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.
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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
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In 2011, VPiX had photographers in 41 states.
FSBO's photographed 5,473
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In 2012, VPiX had photographers in 45 states.
FSBO's photographed 7,859
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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.
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