To MLS or FSBO? That is the question.

[Kristin Kiddy]

I would love your input and personal experience.  I've decided to sell one of my rental properties.  I've made some improvements to it and it will show really well and with the market being so tight, I think it will go under contract pretty quickly as well.  I will see a very nice gain from the sale and I plan on exchanging it into a property in a different area, nearer to where I live personally.  One concern I have is finding a property that I can exchange into as there is not a lot of inventory.   

I am trying to decide whether I should list my rental property for sale on the MLS, right out of the gate, or start with a FSBO posting on Zillow. I am a Realtor, so I'm saving my commission either way, but I will still need to compensate my broker if I go the MLS route, plus I will have to compensate any selling agent who brings a buyer.

[Bruce Lynn]

So do you believe in your services?  Do you believe you add value to what you are selling?

Does your broker allow you to go around them?

Does your broker give you any free transactions?

If you do have to pay the broker something, can you not make it up with bigger exposure.

I think most realtors are not looking on Zillow to bring their clients and you know realtors in most areas are involved in 90pct or more of the transactions.

Does your E&O cover you if you sell yourself FSBO....probably not.

[Kristin Kiddy]

@Bruce Lynn I've spoken with my broker and he isn't offering any "free rides". I would have to pay him a small amount plus fees for E&O. But he said he would not need to collect anything if I sold FSBO. So I don't know about E&O being required if you sell FSBO. My services are the same either way. But what I am giving up is the added exposure that the MLS offers and perhaps a better selection of qualified buyers. However, I've seen several FSBOs locally that are real estate agent owned. On the other hand I've seen a few listings on our MLS that are also real estate agent owned. Just trying to get some personal experience anecdotes from everyone to see which way the majority lean towards.

[Nathan Gesner]

You would have to check state law and your agreement with the Broker. In my state, agents have to buy/sell through the Brokerage. You can't pretend to be a non-agent and list privately. E&O insurance only covers you if you are operating as an agent under your brokerage.

As an agent, don't you understand the value in MLS?

I allow my agents to buy/sell their personal residence once a year without any commission split. If they sell an investment that belongs to them personally, then I charge a nominal flat fee. You can try approaching your Broker and see if he'll negotiate something like that.

[Brandon Vukelich]

Yeah, not sure why you wouldn't list in the MLS immediately as every real estate website would pick it up in the IDX feed. So the whole world would have eyes on it. Not every buyer and their agent looks at Zillow.

Regarding doing a 1031, that's going to be a challenge with limited inventory.  It's tough but you could try and make a contingent offer on the replacement property, knowing that the relinquished property would most likely sell very quickly, assuming you price is competitively enough to sell.  Otherwise you sell and have 45 days from closing to identify your next property.  Not sure I'd want that pressure of making a hasty decision to purchase a less-than-decent property just to avoid cap gains.  Best wishes on your plans!

[Jonathan Minerick]

Since you are the owner, you should not need to list it through your brokerage. List it on the MLS using a flat fee MLS service ($100 - $200), which will be a savings over listing it through your broker.

You are not required to accept an offer from an agent over an offer from an unrepresented buyer. Use the flat fee MLS listing to get maximum exposure and then just accept the offer that nets you the most money once commissions are factored in.

As you are aware, most buyers (90%+) have agents and are not comfortable navigating the purchase without an agent. Due to that, you will often net more money by working with agents due to the increased number and quality of offers.

[Kristin Kiddy]

Thanks everyone. I had been leaning toward MLS, but my husband wanted to go the FSBO route. I feel better knowing that you all agree that it is the best way to go.

[Russell Brazil]

Originally posted by @Kristin Kiddy:

I would love your input and personal experience.  I've decided to sell one of my rental properties.  I've made some improvements to it and it will show really well and with the market being so tight, I think it will go under contract pretty quickly as well.  I will see a very nice gain from the sale and I plan on exchanging it into a property in a different area, nearer to where I live personally.  One concern I have is finding a property that I can exchange into as there is not a lot of inventory.   

I am trying to decide whether I should list my rental property for sale on the MLS, right out of the gate, or start with a FSBO posting on Zillow. I am a Realtor, so I'm saving my commission either way, but I will still need to compensate my broker if I go the MLS route, plus I will have to compensate any selling agent who brings a buyer.

 Im a top 1% real estate agent.  Let me give a perspective.  Often when I am preparing my own properties for sale, I will throw them on Zillow in sort of a coming soon type of situation. I just did this in fact with one of my rentals, that closed just this week. I had it on Zillow for about 6 or 7 weeks at $529k. I got a couple bites, and even a couple low ball offers.  When I finally had it ready for the market, and knowing how to time the market.....I went and did my normal full marketing plan as an agent, listed the property at $499k and sold it for $560k. 

[Kristin Kiddy]

@Russell Brazil Thank you, that was the kind of personal account I was looking for.  I will post with an update soon.

[Catherine Emert]

I feel strongly a broker selling FSBO says loud and clear "you don't need a broker"