Say You'll Pay a Nominal Fee as a Courtesy, Will You Mr. FSBO?
This Valentine's Day, I had the displeasure of inquiring about a property that was listed For Sale By Owner. My buyer is struggling to find something that works for her and found this guy on Zillow. I'm not about to bash Zillow. Truly. My sellers enjoy their presence on the site and the mutiple eyes it brings to their listings. In fact, most of my sellers can't wait until they pop up on Zillow. Why? They reach a ton of buyers who are searching the site for inventory, just like my gal did today. And I know when I paid for Zillow leads, most of those buyers already had agents. However if they don't, you can connect with an agent who is paying for the privilege of getting your contact info and the shot of selling you a home. For an agent like me that refuses to practice dual agency (representing both sides of a transaction) there's no down side. Not so much with the FSBO. Zillow buried his contact information and here's why that's a problem to a FSBO.
Folks that type in their information are being funneled to an agent who has very little interest in selling his FSBO. Why? Well, as he explained it to me when I finally found his contact information, "I'm only offering a nominal feel as a courtesy to buyer agents." Essentially, what this guy is offering is paying for your gas to show his listing. It's that bad. Way to blow any opportunity you have to actually SELL the house to a represented buyer...which again, is the vast majority of buyers on Zillow.
Mr. FSBO took exception with my reaction to his nominal fee. "You don't need to do anything. Buyers will use my title company and they will write up the contract." Yeah, like that's not a problem. RESPA was a foreign concept to him.
In addition to biting off legal trouble by violating the hell out of RESPA, Mr. FSBO is likely to find himself wasting a ton of time with unqualified buyers. Even though I explained to him that my buyer was not qualified unless she sold her existing home first, Mr. FSBO said, "I will take an offer from her without that contingency." Not sure how he doesn't get that, just because she doesn't have the contingency in the contract, doesn't mean she will be approved to buy it. I had to explain that one to him three times.
He strongly encouraged me to bring my buyer and collect that nominal fee. After all, his interests are what matter most and as he sold himself out on the phone, "I need to sell this place fast." I wonder if he would approve of an agent letting that kind of information out about his motivation? Talk about giving away your negotiating position. He would be the first one to get angry for being misrepresented by an agent in such a fashion, yet here he was just taking a machine gun to his foot.
Driving quickly to the end of our conversation, as what he was willing to do and what my gal could do, didn't overlap at all, I told Mr. FSBO that if he truly wanted to sell his home fast, he ought to hire an agent to represent him AND offer something in line with a living wage instead of his nominal fee to a buyer's agent. As I expressed it to him, "Not sure how many jobs you would be willing to do if the pay for the job was reduced to gas money." Again with the misconception, "But you're not having to DO anything." Well, he's right about that. I'm not lifting a finger to sell his house. Good luck with that. And when he figures out that the buyer agents getting the Zillow leads on his home are not taking clients to his listing either, maybe he'll wise up and hire someone to do this right.
If you can't afford to sell your home with an agent, you can't afford NOT to hire one in my book.
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