The Reality of FSBOs and REALTORS®

Industry Observer
Is it wrong for homeowners to ask a Realtor for a CMA if they intend to sell the house themselves? That question was raised on the Future of Real Estate Marketing blog recently. For Sale By Owner (FSBO) listings are always a hot topic, and there were some predictable answers in the comments.  

One obvious response is, "No, it's not fair to lead the Realtor on." Or maybe, "Well, the owners do need to find out what the house is worth, but they shouldn't pretend that they will sign with agent if they don't mean it."

As a real estate professional who makes my living listing and selling homes, you might expect that I would agree. I don't.

My experience shows that, first, you do not get every listing you go after. Maybe the prospective client intends to pursue the FSBO route. It could just as well be that they like another agent better, or can negotiate what they think is a better deal from that other agent. They might not decide to sell at all. As an agent, you can get upset about losing a listing, or you can close that file and move on to the next opportunity.

Second, we are not the only professionals who give free advice as part of our every day business. Brokers often give information on stocks they never sell. People test drive cars but buy from another dealer. It is by doing exactly that – giving advice and the benefit of our experience – that we can turn a FSBO into a client. Spend one-on-one time with homeowners, give them honest answers and valuable information, and you'll find that some doors will open. When you explain all that's involved in selling from listing to settlement, and make it clear that what you do can put more money in their pocket, they may see the value and choose to list with you.

Even if the homeowner decides on the do-it-yourself route, that's not the end. I have had people come back to list with me after being unsuccessful in selling by themselves, because I helped them earlier. FSBO's believe they can save money doing it themselves, and sometimes that is true. But most of the time, they find out that buyers expect to get the benefit of the savings, and so make low-ball offers even when the house is priced correctly. It also can take longer for an owner to sell on their own, and the longer the house is on the market, the greater the perception it is overpriced. After some time of frustration, many owners are ready to hear that sellers who use REALTORS® generally end up doing better, even after deducting the commission, than those who go it alone.

Shake Hands

Like anything else in life, it all comes down to how you treat people. If you go into a listing appointment with the attitude that the homeowner is going to take advantage of you or get something for nothing, then you probably won't do well. But if you approach every meeting with a "what can I do to help this person" attitude, people recognize and appreciate what you do. When they are ready to list, chances are you are the one they will call.

Comments (2)

Bryant Tutas
Tutas Towne Realty, Inc and Garden Views Realty, LLC - Winter Garden, FL
Selling Florida one home at a time
Christoph, I'm with you. It takes me about 15 minutes to do a CMA and I give them out freely to anyone that ask. I want to be the go to guy in my market and this is one way to help.
Mar 23, 2007 11:24 AM
Stephen Luckett
ExecuHome Realty-LuckNet Real Estate Group - Dundalk Sparrows Point, MD

I have done several CMA for FSBO-knowing full well that is what it was for. I have found a few things:

1) They appreciate it and if it doesn't sell in a short time they call me to list

2) They appreciate the fact that I did not "pressure" them into listing and have offered to pay me for my time.

3) We worked out an agreement that if I bring them a buyer-they will gladly pay me x%. I found 2 buyers last year for fsbo within a few days and was paid nicely for it! no marketing, no driving, no hassles!


Mar 24, 2007 01:14 PM