experienced flippers, do you ever FSBO?

Question

I've had some success a couple times with selling myself.  I use a flat rate service that puts me on zillow, trulia, and the MLS for 250 bucks.  I pay an extra 50 for professional photos.   I like to be able to talk directly to buyers agents, have control over the description, and it saves money of course.  Now if I were doing multiple projects at a time, this would not be the highest and best use of my time.  But as someone starting out, It's hard for me to do everything I can to keep costs down, then turn around and fork over thousands of dollars to a listing agent.  I paid one once, and he just put it on the MLS.

But I had a conversation with an agent today and he said he absolutely will not show houses listed with a flat fee service of FSBO.  The flimsy excuse is that it is too much work.  It's no more work than otherwise.  I know my way around a contract and do my side of the lifting.  But I wonder, is this the norm in the business.  I also have noticed a widespread misconception that FSBOs are always overpriced.  I know the comps and neighborhood better than many realtors.  I can understand how mom and pop selling their house might price it wrong.  But it irks me when people suggest I'm overpriced, or that something is wrong with the house, or that I am being cheap, just because I do it myself.  As I see it, agents pound the pavement to get a listing--If I have one, without even having to get a license, why should I give it away.  But if I'm being shut out of the ol-boys club, then I guess I'll have to use one.

Bill Fennelly · Answer

The reasoning for some is that broker, myself included sometimes, often feel as though they are doing all the work for half the pay, also some feel as though they will need to hold your hand (or a FSBO) through the process since not everyone knows their way through a transaction.

I feel that it is shortsighted for some brokers, I will at least make the call to make sure I will be compensated if we can put something together...however, if you say no dice to my commission, and they are a very good client or family member, I will send them your way anyway, but that's just me...I know lots and lots of agents/brokers that wouldn't give you the time of day and would skip right over your property and never bring it to the attention of their client.

Plus, I also figure if I show your place a few times, and we build a tiny level of trust along the way, you may call me if or when you need a full time professional broker in your corner.

Just my opinion !

Greg H. · Answer

Account Closed

You are talking about using a flat fee broker that places the property in MLS and you agree to pay the selling agent 3% correct ?

There are several companies out there doing this and some are as low as $99.  I can't imagine being one but I have used them from time to time even though I am a Broker myself.   I personally have not notice any bias against them but I assume it it exists on some level

Being a Broker, I have several options

List with a local Realtor- I tend to do this in areas where the MLS is not big or 1 company tends to dominate the market.  Smaller towns tend to have this and I have found that I am able to obtain a higher price using this method. Full 6% with no referral fee

Join the local MLSI- some Boards are very proud of their MLS and change high initiation fees to join and some don't

Use a flat fee service such as Housepad or ValueMLS- $99-$299 for 6 months of MLS plus 3% to the selling agent and the traffic and agent calls are directed to you. Obviously, it helps to have a level of experience to handle the traffic

Diya Sharp · Answer

I have FSBO ed in the past on a  fixer and while it sold, it took some time and it was a pain. I now use a friend who is a Realtor who cuts me a deal (1.5% for 0 - 500K, or lower on properties with higher list price.) A lot of people have asked me...why waste the money paying a Realtor when you could easily get a license in Texas.  Well, I don't have the time to show the property but moreover, he is completely worth it because he is an expert in the area and the types of homes I rehab. He has been able to use his network to get me offers my properties before it has hit the MLS. A good Realtor is key to your success in selling properties in a timely fashion, and especially if you are investing on the side.

Mindy Jensen · Answer

Account Closed has a pretty good point to consider as well, that if you are cooperative with the FSBO, perhaps they will call you when they need your services.

I thought agents were legally required to show any house their client wanted to see, but I can't find documentation for that anywhere, so maybe I am wrong? I think you owe your client - especially those who are new to real estate - the duty to help them find the house that is right for them, whether it be traditional sale,

Suhendri U. · Answer

Account Closed

I am not experienced flipper but have a friend who is RE agent, he refused to work with a buyer who want to buy property from FSBO.

Crystal Smith · Answer

We're investors & also own a traditional brokerage firm.  The reason that agent won't show properties listed by a flat fee service of FSBO is simple- HE DOESN'T GET PAID unless the seller agrees to pay some kind of commission & more than likely his experience w/ FSBO is they aren't willing to do it.  Our firm will share a buyer w/ an FSBO if the seller agrees to a commission.  If the seller won't agree then we take the buyer some place else.

Account Closed · Answer

hmm.  The service I use has a standard listing agreement for six percent.   The only difference is at closing the three percent for the seller comes back to my column.   I can't imagine a fsbo not paying a buyers agent.   That would be selfish and underhanded.   But it is surprising how consistent the reaction is--by owner means overpriced.    Which is counterintuitive.   I actually have more room to move.

William Hochstedler · Answer

Think about where your potential buyers are.  Most buyers hire an agent to help them find properties and most agents don't do much but search the MLS.  So an MLS listing is key if you want to reach the most buyers.  Like @Greg  H. described, I also assume that your flat rate listing is offering a full buyer side commission.

I would add that if you are serious about this business, that you have a licensed agent somewhere near the core of your team.  Most flippers are agents themselves or have one in their inner circle.  Anything else is an unsustainable work around.

Any reason why you don't pursue a license?

Christopher Brainard · Answer

Unless you are voilating Fair Housing Laws (Descrimination based on: race, color, religion, sex, handicap, familial status, and national origin; blockbusting; steering), I don't see any legal obligation to show a property or obligation to do business with a potential client. NAR also includes sexual orientation and gender identity in their Fair Housing Policy, but that only applies to Realtors and is not a 'law'.

Jean Bolger · Answer

If I were a buyer and my agent didn't show me a FSBO because "it might be more work" I would consider that pretty serious dereliction of duty. In Colorado, I'm pretty sure the real estate commission would agree with me. It may possibly be different in other states, but I have trouble seeing how the laws of agency could be "flexed" that way. Of course, that's not to say a particular agent wouldn't do this.

experienced flippers, do you ever FSBO?

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