Is FSBO the way to go?

By
Real Estate Agent with Century 21 Results Realty

Maybe.  Maybe not. Pat B pulling a bead

Let me draw a parallel.  

I often hear from sellers that are choosing to go unrepresented that they can do just as good of a job as an agent.  After all, it isn't that hard... and they can save a LOT of money.  Right?

Maybe.  Maybe not.

Since many of my readers are car people, I'll put it on those terms. 

Anyone can run up to Home Depot and pick up a nice little 110v Lincoln Welder.  Walking out of the store about $500 lighter with the welder, helmet, wire, gloves, grinder, and assorted consumables and other stuff seem a lot cheaper than paying someone to weld a bunch of things... like frame cracks.  And the little Lincoln will do it.  

A few minutes on Google and one will probably run across MillerWelds and their incredible forums.  Ask any question, and users that are VERY good will give answers... and honestly, just about any question one could ask already has been answered there.  All of the information needed to use one of these things effectively is right there.  Free.  

Or, one can call up the local tech center and take a class.  Over a few weeks, an instructor will provide instruction and guidance.  Critique welds to make sure they look good and seem functional.  40 or 50 hours and one has a pretty good grasp of it.  

But are you ready to weld up the cracks on the frame of the car your kids ride in?  

Maybe.  Maybe not.  

Why pay $300 for a top notch brake job on your car... the parts are $75 at the local parts supply house.  The tools are cheap.  One brake job pays for the tools.  Even the shop manual that walks one through the job.  

Curtis's broken control armIs that enough to skip the trip to the shop and do it at home?  

Maybe.  Maybe not.  

Honestly, I weld, and I am building a frame for my Jeepster.  I started with rectangular tubing, and I will end with a frame... and there is a lot of other welding that will go into that project before it is done.  I also do most of my own other work, including brakes.  I have done it for years... 26 years now... and I am comfortable doing it.  

But I don't change my own oil... different issue.  Not worth my time.  In effect, I pay a few dollars for someone else to have the headache, and I can more than make up for the money I spend by working during that time. 

For some people, selling their own home makes sense.  For others, it doesn't.  But, like learning to weld, or doing mechanical work, or many other tasks... finding info on how to do it is easy, but being able to do it isn't as easy.  

Here are a couple of statistics:

  • 14% of homes sell without an agent.
  • 70% of those homes that sell without an agent are sold to someone the seller knew, like family or a friend or co-worker. 
  • That means that less than 5% of people that sell unrepresented (FSBO) sell their home by advertising it. 

And here is a final thought.  the people that look for FSBO homes to buy generally do so for one of a few reasons:

  • They want to save the same commission the seller is trying to save.
  • They think they can negotiate better than an unrepresented seller and can take advantage of them.
  • They have a challenge that doesn't allow them to use conventional financing, and an agent doesn't want to spend countless hours looking for a desperate seller willing to carry a note (mortgage) on their property... knowing that most seller's agents won't recommend that path since there are a lot of risks. 

Can you do better selling your home without an agent?

Maybe.  Maybe not.   

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Rainmaker
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Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

If we could only get FSBO's to read. Maybe they would finally understand. But in my part of the world, they are not usually car people. Car people are very logical, and they already know it's a bad idea to try to do something that experts are having trouble with.  Would you weld on a $200,000 Ferrari, I'm not that brave. But people take that chance with a home all the time.

Good post.

Apr 30, 2008 03:11 PM #1
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy
Larry - There are a lot of people that will do just fine on their own.  And some that won't.  We should try to help all of them to the extent we can... and car people like to do it themselves... until they reach a point.
May 01, 2008 02:40 AM #2
Rainer
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Bart Whitmore
Keller Williams- Louisville - Louisville, KY
Real Estate Agent
You make some good points, some will do good on thier own, for the rest We can be there to help
May 01, 2008 12:57 PM #3
Rainer
29,759
Stephen D White, E-Pro, ABR Cape Cod Real Estate
SDW Realty of Cape Cod - Falmouth, MA

         Lane you make some good points. There are a lot of self motivated intelligent people who Im sure can sell their home themself if they had the experience, intelligence and knowledge that the majority of agents do. But they dont and thats why the majority of them are going to hire a pro when they sick and tired of holding open houses that no one comes to, or paying for advertising in the local rag that no one answers. I have a posting on my blog http://www.activerain.com/blogs/sdw1 concering FSBO's

 

Cape Cod Realtor sdw1

May 01, 2008 01:35 PM #4
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy
Bart & Stephen - Thanks.  As agents, we need to understand the motivations of people that choose to sell without representation.  In some cases, knowing their motivations will help to figure out how we can help them, or if we should try to list them.  Even if we aren't listing their properties, having a good relationship opens up additional properties to our buyers. 
May 02, 2008 02:53 AM #5
Rainer
3,356
Chris Campbell
www.RealEstatePropertyForSaleGroup.com - International, IT

I think the comments to this good blog post sums up the situation pretty well.

With no disrespect intended, the first comment highlights the very reason why FSBO is gaining in popularity. There are numerous horror stories of realtor brokered deals going wrong, much as there are with FSBO. Introducing scare tactics to try and stop people exercising their choice and trying to understandably save money - is likely to only drive them further away.

I also feel the skill and professional direction a so-called expert will steer has been well and truly questioned since the recent financial fiasco where so-called experts have to a large part caused the problems we are in.

On a lighter note, my mother always told me to be aware of experts since an EX is a "has been" and a 'SPERT' is a drip under pressure!

The rest of the comments I believe highlight the way forward.

It's refreshing to see that Realtors are understanding and embracing the reason why people decide to go FSBO.

It is only through understanding that real solutions can be found - denigrating people who go that route by questioning whether they can read is hardly going to make them stay on the traditional path!

IMO cooperation is the key. Homeowners should have the option to list via hybrid systems that takes the best from all options and empowers the seller into thinking they are making a choice for themselves and being proactive in the process.

On our websites, we encourage Realtors to offer fixed fee or reduced commissions if the seller finds the buyer - and why not? - would you not split your commission if another realtor sent you a Buyer? If Realtors do the work and make the sale and find a buyer they get the commission, if the seller pays for ads in the hope of saving 3% and finds a buyer - everybody is happy and the house gets sold!!

 

May 10, 2009 12:48 AM #6
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Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Chris - Finding a buyer is a large part of what we do, but it isn't the only thing.  I have dealt with both sides of a transaction, and it is at least twice as much work.  And honestly, with some unrepresented sellers that have sold a couple of homes and read some things on the internet, it is WAY more work... they are kind of like the guy that "knows how to fix something" but does it terribly...  Some know a good bit, but others only are armed with enough information to be dangerous. 

I do believe in options though... 

And I guess your EX-SPERT thing up there was to say that real estate professionals aren't drips anymore?

May 10, 2009 12:42 PM #7
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