Agents vs FSBO: The ULTIMATE Hypocrisy

Sheila....I get my statistics from the Wired Magazine Article I referenced in my blog post, which gets its statistics from a study by Steven D. Levitt, an economist at the University of Chicago.....didn't you read it?  As for my experience selling homes, I assure you I have plenty...please contact me directly if you would like to discuss it further.

Shane....I often hear Brokers & Agents refer to themselves with the same level of professional importance as Doctors, Lawyers, etc....and as my blog post states "...if we (as Real Estate Brokers & Agents) want to put ourselves in that same category of professional expertise, then we should be setting an example...", so please understand, I'm not making the analogy, I'm just repeating an analogy I've heard made many times.  Like yourself, I advise people to list their homes FSBO if they can, then if they need help or find they can't handle it, then I'm there to help as well.

Eric....EXACTLY, I think you are DEAD-ON when you say that Agents have many other advantages working for them when they sell their own home vs. a client's home.  Not the least of which is that the owner & the Agent are always on the same page when an Agent lists their own home for sale!  Not always the case when Agents sell a client's home, because the client may need to move quickly, may not be able to afford holding out for a higher offer, etc.  Thanks for the comment.

Rich...You are right that this information does not reflect any market we've seen in the past year or two...The Wired Magazine article was written in May, 2005, over 3 years ago, so its safe to assume this isn't the most current information available...but its still an interesting point.

Tony...Please read the Wired Magazine article that my blog posts references, it does a good job explaining why an Agent is often motivated to pressure a seller into accepting an offer that may not be the best.  As for attracting Agents to my social networking platform, I also work hard attracting consumers (Buyers, Sellers, Owners, Renters) to my networking platform, which will bring the Agents in no matter WHAT I say.  I try to balance my blogs between attracting professionals & as well as consumers, because HutHub is a Social Networking platform for Consumers & Professionals, not just one or the other.

Brian....Don't get me wrong, and everyone please note this: I ENCOURAGE HOMESELLERS TO TRY TO SELL THEIR HOMES FSBO, BECAUSE THAT IS WHAT I DO!  I own investment property where I live, but I also own investment property in other states.  I know the market for my own home better than anybody else, so I'll sell my own home as FSBO.  Now, I recently had to sell a duplex in New York, and I immediately sought an Agent because I did not confidently know that market as well as my own.  The point is this: tell your potential clients to do as you would.  If they aren't successful trying to sell their home FSBO, then make yourself available to help. 

As for Agents being like electricians, mechanics, roofers, framers, etc....I NEVER heard of an Agent comparing themselves to those unglamorous professions when speaking to a potential client....Agents are much more apt to place their services in the realm of doctors, lawyers, etc.  My point is, don't make the comparison if you aren't willing to follow through with the analogy.

Bill....You are absolutely right. 

Gail...Regarding your 1st penny: If that is true, then why did the study find that Agents keep their OWN homes on the market an average of 10 DAYS LONGER than comparable homes of their clients?  I'm not saying you are wrong, but if Agents are so much more adept at selling their homes, then why do they keep them on the market longer?

Regarding your 2nd penny: That is true, but doesn't that support the Wired Magazine article's conclusion that Agents spend more time & take more care selling their OWN homes than compared to homes sold on behalf of their clients?

Mike....You are right, but again, if what you say is true (and I certainly think it is), then why did the study mentioned in the article find that Agents keep their OWN homes on the market an average of 10 DAYS LONGER than comparable homes of their clients?

Tony....Whooooa, there Tony.  Let's play nice now....I understand that I'm blogging on a massive Real Estate Network comprised mostly of agents, no need to state the obvious.  And if you disagree with the article, that's fine, but how can you disagree with something that you obviously haven't even READ?

Read the article, and then come back & comment on it in an INFORMED fashion, rather than making a blanket refusal of facts / opinions that you don't even know about....I myself disagree with MANY portions of the article, but at least I know what I'm disagreeing with.

In regards to your remark about HutHub:  It is still in BETA, has only been live for 2 months, and in that short time has climbed over 2 MILLION SPOTS on Alexa.  Believe me, that feat was not accomplished without me knowing who my audience is.  Again, my blog is for professionals & consumers, so I try to present a view that spans BOTH sides of the field, without an obvious bias towards either.

By the way, I don't know if the creators of Activerain would like you pigeonholing their site as Professionals-only....isn't that why they created Localism?....to attract more consumers to read these blogs?

-Peter H.

Mark....I can't tell you how much I appreciate your response.  Its intelligent, well measured, well informed, and I appreciate the effort you obviously put into it.  I will try my best to respond in the same manner:

"A true FSBO is a seller who does not have the license, industry insight, access to the MLS, insurance, or negotiation skills that an experienced real estate agent can contribute.  Most FSBO properties that I see are over priced and poorly marketed."

You are absolutely right in naming all the qualities that a traditional FSBO lacks in comparison to a listing by a qualified Real Estate Agent, but there are also certain advantages that a traditional FSBO listing does have working for it.  Obviously the reduced commission costs, but also the MOTIVATION of the seller cannot be underestimated, which is what I think the true focal point of the article is:  Agents are less motivated to obtain the absolute HIGHEST offer for a client's home, but are more motivated to obtain the absolute HIGHEST offer for their own home, which can ultimately lead to a higher final sales price.

And to compound the problem, the typical rhetoric many homesellers have come to expect from us (ie. you don't possess the license, industry insight, access to the MLS, insurance, or negotiation skills that an experienced real estate agent can contribute) is constantly being eroded by the vast abundance of resources currently available to homesellers on the Internet (Zillow, Truila, Realtor.com, etc.).  To the point where a web-savy homeowner, with a college degree & a penchant for numbers, can easily perform an accurate CMA for their home, brush up on their negotiation skills with a quick Google search, and list their home on the MLS for FREE with a website such as: http://www.IggysHouse.com

It is my opinion, that in the face of all this technology that promises to "level the playing field" between Agent listings & FSBO, we as Agents need to focus on the importance of REPRESENTATION in and of itself.  We need to change the face of what we normally consider the valuable aspects of hiring an Agent, and focus on how REPRESENTATION, and REPRESENTATION alone, is the most important aspect of our service....and if you feel that you, as a homeowner, can do better on your own, then by all means we encourage you to try.

I would agree with your comment only if the agent selling their own home didn't know what they were doing. Otherwise, it doesn't make any sense to pay another agent a commission for a job that would probably be  performed better by the home owner real estate professional.

Here's the problem though: lets say that you are listing your own home and a client's home (or multiple clients' homes) at the same time, which are similar homes, maybe even in the same area, since you live in the community you farm, right?  AREN'T YOU COMPETING FOR THE SAME SELLERS?  Isn't that a conflict of interests?  What if there is an emergency situation at your own home & your client's home at the same time....WOULDN'T YOU ADDRESS THE ISSUE AT YOUR OWN HOME FIRST?  You obviously see the issue I am getting at: if you are representing yourself, as well as a pool of clients, you are naturally going to place more attention on your own listing than those of your clients'.

Which goes back to my point that we as Agents need to focus solely on the value of REPRESENTATION by itself, and be aware that this hypocrisy exists among ourselves, so that we can thoroughly address the issue with our potential clients.  If we set an example for our clients, by seeking another Agent for listing our own home, then aren't we highlighting the benefit of Agent representation IN AND OF ITSELF, and therefore showing our supreme dedication to our client's interests by maintaining a fair balance of attention to ALL our listings, even our own home?

After reading the article, there seems to be more interesting points you could have highlighted other than the same old tired debate of FSBO vs Professional representation.

Judging from the number of purely emotional reactions that I received from this blog post and the lack of solid reasoning contained within those comments (yours is not one of them, not by a longshot), I would say that this is anything BUT an "old tired debate of FSBO vs Professional representation".  On the contrary, I think I have hit a nerve that many Agents would prefer to ignore, but because of the current developments in the Real Estate industry that are now "leveling the playing field" between FSBO & Agent listings, this issue is of greater importance now more than ever.   As I've said, I think we as Agents need to shift our focus off the traditional selling points of Agent representation, which are shrinking fast, and focus more on the benefits of 'representation' in and of itself.....and we need to set an example for that new focus on 'representation', starting with our own homes.  Either that, or espouse the benefits of attempting to sell FSBO, and wait for the sellers to find out that its not quite as easy as they thought.

Would you like to take this blog article in that direction instead?

No, but you gave me a great idea for my next blog article! 

Thanks again, and best wishes for your success!

-Peter H.

Pam....Thanks for the response....I agree that the Wired Magazine article skips over MANY of the possibilities that may allow an Agent to sell their own home for a higher price than a comparable home on behalf of their clients, but the statistics also show that Agents keep their own home on the market 10 DAYS LONGER than an average listing for their clients. How can this be?

These statistics were gathered from a pool of 100,000 homes sold in Chicago, so while it does not perfectly represent the entire market, it does have SOME real world value.  Ultimately, numbers are numbers, and they can usually be used to make any point someone wants to make with them.  Personally, I don't think that these numbers work against Agents in any particular way, I just think they raise an interesting question that we as Agents have to come up with an intelligent answer for, rather than saying that its all just hogwash.  There is no doubt about it: the typical homeseller / homebuyer today is more intelligently informed than the they were just 10-20 years ago, so our responses to their concerns has to be equally well informed and intelligent.

Thanks again for commenting!

-Peter H.