so my brain needed something to do) I thought of the dirty little secret that FSBO companies don't tell their customers. We all know what it is, but many of us just might have never thought of it this way.

They don't care if you sell your house using their service.

That's it. It doesn't affect their business plan if you sell or don't sell your house through them. They only care if you list your house through them. Their business model is only dependent on you paying $499 (or whatever amount) upfront, and then going on your merry little way. They need as many people as possible to pay the $499 and go on their merry little way as possible.

Sure, they need somebody to actually find a buyer through their service occasionally, but as long as they have enough sales for a few testimonials, they'll be OK. And, they don't care if you sell in 6 day, 6 weeks or 6 months. In fact, some of the companies would prefer that you not sell right away, as they'd love to get another $499 out of you to list again.

Let's compare that to a traditional full-service, commission based real estate agent. No sale = no money. That's right, I don't get paid if you don't sell your house. Let me say it again, I don't get paid if you don't sell your house. I talk with you about pricing, we prepare a marketing plan, and we market your house. After we find a buyer, we help you negotiate the sale, and then we make sure that the buyer follows through. We also make sure that you (the seller) don't run afoul of any rules, or mistakenly breach the contract as we move from contract to closing. We are there to protect you, and help you. We are there to make sure that everything runs smoothly.

Where is the FSBO marketing company? They cashed your check, and they are hoping that you don't call, because it takes time away from getting $499 from someone else.

Please don't forget to rate this post. Thanks.

I'd love to hear from you...

Posted by Lane Bailey - REALTOR & Car Guy on 07/24/2007 08:56 AM

Comments (24)

FSBO Marketing in the Home Selling Channel

business of real estate, seller, client protection, discounters, fsbo, ethics, honesty

Originally posted at: Looking Out From the Garage: The Dirty Little Secret that the FSBO Companies won't tell you.

This post has been included in Georgia Information Gwinnett County, GA Information

24 Comments on The Dirty Little Secret that the FSBO Companies won't tell you.

JUL

2007

Good point Lane, I hadn't thought of this before.

Great post. I wonder if there is any data that tells us how many homes acre actually sold out of all the FSBO listings over a 12 month period.?

Great post ,I always wonder what their stats are

We know this all too well, Lane. Because when we list a house that was previously listed by a FSBO in the MLS service, the other company gets paid the same, whether it was successful or not.

AMEN BROTHER!!!!! Finally!!!!!! I am printing your blog as we speak and am going to share it with all those expired listings that used one of those horrible companies. I have personally sold several homes that were listed by those discount guys who could not give a rat's behind about their clients. The war stories I have heard and the damage that these people have done are unforgivable. There is one company who basically opens up shop in towns throughout the state, and once they have used everyone, they close shop and the reopen in another town to do the same over again. It is maddening that they continue to get away with such tactics simply because they are being funded by a well known nationwide restaurant chain. You know who you are and should be "ashamed of yourselves".

Great post Lane!

RIGHT ON BRO!

I actually think they prefer that the homeowner NOT sell their home because then they don't have to do much and they aren't liable for anything. They also seem to make a ton of money on homeowners selling them extra stuff like open house signs and marketing flyers.

I think many of them will be going by the wayside soon...

Great post however, I haven't heard of a FSBO company taking a check in a very, very, very long time. Normally it is credit card which is charged immediatly, just in case your were thinking of canceling your check! Anyway, I beleive the public is catching on, at least in our market. They now understand that it takes a full service company to sell thier property and from what I have read FSBO market share is down throughout the nation.

Terrific post Lane. You explained it very well. Every potential FSBO should read this before signing on the bottom line with one of these companies.

Super post and so very true....... FSBO owners are also not told that FSBO homes that do sell usually sell for much less than if a Realtor sold it.

Simple point that is overlooked by FSBO's. Hopefully they will read this and realize it.

Your post took the very words right out of my mouth! I recently had to explain the cold hard facts that you ponted out to a FSBO. He was a bit of a die hard because he thought if he hung on just a little longer, his investment would finally pay off. Then he called and asked me to list his home. I am so glad you found the words to write about this. I give your post a 5 and two thumbs up!

SEP

2007

Thank you all for the great comments. This has been one of my favorite posts...

SEP

2007

Great post Lane!!! The stats I get from my corporate office say that only 2% sell.

Yes, a good way to look at it indeed. Good comment.

OCT

2007

Great blog! I just read and agree completely. Too bad sellers don't feel the same way. They think that they can do this on their own. Too bad most of them just end up losing more time and money.

OCT

2007

Boy, I just realized that I hadn't answered all of the comments. I am bad...

Jason - Thanks. It just occured to me while talking with a FSBO guy. He had been advertising his home for a year, and paid about $6k including MLS listing and marketing... but he was positive he was saving money. BTW, on his $200k home, that is the three percent he wasn't paying to a listing broker.

John - We would have to rely on the numbers from the various companies. I know of a couple that have claimed a sale after an agent took the listing (but while it was still under their 6 month agreement).

Margaret - Me too.

Ardell - It is part of their business model. I have told a few people that I would give them the same deal...

Nicole - Let us know how it works out.

Melissa - Thanks.

Patti - There are companies that make ALL of their money on the extra junk.

Debra - When the market gets a little ugly, people come back to us.

Wayne - Maybe we should try to get this on the major media...

Brad - I'm with you, but the current studies are all pretty flawed... one way or the other.

Ashley - I have little hope that enough of the FSBO or unbundled service users will read this.

Donna - Thank you.

Keith & Robin - I see a lot of statistics floating around. None of them agree. More importantly, nobody wants to reveal their methodology, so we can't know how accurate any of them are.

Tania - Thanks

Zen - I agree. I hope that this will help someone, but I'm not hopeful... unless it gets picked up by Fox News.

NOV

2007

This was such a good post, I had to come back and read it again. Plus I wanted to see any additional comments. Don't you think this is an excellent post for localism with a little tweaking for the consumer?

Its too bad that people don't apply any logic when they think they are saving money or they would figure this out themselves. But too many people think that their house is just so special that thats all it is going to take to sell it.

NOV

2007

Donna - Thank you. I have it on my other blog which is completely consumer oriented.

Hugh - One of the problems is that the media and all of the "objective" sources always are quick to mention one side of the equation, and a little slower on the other.

NOV

2007

Lane - This is another good point to add to our FSBO presentations. Thanks.

Steve - Let me know how it works for you.

SEP

2008

Man you are right on the money with this. I really feel bad sometimes when people dont understand why we are motivated to sell their house (its more than just the money) and why FSBO companies care less (it is all about the money and they already got your $!)

SEP

2008

Shane - Thanks.

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