Home : Blogs : Gerald Mori - Realtor - Coldwell Banker, Oshawa : Lather. Rinse. Repeat.

Different people, different rules... apparently.

OK, I've come across this sort of thing before and I just sort of shrugged it off. But it seems to be increasing with alarming regularity and it drives me absolutely crazy.

Today I was searching for something online and I came across another one of these FSBO-type sites. You know the ones, "Your property listed with us online until it sells! Only $299! Sell your home for 0% commission!" OK, not a big deal, it's a free world and this business model, even though it's not one I would ever use, has its place. What really bothers me is that after sifting through their so-called "listings" and checking them against my local MLS I found many of them on both sites. Now I know that the FSBO site doesn't put them on MLS so how did they get there? Oh, I see, they were put on the MLS by a local Realtor® after the homeowner had listed with that local Realtor®.

OK, so were they listed with the agent first or with the FSBO site first. Well, that's where things become a little hazy. See, the FSBO site doesn't include any date information on any of its "listings" so you really have to get your crystal ball out of the shop if you want to find out how long the seller' s home has been wasting away in cyber -purgatory. I can tell when the agent listed (and sold) the home because that information is included in the MLS listing
as it should be. Also, if the homeowner has since decided that they weren't getting the results they had anticipated after forking over their hard-earned and decided to list with a Realtor®, why do their homes still show up on the FSBO site? And, riddle me this, why, when the home is sold by the Realtor®, does the FSBO site slap a big, red "SOLD!" graphic on the "listing?" Would someone coming across this house on their site not logically put 2 and 2 together and think that the owner was able to successfully market and sell his home using the services of this web site?

And that's the problem I have with this business model. As a Realtor® I have to be careful about how I advertise, and rightfully so. I'm not supposed to advertise in any way that can be construed as misleading or deceptive. This is certainly a good thing and something that I am in complete agreement with. So why don't these types of websites have to adhere to the same set of rules? When a home that was previously "listed" on their site is subsequently listed, marketed, and sold by a Realtor® and they put a "Sold!" graphic on it on their website is that not misleading? One FSBO site in particular goes so far as to put a graphics that says, "Sold for 0% commission!" on homes listed on their site after they have been sold by local Realtors®. How misleading is that? The MLS listings shows a 2.5% co-broke and I doubt the listing agent is working for free so how is that 0% commission? Oh, I guess it isn't, is it? If I operated the way some of these sites do I'd be hauled up before the Ontario Real Estate Association in short order. But these guys? Sadly, they have no governing body to ensure that they act in the public's best interest. And that's a shame.

Lest anyone think that I'm upset because I can't employ similar shady business practices let me assure you that that is not the case. I have no problem competing for business with anybody as long as we're all playing by the same rules. These FSBO sites seem to be run by the same peopl decrying the fact that MLS is closed and that they should be given access, it's not fair that only Realtors® have access to MLS, blah, blah, blah. They really seem to want to have their cake and eat it too. My answer to them is that when they get their real estate licence, pay the initiation fees, and monthly board fees then they too can have free reign of the local MLS. This doesn't seem to be the answer tehy're looking for however.

This is what seems to be happening in Canada right now, I'm sure there are similar sites in the U.S. How do you deal with them? I just want them to keep their hands off properties that the owners have decided to sell using the services of a Realtor®. That means once it's listed with an agent it comes off the FSBO site and there is no 'Sold!" graphic slapped on it once the agent sells it.

Posted by Gerald Mori - Realtor - Coldwell Banker, Oshawa on 03/07/2007 07:36 PM

Comments (26)

fsbo, deceptive, misleading, realtor

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26 Comments on Different people, different rules... apparently.

MAR

2007

Truth in advertising laws perhaps? I really don't let it bother me that if someone wants to pay $299 to achieve less results as a free postlet or vflyer and some listings on craigslist can achieve, more power to them? I wonder how much of their business is referral from past customers.

Gerald,

I will say that I completely agree with you. Around here we are being told that we can not call FSBO or even mail to them, I don't know about everybody else but FSBO's are a great way to get listings especially as the inventory grows. I do work FSBO and expiredes fairly hard and I do think that as the market grows we will see more FSBOs go away.

Gerald:

GReat post. I work with FSBOs as well. What you say concerns me too. It's not a level playing field and absolutely should be. When I first started working the FSBOs the site situation confused me and left me baffled at what they get away with. I agree with you. THere is need for some level of governance.

Deep Pockets are always targets for those who want to share in the revenues of your hard work. The bleeding hearts will always champion there side ( for the greater good of us all they tell themselves ) In todays business world it takes very little effort to create a business on the Internet that is self sustaining and can create a cash flow. Enough of one that the incentive is high enough to out weigh any risks .

Hi Gerald,

Like a few of the others, I see your frustration.

Please keep in mind, I don't know if Canada different, however in the U.S. you do not have to be a "dues paying" Realtor (as a result of a huge agent lawsuit in San Diego CA, the board lost) to submit a property to the MLS. You need onlybe a licensed agent, and an MLS subscriber/member. In the U.S. they are referred to MLS'O only. That means they only subscribe to the mls and are not Realtors. Sorry to say, these folks are not held to the same standards as far as the Code of Ethics. However they do need to comply with MLS rules and regs. of the area.

And as for different, yet not equal standards, you bet, sorry to say it happens all the time. As for the seller hiring an agent and selling the property themselves, yes they can do both with an EA, an Exclusive Agency listing. That way the seller has hired an agent (again not necessarily a Realtor) however he/she reserves the right to sell the property themselves without paying any commission.

Some time back while previewing properties, I drove up to a home and ABC Realty had a sign on one side of the walkway and a FSBO sign was on the other. I knew immediately I hadn't bothered to read the mls listing completely, and of course it was an EA listing. And just, 2 days ago I ran across an mls listing that said: "All negotiations and disclosures are to be conducted directly with the sellers". After clicking on the agent's website it was flat fee $295 service that submitted the property to the MLS.

It's just another way of doing business. And if it's different in Canada, I love to hear about it.

Another thing about FSBO sites is that they don't necessarily update if the listing has sold. One of my clients found a property on a fsbo site that would had everything that they wanted at a bargain price. They emailed me the listing so that I could check it out. Since I always start with MLS status, I found that the property they wanted had listed on the MLS and sold about 2 years earlier-at the price showing on the fsbo site. This is now one of the things I caution my buyers about when they go out on the web to search on their own.

Ken - Yeah, when I first started with FSBOs it was an eye-opener for me as well. It took me a little while to adjust to dealing with them. I was quite frustrated at first.

Lynda - As far as I understand these types of do-it-yourself sites are not allowed to put listings on the MLS up here. Of course, that may change in time but I hope it won't. Time will certainly tell.

Irene - That was one of my main points; you have absolutely no way of knowing when a home was listed on one of these DIY sites. As a result there is a proliferation of confusion and misinformation. I really object to them throwing the "Sold!" stamp on the listing after it has been sold by a Realtor, something that their web site failed to do. Then they essentially show up and take the credit. Nice.

Thanks for the comments everyone.

Jerry

There will always be a place for a variety of business models. The 'no frills' services obviously exist fora reason - they are making money and they have clients. However, there is no substitute for an experienced, hands-on Realtor. Numerous studies have shown the benefit of having one's own Realtor. Now your comments on the different advertising rules...that certainly raises an excellent point!

I agree with you Gerald. The question is: How is this big world of the Internet get policed? It seems like it continous to be a problem until someone takes action that can stick.

Hi Gerald.

In Ontario, unfortunately RECO only controls licensees. You've written a good complaint on the subject. If a property is no longer "for sale by owner" andthe FSBO advertisement is still on the web or if the property was sold by a licensee and the FSBO advertising website is taking the credit, then the consumer is surely being misled. Why not try to submit your article to whatever consumer protection agency there is in Ontario.

Eh?
(subtle hint that I'm in Canada)

That can be misleading, despite the fact that by saying it's sold, really isn't lying I guess. However, we of course cannot send out a just sold postcard unless we actually participate in the sale, so double standard? I have incorporated FSBO calls into my routine, and I have had some success with it. It takes a lot of patience and persistence, and being pleasant and supportive I find is helpful as opposed to trying to corner them into a listing.

I totally agree with you Gerald, there should be some set regulations for the FSBO sites. I have run into the same thing and have also see the Flat Fee listings in the MLS that some realtors have resorted too to complete. Unfortunately, it isn't a fair world and I guess I have to remember that. I try to ignore the negative and build on the positive of what a realtor has to offer the sellers. I believe our knowledge of all aspects of real estate and protecting our client is so valuable. This is what I try to share and live with sellers out there. Some, of course, will not agree. I worked with a couple for a long time looking for property and they found a home that was a FSBO. The seller refused to pay anything to a realtor. I have their listing, but lost out on a BIG commission as the house was over 500,000 that they are buying. Stewing about it would not do any good, so I count my blessings and go on.

Funny I picked up a flyer for a property that has been a FSBO for over a year when a discount house picked it up... and on their flyer thy have a hot sheet on the back - and on the front it says.... "Friends Dont Let Friends Pay 6%"

Obviously Friends dont help you sell your house either, the flyer is poor quality and is more about the company selling than the property. What is sad is that I know the seller and have offered a quality service - it is all about the money.

Gerald,

Good post, turn any fsbo into a positive find these homes and buy them on a lease with option to purchase then turn around and lease option the home out with a positive cash flow. Everyone wins the seller, you the buyer and your tenant who gets into the home even with subpar credit. And if the seller won't sell it on a lease option to you for what ever reason give him your card and have him call you when he cannot sell it himself 90-95% fsbo's don't sell or they get fed up with the hassle. And maybe you will get a client out of it all. And as Red Green says keep your stick on the ice!!

Good Day,

Duayne

Thesa - Sad but true. In the course of my life I've usually found that when people make decisions based solely on money things rarely turn out the way they had planned. I love how some people can't be bothered to do things right (like a simple flyer) yet expect people to call them and give them business. Want to impress people? Do things right and for crying out loud, proofread and check spelling!!! Should that even need to be said?

Dena - Yeah, the Flat Fee thing is a little irksome for me as well. I understand that some people are pretty up on things and may not require the full service that a Realtor provides when selling their home. Hence the different models and companies that exist. What does bother me is that many of these places basically "grab the cash and dash." They promise the seller the moon but once they've successfully separated them from their money do they really care if the house sells or not? A mere trifling detail at that point to some I would think.

Gerald,

Thanks for the post. We have long been saying in the states, that these FSBO sites need to be obligated to adhere to the same rules and regulations as we do. Where is the outcry for consumer protection? Are we the only one who see unethical behavior at play.

MAR

2007

I love the fact that they have stuff up on their sites that sold a year ago and still listed as current. I think they do it on purpose to thwart my prospecting!

Oops, that was me. Somehow I got logged off when I went on vacation last week!

Welcome back Gerald! awesome post! great topic and glad you brought it light. I wonder what entity would handle the false / misleading advertising laws... a copy of the MLS sheet and of that webpage could be easily faxed. the site that says SOLD for 0% commission? seems bogus to me. dont waste your energy on that junk, but if you're bored, fire off a fax and see what happens.

better yet, focus on your business.. run your race and print those out to show prospects that are on the fence about it. :) again, welcome back! we need your quality posts dude.. (no pressure ;)

At my office someone brought in a photo of their morning newspaperman driving down the street delivering tossing the newspapers out of his car - he was in a company car with a very prominent discount commission real estate company's logo painted all over it!! I don't think it would be allowed but I think it would be very funny to turn that photo into a postcard I could mail out to a farm area - "Do you know where your real estate agent is on a Sunday morning?"

Rick - Yeah, I ran into the same problem. I figured, "OK, at least I can use the FSBO site's list of homes to prospect from." That's when I started to see that it was going to be a waste of time. The first thing I did was start checking the addresses in MLS and found that the majority of them had recently been listed or listed and sold with a Realtor. So much for the reverse farming plan! Not to state the obvious but the data on most of those sites is woefully inaccurate.

Nick - I agree wholeheartedly about concentrating on my business and that's what I intend to do. Still, it's discouraging and a little disheartening to keep seeing this sort of thing. But I guess it's likely here to stay.

Pamela - that newspaperman may or may not have been working for the real estate company he was shilling for. Up here some companies will pay people to wrap their vehicles with the company info as a form of advertising. Not sure how good that marketing plan is. If you're paying someone who has no vested interest your business to promote that business you're taking quite a risk. Then again, maybe he was an agent and that would make for a brilliant postcard!

Thanks for the comments everyone.

Jerry

I never checked. I think I need to now. That is horrible and very misleading. I assume when I see a sold across a listing that they did indeed sell the home. It never crossed my mind that they might not have.

Gerald,

I am glad you are reading between the lines. These fly by night companies truly are not working for free. I contacted a seller that was listed with a discount brokerage firm and they were very misinformed. I had asked them what the discount brokerage was charging for a fee. They explained to me that the fee was only 3%, and if they brought the buyer that that 3% was waved. OK, so the discount brokerage makes no money either way (they were offering a Co-op of 3%?)

I haven't kept a scorecard on keeping track of these things. All I know is that if possible I don't deal with any of these types (the cut-rate businesses) because I thing that they are bad for the industry.

Dan - Yeah, I hear you. A lot of these places are just looking to get people to part with their money and do a poor job of explaining what the consumer is getting in return, which usually is very little.

Roger - The bad ones are definitely bad for the industry. I have no problem with discounters (for lack of a better word) as some people don't really require full-service to complete the sale of their home. If they don't mind doing some of the work in return for paying a lower commission then more power to 'em. It's the online sites who fill the seller's head with tales of how incredibly easy it will be for them to sell their home once they give these jokers their fee that get my back up.

Jerry

MAR

2007

Hi Gerald..

Some agents should charge less.....Here FSBO's and commission discounters are not working very well, our office has a 40% market share, the Best discounter has less than 1/2 of 1%, They do not have the funds to promote and hence little on no exposure for Sellers. The Same goes with FSBO's they soon learn putting up a sign, placing an ad on-line in FSBO site does not help, it about paying someone to sell you home that works !!! When 1100 Realtors know about a home or have access to search on MLS they soon sell a clients home ................assuming it's priced right !!

Here (Victoria BC) 95% of FSBO's list in 30 days.

Cheers, have an awesome day.

PS: I love referrals.

FRED CARVER www.fredcarver.com

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Gerald Mori - Realtor - Coldwell Banker, Oshawa

Whitby, ON

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Coldwell Banker 2M Realty

Address: 342 King St. W., 2nd Floor, Oshawa, Ontario, L1J 2J9

Office Phone: (905) 576-5200

Cell Phone: (905) 409-9840

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