Today I discussed with a reporter the upcoming media spot dedicated to sensationalyzing the FSBO discount flat fee broker.
I happen to have a combination company but not a discount company or flat fee company. I own more websites dedicated to the FSBO seller than anyone in Michigan. So the reporter wanted my spin....and spin was the right work.
The problem is there is no spin. There is only the truth. Some sellers are very well equiped to sell their own homes....most are not. Some sellers understand the risks....most do not. Most sellers have a misconception they are going to save thousands in commissions....most do not.
So why do people sell on their own? They lure of potential savings. If you are truthful with yourself answer these questions.
If you could save $10,000 dollars on your next car purchase, if you did a few things would that interest you?
Here is all you have to do.
- Mount your own tires
- Bolt in your own seats
- put in your own floor carpets
- screw in your own sunvisors
- mount your glove box cover
You get the idea...most of these things we actually could do. They may expose us to some liability but some of us might be willing to do it for the lure of a significant savings. The reporter thinks he knows why people use For Sale By Owner programs. The number one reason is the lure of commission savings.
Lure is the right word. Most buyers expect a larger discount because the seller is not paying a commission...so the home should automatically be priced below one which uses a realtor. The buyer never considers the advertising costs a seller has to spend to get the same market exposure as a "Realtor" brings when they promote a listing. Advertising must be free....right!
On average buyers pay between 3-8% more for a home listed with a Realtor. So like the reporter that is the commission that inflated the sell price! Wrong!!!! the difference is a professional explaining the benefits and features of the home, property, neighborhood and schools so the buyer is willing to pay more for a better product that meets their needs.
Seller's over sell and create skepticism in the buyers mind concerning condition. I have had proud seller's take me through their homes...."you'll love this, OH did you know we just painted and added a new toilet paper roll holder"! Seller's are so anxious to get an offer from everyone that sees their home...so they over sell.
I love having the combination company...I display over 2000 listings across more than 18 major cities. I have full time agents working on commission just like the traditional companies too. They also share in the FSBO sign-up fee. We know that the number of FSBO sellers is going to increase because of the economy but we also know they will convert to full service listings when they are unable or decide not to sell as a FSBO.
So does FSBO programs work...Yes for some people...certainly not the majority. Why do people try it if it does not work for the majority? The lure of commission savings. The lack of understanding what a Realtor actually does, the media, banks, lenders, on-line listers the list is long but the bottom line the media has played this song so loud and long. People are not looking at the real estate profession as the professionals we are at this point. The public is looking at us as over paid for the services we render. Just for the record our signs do not resemble these in the slightest.
The first self serve gas station only had a few customers...but try and find a full service one now! The lure was cheaper gas...where did that go?
I didn't mention the liability issues with disclosures, or contracts this is all things professionals know about and we point out...many companies that offer FSBO programs do not even have licensed agents...no need the For Sale By Owner client is not represented! The other issue that is going to be addressed and has been already in some states is minimum service and no service companies. The Broker that is after the quick buck and wipes his hands after placing a listing on the MLS for the For Sale By Owner.
So is there a spin to this story? Yes...we are not going to eliminate the For Sale By Owner. Will the FSBO be able to sell....yes in some cases. Is the For Sale By Owner program something that everyone should try or want to try? No, most will only waste their money.
So was I happy a reporter twisted the facts and a broker helped by not revealing the true story of the For Sale By Owner...no. Will this help my business probably...but we explain the facts...take the time and help the potential client make the right decision for them...not just take their money and run.
We are Realtors first...with ethics, morals and responsibilities to our clients and profession. Can these programs co-exist...some say no...others say hell no! But the truth is both are here to stay...so understand it. Don't think twisting the facts in one direction or the other will make a difference. The truth is for some people that make the decision with their eyes wide open and have the expertise to handle the process For Sale By Owner can work. Yet the majority of sellers are not in that position and do not want to deal with or take the liability selling on their own requires.
We want sellers to sell that is the bottom line. We want buyers to fine the right home at the right price. We know that a home is only worth what a buyer is willing to pay for it!