WHY REALTORS DON'T LIKE TO WORK WITH FOR SALE BY OWNER

One of my favorite topics Bridget! Oh, where to start? How about the disclosure package that is usually completely or partially MIA? How about having to educate the FSBO on all that is needed on top of taking care of my buyer (but receiving $0 compensation for that)?

One of the first thoughts that always crosses my mind is: how willing are they to negotiate considering that they are trying to save on commission?

I wish them well but when I see "limited service listing, please contact owner directly", I hope that this is not the one for my buyer. On a plus side, at least she's offering to compensate a buyer broker. I just saw one with a 1%. Ouch. 

Hi Bridget, This is always tough because most of the time they don't have a clue of what is expected of a Seller. Not having the counsel of representation is going to be a real issue. When the Seller asks questions and the Buyer agent answers them, there is serious risk of agency being established where you may inadvertantly be acting as their agent. It will take a strongly worded letter declaring point blank that are not representing the Seller. You should also get an agreement signed that they are paying a commission. If they are not represented, they can decline to pay the commission without a signed agreement to do so. 

No no no no FSBO major mistake it is so hard to negotiate on your own property.  I used to list a ton of FSBO's when I was a new agent.  I will still talk to them but we hardly have any here.  They are allways known as the hardest to list.  This was my start in real estate nobody would talk to them.  I listed alot of them.  They are not easy but my persistency paid off.   There hard to get but they usually allways eventually list. 

Most realtors avoid FSBO's even in the MLS because they end up doing twice the work for half the commission.  If you represent the buyer you give your client advice, go through the contract with them explain the contract, do the home inspection, advise them as to repairs and so on.  In a traditional sale you then hand off the information to the listing agent who does the same thing for the seller.  In a FSBO you end up doing it all again for the seller except you can't give the seller any advice.  A FSBO transaction generally takes longer because ultimately a FSBO will want to then consult an attorney and so on.  Plus, FSBO sellers are more emotionally involved in the transaction and there is no one to buffer those emotions and the transaction becomes more taxing for the single agent involved.  I recently had a transaction end poorly, the listing agent didn't disclose her relationship as wife to the seller up front.  We went through the home inspection and the whole process only to find out that the lender involved hadn't approved the buyers at all and it turned out they couldn't do the transaction without the seller contributing 6% towards closing (contract had 3%) and the the lender and I both kicking in money.  We tried every angle possible to get the transaction done without the seller help and couldn't do it.  The loan wasn't possible without 6% and the seller and their agent got beligerant and I got all kinds of nasty calls and in the end they are refusing to release the buyers deposit, they can't keep it themselves because the financing was declined but they won't even communicate.  If this had not been a FSBO situation I doubt it would have happened this way.  Emotions often interfere with a smooth process.  FSBO's are twice the work and that's why agents avoid them.

I'm dealing with this now and I don't have a choice as much as I hate it because there is no inventory in South Florida.

Comment #1 pretty much answered your question. The real problem is agency. The buyer's agent has to be very careful not to advise the seller or answer questions that may be crossing the line of agncy. I know many agents who recall these transactions as the ones that gave them the most sleepless nights. 

As long as the terms of working w/ a FSBO satisfy the compensation outlined in my Buyer agency Agreement , it's full speed ahead representing my client exclusively !!!