FSBO: “For Sale By Owner”; The Words All Realtors Hate

FSBO

“For Sale By Owner”: The words all Realtors hate.

 

The bottom line is this: In almost ALL cases, sellers are better off using a Listing Agent, but in today’s World, those agents clinging to their “real value” to justify 6% commissions are rapidly becoming obsolete

 

Background

For those of us not living under a rock the past few years, the real estate sales world is buzzing with change. From on-line searches to talk of transactions eventually becoming on-line to more owners trying to “go it alone”, the cozy days when Realtors could confidently charge a standard 6% are over. However, the results of owners trying to “go it alone” have been spotty at best; data shows they are clearly better served by listing with a good real estate professional.

 

Why the rapid change in attitude among some sellers?

The most common and obvious reason is cost. But there is more to the story.

 

The emergence of exceptional on-line sites like Zillow have given potential buyers more access to quality information and neighborhoods than ever thought imaginable. And most of it is on mobile, easily searched and found. Sellers are obviously aware of this and many wonder why they pay 6% for Realtor services that do not seem to have improved over the years. Good question.

 

FSBOs Sell for 5.5% less than comparable listings

Nationwide, FSBOs sell for 5.5% less than comparable properties sold through the MLS, according to Collateral Analytics. This should not be surprising, and seems to make using a Realtor versus not “a wash.” But it is not.

 

The Immense Work, the immense risk, the increased time for you to sell; is it worth it?

Historically, FSBOs have a low probability of selling and create enormous stress for the seller. Consider the following:

  • An excellent agent is a marketing and promotion genius. Such agents are rare, but out there. Isn’t it better to turn over promotion of your home to him?
  • FSBO listings, even in today’s world, do not have the same breadth of distribution through broker networks as that of a home listed with an agent.
  • With the many changing legal issues, especially regarding disclosure, do you really want that responsibility? The “screw up” possibility is higher than you think. Agents have deep levels of support after-the-sale to assure there are no legal “loose ends” that can come back to bite you.
  • Agents understand the entire process, from sales to administration. I do provide this caveat: no two agents are alike and the quality difference from best-to-worst is far greater than you can imagine.
  • It is clear that agents are much more likely to sell the home quickly. Not only is “days on the market” a negative to your sale price, it is worse on your psyche, life style, and mind set if you have the responsibility to move your home yourself.
  • In today’s competitive market, excellent agents continue to study and work to stay on the “cutting edge” of things related to real estate sales; why would you not use such an exceptional professional?

 

All Agents are NOT Alike!!! Choose wisely!!!!

The changing dynamics of real estate sales has widened the comparative difference in skill levels among real estate agents. “Brand identity” of having a “big name” franchise means virtually nothing in today’s world. The individual agent is the key to your success, so choose that agent wisely.

 

One does not consider all doctors the same; nor all lawyers; nor all politicians (although sometimes we wonder). So why are many people so content to hire “my friend” (who may be a part time agent who does one deal a year) or a relative (“My niece just started at HoHum Realty, and we feel obligated to use her.”)? Such decisions can cost you money, time, and maybe even whether or not your home sells.

 

In today’s world you need a much better trained and intelligent agent, one who has multiple skill levels in marketing, financial savvy, negotiating skills, and that je-ne-sais-quoi that you feel will work well for you (instincts and awareness are two that come immediately to mind).

 

What I am Saying is not an Attempt to Justify the 6%

Have you had a presentation or conversation with any of the agents or firms that attempt to tell you about their “value proposition”? Why they, and they alone, are justified in charging 6%? If not, you have done little research.

 

The bottom line is this: much of what the “unique value” people try to tell you is neither unique, nor extraordinary value. I recently attended a Tom Ferry Summit for a week of intense training and information exchange with 6,000 of the best agents around the world (average income $484,000/year, I am told). I assure you the dynamics of what they do, in many cases, are far beyond anything I hear from agents or firms in our area. And so Tom Ferry’s advice is: do a lot of r & d: replace and duplicate. If someone in Washington state, for example, is killing it with strategies and tactics I don’t use now, I will use them!

 

The number of agents who study their craft in the above way is likely less than 1%. My suggestion: find them and interview them, and only them.

 

“But When is a Discount not a Discount? I refuse to pay 6%.”

I have good news for you here: you do not have to pay 6% to get the quality I define above. Great agents know that in today’s tech-enabled world, he can execute many more strategies at a much lower cost. The 6% is an arbitrary number with no basis in reality any longer. My fee for services is 4 ½%, including buyer and seller commissions.

 

As for pure “discounters,” forget them. Those advertising “1% listings” are lying: The 1% is their fee. You pay 3% for the Buyer Agent, so the total is 4% and you get little more than an inexperienced agent with an old sign on your lawn. Facts are facts.

 

Choose an agent who is responsive, and removes the burdens for you

Make the process as enjoyable as possible. Sell your home to a person who loves it and understands its value. This should not be too much to ask, am I right or am I right?

 

I hope that you consider me for an interview

I will not beg for listings or suggest you choose me based on a written piece. I welcome discussions with you to share thoughts and ideas. Then….you choose.

 

#FSBO  #ForSaleByOwner

 

Ray Wedell, Realtor

Chartered Financial Analyst, CFA

Samson Properties

703-855-7299

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