Home inventory drying up? Lots of FSBO's Out there.

By
Services for Real Estate Pros with Virtual Pictures Corp. (VPiX)

I've been watching a few agents hem & haw (bitch) about how hard it is to work with FSBO's. And to some extent, some of the gripes are certainly valid.  A lot of FSBO's are over bearing, righteous know it all's -- and (REALTORs) tend to regard them as too hard to work with. 

Granted. Some FSBO's are just that. A real pain to work for. I've been there and done that. 

But with the home inventory drying up, foreclosures have shrunk down now to about 34% less (October 2013 vs October 2012) and the banks not releasing alot of their REO's into the market... what's a hard-working, self-respecting REALTOR supposed to do

(a) Get a part time job at McDonalds

(b) Find a way to work with FSBOs

If I were an active REALTOR right now, my choice would be (B): Find a way to work with FSBO's. Final answer. 

Home Owners do not need a REALTOR anymore.  Before some of you scream:  "Sacrilige" to me, let's look at the facts.

1.) REALTORs used to be the gatekeepers of the MLS. Not anymore. Anyone can post their property online today. Slip $300 into the pocket of an agent, or sign an agreement for limited representation and you'll get your FSBO listed on Realtor.com.  They can take their own photos. They can hire national photography firms like mine and have 360 tours done. They can post their own ads on CraigsList and a dozen other sites online.  So do we need the MLS?  Ask the hot-shot agents getting screamed at for NOT posting their hip pocket listings into the MLS.  

The fact is, the MLS is an out-dated tool, which is just about as useful as an 8-track tape stereo. 

2.) Attorney-At-Fact transactions.  Real Estate Attorneys are out there. Some agents I know fear them and don't like to mention them. FSBO's are not 100% stupid. They know a few things and a few of us (former) REALTORs have no problem educating them, that having a buyer's offer reviewed and handling the closing is a good use of $3,000.

* * * * * * * * * * * *

My company, VPiX 360 shoots a lot of FSBO's. While I don't publish the results of how many FSBOs we shoot to Inman News or Rismedia, maybe we should. Because the numbers are up. Not just a little. I mean a lot.

In 2010, VPiX had photographers in 35 states.

FSBO's photographed     3,092

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

In 2011, VPiX had photographers in 41 states.

FSBO's photographed     5,473

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

In 2012, VPiX had photographers in 45 states.

FSBO's photographed     7,859

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

In 2013, VPiX had photographers in 48 states**

FSBO's photographed     12,370

Because 2013** isn't over yet, my numbers are estimated for this year. But we're pretty close to nailing that number. 

 

If the home owner has a home valued at $500,000 and they owe 492,000 to the bank, you don't need your HP Financial calculator to understand they can't afford your 6% agency sales commission.  Telling them they "have to find a way to come up with $22,000 at the time of closing," isn't a good answer.

You either:

(a) Change your 6% sales commission to 4% or less

(b) Walk from the listing opportunity and let a discount agency pick it up,

(c) or, they hire us to shoot their home, drop a yard sign in their front yard and we refer them to an agent who LOVES working with FSBO's.

Granted, we can't take a commission but we've made a very comfortable six-digits just by shooting FSBO's and marketing them on CraigsList and building single property web pages advertising their homes for sale. I'd assume there's a few struggling agents out there that would LOVE to be making six digits just by working with FSBO's.  As Barbara Corcoran likes to say, "There's proof in the pudding." And we seem to have the recipe for that. 

Do I need my license activated to do this?  Nope. Am I violating RESPA?  Nope.  Am I pissing off the local MLS?  Absolutely. And I love it.

Bottom Line: FSBO's are not going away. They are increasing. In our case, over 420% in just three years. And we're just one company. 

In 2014, we will be offering a private iRiS MLS server to one broker per state.  So at the end of 2014, we will be able to track the total number of FSBO listings and sales, including vacation rentals, timeshares and residential sales and publish them.

If anyone wants to get a preview copy of my " FSBO Best Practices " report for 2013, drop me a note. I'll be releasing the report in December. 

 

Posted by

Bart Wilson | CIO
..................................................................
Virtual Pictures Corp (VPiX®)  
iPhone: (719) 645-9940  |  Skype:  vpix360 

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Carla Muss-Jacobs, RETIRED 10/27/2013 01:50 PM
  2. Praful Thakkar 10/27/2013 03:29 PM
Topic:
Real Estate Technology & Tools
Groups:
Realtors®
Gadgets, Tools, & Extras
Tech Corner
Activerain MLS Online
Tags:
home inventory
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Rainmaker
1,942,665
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Listings are king and queen, jack and ten and all the other cards. You can win more market share if you have something to sell, inventory.

Oct 27, 2013 01:26 AM #10
Ambassador
1,960,405
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

(a) Change your 6% sales commission to 4% or less

 

The same can be said as soon your own competition heats up. .

Are you going to reduce your prices then?

of course not!

Is all about the perceived value. . over 90% of homes are still being sold using an agent. . 

a long wait before FSBO dominates the real estate market. .

 

Why are people willing to pay for photographic services .. when they own a camera themselves? 

exactly!

Oct 27, 2013 02:11 AM #11
Rainmaker
128,120
Bartley Wilson
Virtual Pictures Corp. (VPiX) - Monument, CO
VR Software and 360° Solutions

Wow, thanks everyone for the great feedback.  And especially for Bill Wagner, I can tell you most assuredly that FSBO's are in indeed way up.  Yes, I got you down for a copy of my report in december.  Swanoepel does a good job on covering the real estate trends in his annual reports, but he doesn't seem to cover the FSBO side of the fence in a lot of meaningful detail. 

My company has an edge. Access to 8,000+ photographers and a little over 7,260 brokers and agents are using VPiX 360 camera kits to capture 360's of their homes.  I speak to maybe 3,000 of them annually.  

My new website and blog will be collecting a lot more data from them in 2014, so I expect my "FSBO Market Scare," report in mid 2014 will be a shock / wake up call to a lot of us out here still thinking the 6% sales commission model is going to survive much longer.

I use the word Market Scare as my rerport title, because the growing numbers are so scary, it's forcing many rank-and-file REALTORs to create blended service models so they don't starve to death.  

Exercise: Pick up your local Jersey paper and look at the # of homes for sale. Then go look at ForSaleByOwner.com -- I just took a peek five minutes ago.  132 pages of For Sale by Owner homes in Jersey alone. 

FSBO's are a booming part of our real estate landscape. The get bigger every year. We've made a nice pile of money by helping them market their homes.  If I were an active agent right now, I'd be looking at working with them to find a buyer so I could pocket a 3% sales commission.  

In Colorado alopne, we have 10 VPiX certified VPiX Rockstars. We shoot for some expensive homes in Colorado ranging from $1 million condos in Aspen, to $400,000 homes in Denver and few $300,000 dollar homes in Monument.  The money is certainly out there.

We can either;

(a) Team up and figure out how we address the FSBO market, or

(b) Let the FSBO's find their own way, and make ForSaleByOwner.com the place to go.

Which one do you prefer?

If you prefer (A), we want to hear from you soon. I'm looking for 12 beta testers for a new, Open MLS system we will be launching in 2014. I want that system to be designed and built "By REALTORs, for REALTORs."

 

Oct 27, 2013 02:39 AM #12
Rainer
224,010
Ron Climer
Keller Williams Realty Mountain Partners - Tryon, NC

As I talk to new agents about calling Fsbos, I like to use this analogy.  If wwe were life insurance salesmen instead of Realtors, wouldn't it  be cool if we could wake up every morning and go to craigslist and find an ad that said   " Young man 30 years old with two kids, living pay check to pay check.  I can hardly afford to pay my cable bill but if you would just like to call me and come by and  chat for a while, Ihave time"  Would you call that guy?  Would you govisit with him and chat?  If you did go visit with him and chat, could youget him  to like you?  Could you get him to trust you? Could you get him to listen to you?

Fsbos are prospects.  They are not prospects that are already sold.  They are not prospects that have no objections. My definition of a prospect is " Someone that needs or wants your product, can afford it, and will probably buy it from you or your competitor in the near future"   Fsbos are HOT prospects.  The only excuse for not calling them is I already have more prospects than I need or I can't handle the rejection.

Oct 27, 2013 03:50 AM #13
Rainer
305,808
Brad Rachielles
CENTURY 21 Peak, Ca BRE# 01489453 - Upland, CA
REALTOR, CDPE, Upland, CA

Just because you can do something doesn't mean that you should.

You CAN Take yourown photos......

You CAN put your own sale sign in your yard.......

You CAN represent yourself in a transaction.......

You CAN do your own home inspection........

You CAN represent yourself in court..........

........... but why would you not seek a professional  who has been there many, many times and will give you the benefit of experience and maximize the benefit to your side of the transaction.

Oct 27, 2013 05:53 AM #14
Rainmaker
1,291,908
Wayne and Jean Marie Zuhl
Samsel & Associates - Clark, NJ
The Last Names You'll Ever Need in Real Estate

FSBOs are rare in our area - central NJ. Glad to hear that your company is doing such great business where you are!

Oct 27, 2013 05:58 AM #15
Rainmaker
806,889
Lanre-"THE REAL ESTATE FARMER" Folayan
Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

Bart we as Real Estate Agents need to go out there and offer FSBO's value. Dont just knock once and think that you are going to get the listing. At least knock six times. But offer them something different everytime. Ex: Real Estate Market Reports in that neighborhood,Homes sold that week/month in that neighborhood,Things you can do to increase the value of your home,Newsletter,Top five things you should do before you put your house on the market and How to get your home sold for top dollars.

 

Plan on doing Door knocking soon. Congratulations on the Gold Star.

Oct 27, 2013 07:02 AM #17
Rainmaker
806,889
Lanre-"THE REAL ESTATE FARMER" Folayan
Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC - Bowie, MD
I don't make promises.I deliver results.SOLD HOMES

By the way sorry I forgot to ask are you located anywhere in Washington DC,Maryland and/or Virginia? I might need your services thats why I asked.

Oct 27, 2013 07:04 AM #18
Rainmaker
128,120
Bartley Wilson
Virtual Pictures Corp. (VPiX) - Monument, CO
VR Software and 360° Solutions

Hi Lanre,

Yes sir. We have Virginia, Baltimore - most of Maryland covered and DC area.  I'll reach out to you on Monday.

 

 

 

Oct 27, 2013 07:42 AM #19
Rainer
18,907
Peter ReJune
United Realty Group - Palm Beach Gardens, FL
Trusted for Service, Respected for Results

Enjoyed your blog on FSBO, I have no axe to grind with FSBO, look at them as opportunity rather then fools like so many Realtors seem to. That being said, based on research Ive done with owners.com and FSBO in my area of Florida Ive found most of the listing shown are not active, to find out the truth about these sites Ive called all listing in my area in price range 400,000 + and found most were working with a full commission MLS listing agent or were sold by a full servive agent for full commsion but were still live on the site, found some that were on the site but were no longer or were never for sale, actually spoke to an owner in Kentucky who called me to find out why I called him on his PB home which was never for sale. i gave him the link, he was pissed. Out of 30 I recently called only 5 were real and for sale. My take away was that these sites are there to cull leads for agents more then sell homes, listing stay on the site for years after they are sold or cancelled. Why is it that they dont post sales success rate, percentages, If they did as well as they want you to beleive they would provide the proof but they dont. To that end I worked with 4 FSBO who had there homes listed for up to a year and they recieved a couple of inquiries from bottom fishers but nothing serious the preponderance of calls were from Realtors looking to list the home.

Put me on your list I would like to know what your up to relating to FSBO

Oct 27, 2013 08:22 AM #20
Rainmaker
918,214
Ginger Harper
Coldwell Banker Sea Coast Advantage - Southport, NC
Your Southport~Oak Island Agent~Brunswick County!

I  enjoy the FSBO's and the Expireds.  I just took a class that has helped me feel even more comfortable in working them.

 

 

Oct 27, 2013 09:27 AM #21
Rainer
172,981
Marc McMaster
RE/MAX Centre Realty - State College, PA
Putting my clients before myself

We have very few FSBO's in our area and the vast majority of them don't sell as a FSBO, they end up listed. 

Oct 27, 2013 10:41 AM #22
Rainmaker
2,518,097
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

While our inventory in the Greater Sacramento region continues to be low, we haven't been saturated with FSBO activity yet.

Oct 27, 2013 10:59 AM #23
Ambassador
4,299,366
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Bart, FSBOs were there, are there and are going to be there in any market. In this market, it's even easier for them to SHOW UP!

BTW, I'd appreciate if you can send me the copy of your FSBO report. Love to list an FSBO!

Oct 27, 2013 12:43 PM #24
Rainmaker
1,560,081
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

I'm glad your business is doing well.  As an Exclusive Buyers Agent my brokerage doesn't take listings, and the information from our RMLS is invaluable.  So let me get this straight . . . your projected 12,370 FSBO's photographed in 2013 equates to about 247 FSBO listings per state.  Yeah, that's a big dent in the listing market, and I'm sure your insightful attitude is going over well.

Oct 27, 2013 01:10 PM #25
Rainmaker
757,851
Norma J. Elkins
Elite Realty Group - Morristown, TN
Realtor - Elkins Home Selling Team
Very good post. I work a lot with FSBO and it seems we do very well with them. I agree with Lanre - sometimes you have to build your rapport with them. I would like to get your report also. Thanks!
Oct 27, 2013 08:02 PM #26
Ambassador
779,562
Doug Rogers
Bayou Properties - Alexandria, LA
Your Alexandria Louisiana Agent

I LOVE, LOVE, LOVE representing a buyer for a FSBO transaction. As someone who made a living negotiating real estate deals during the Great Recession, bartering with a plumber, accountant, social worker, etc... is a welcome change of pace. My represented buyers leave the closing table with a giant smile on their face.

Oct 28, 2013 12:57 AM #27
Rainer
339,696
Raymond Denton
Homesmart / Evergreen Realty - Irvine, CA
Shady Canyon Specialist

I give FSBO's a copy of For Sale in California, and let them know I'm available when questions arise.

Oct 28, 2013 01:21 AM #28
Rainmaker
465,747
Drick Ward
NEPTUNE REALTY - Virginia Beach, VA
"RealtorDrick" - Experienced Representation

Thank you for sharing this information!

Oct 28, 2013 01:26 AM #29
Rainmaker
598,808
Tracy Lee Parker
RE/MAX Dallas Suburbs/PLATINUM PROPERTIES & MANAGEMENT - Rockwall, TX
Buy*Sell*Lease

I walked up to a home I knew had been on the market 3 times before, all expired the listing. I told the seller I had a possible buyer for their home,  could I show it?  The sellers were so happy, they gave me 3.5% commission and we are closing this week. I present buyers to FSBO's all the time, even sold my exe's home and saved him over $9000!

I would be interested to be on your beta list for the Dallas/North Texas area if you are doing this area.

Oct 28, 2013 03:11 AM #30
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Rainmaker
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Bartley Wilson

VR Software and 360° Solutions
IDX Websites + Virtual Tour Camera Kits
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