I have spent most of the last two years approaching FSBO sellers and offering creative listing programs to earn their business. Sellers inclined to sell their homes FSBO, are a distinct breed of do-it-yourselfers who reject the traditional real estate model. With some successes, I have also seen many fsbo sellers shoot themselves in the foot. Here are a few lessons from the FSBO lane:
One of the worst mistakes any seller can make is to seriously reduce the buyer’s agent commission.
- I met a seller in my complex this summer who only wanted to offer 1% to the buyer’s agent. The norm in my city is 2.5%. He ultimately listed with a different broker, offering 1%. His condo never sold after several months and he ultimately rented it out.
- Just this week, I spoke with a fsbo seller who was offering 1.25% commission to the buyer’s agent. Consider this - would you go to work for less than half your usual fee?
Next on the list of lessons is falling for free offers.
- One woman I spoke to went with an agent who said he’d list the house for free. All I know is that she cancelled the listing a month later.
- Another seller called me about a month ago sharing that a Realtor offered a free open listing if the agent could use the home to do open houses. Consider this – if a Realtor is working for free, how motivated do you think he or she is to sell YOUR home? How skilled do you think that Realtor is?
Listing your home as an agency listing
- In California, we have a listing category called an ‘agency’ listing. It stipulates that if the seller brings in their own buyer, they owe no commission to the listing agent. If however, an agent brings in a buyer (as is usually the case) then the seller owes the listing agent a commission.
- I have seen many fsbo sellers sign such a contract, sometimes mistakenly, thinking they were still selling ‘by owner.’
- If you are intending to actually sell without a listing agent, but want your California home on the MLS, your preferred listing choice should be an ‘open’ listing.
I see people successfully sell their own homes every day. Like anything else, however, there are things to be aware of and mistakes to avoid. If you have any additional questions about selling your own home, please give me a call at 619-379-8616.