Selling FSBO as a realtor in another state

Selling FSBO as a realtor in another state

Member since 2021 · 10 posts · 3 votes

Hi everyone, I am a commercial real estate agent in New Jersey, however, I own a rental property in Delaware that I'm looking to sell in the near future, so not too far but not close enough where selling it myself would be convenient.

Here's context.

I own a rental about 2 hours away. It has appreciated big time due to current market, so selling it right now is the right move for me financially. I am not looking to do a 1031 unless something falls into my lap in the next month or two and am going to eat the taxes. 

Properties in my rental's market are selling within 24 hours, it's that hot. Assuming it stays this way for the next couple of months, this makes me think I would be able to sell it myself without too much of a headache. My plan would be to list it online for a week, plan all showings for the weekend, and then have a final decision made by Monday-ish. This is to minimize the amount of time i need to be down there, and minimize showings with tenants still there (don't worry about these details I have it figured out with them).

On the other hand, I already have a friend in this market who could sell it if I choose to go that route instead. He is a high performer and I know would do a good job.

When doing the math though, it will cost me over $14K to hire him at 5.5% commission, and, in addition to taxes, it adds up to be quite a lot. I'm not worried about negotiating .5% to 1% off the commission, I'm moreso thinking about the entire lump sum of about $14K (basically taking my profits from about 60K to 75K after taxes, which I find to be considerable bump).

Finally, even though I am commercial I have experience with residential, helping buyers and the occasional listing that is worth doing for one reason or another. So i wouldn't be going into this blind. I understand I wouldn't have access to the MLS but in this market and would be basically using Zillow or other sites to sell FSBO.

My questions are... is it worth selling it on my own? 

Will working with a realtor and getting access to MLS drive my price higher? Will I avoid headaches by letting someone else handle it? Or, since this market is so hot, does it make sense to do it myself because I will have a bunch of offers anyways, assuming it all stays the same? Does it open me to liability?

What am I not thinking of? 

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Darren SagerPro Member
Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
5y

@Tyler Psenicska why can you list with another realtor and get a referral back on your own property? You can negotiate more than a standard referral fee if you're willing to do most of the heavy lifting. And it'll come across better to the public than a FSBO. Sure there's some hungry newer agent that would jump at it just to get all the possible buyer leads and the chance to get the buyer's side of the transaction too.

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  • Darren SagerPro Member
    Investor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    @Tyler Psenicska why can you list with another realtor and get a referral back on your own property? You can negotiate more than a standard referral fee if you're willing to do most of the heavy lifting. And it'll come across better to the public than a FSBO. Sure there's some hungry newer agent that would jump at it just to get all the possible buyer leads and the chance to get the buyer's side of the transaction too.

  • Member since 2021 · 10 posts · 3 votes
    5y

    @Darren Sager how would this work in practice? I refer myself as a seller lead to said realtor, and tell them I'll do basically all of the work other than listing it on MLS? How would you suggest dividing the labor to give us each a good deal

  • Real Estate Agent/Investor · Peoria, AZ · Member since 2016 · 2k+ posts · 2k+ votes
    5y

    @Tyler Psenicska

    You can also look at doing a flat-fee MLS listing so you still get maximum exposure on by being on the MLS. This way, you can save on commissions and still have as many eyes as possible see the property.

  • Real Estate Agent · San Francisco · Member since 2018 · 42 posts · 13 votes
    5y

    The 5.5% likely include the selling agents commission (buyers agent). I'm guessing that is 3% standard in Delaware. Even if you FSBO the property, you should offer full commission to the buyers agent or run the risk of agents not showing the property to their clients. If the property is an easy sell, your friend may be open to listing for 1-1.5% which is more than worth the headache and liability in my estimation.

  • Jonathan GreeneBusiness Member
    Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
    5y

    What @Darren Sager said. You are the referrer of your own property, yes. Allow the best agent to do it and take 25% back. They are going to do all the work to get a higher price and get more people in the door. Are things selling FSBO now? Sure. Does it seem incongruent to be an agent and want to FSBO your own property instead of let a pro do it? Sure. You are being your worst nightmare client right now. You need to pay out 2.5 on the buyer's side of FSBO anyway so you get agents showing it so what's the big deal if you've made so much to pay a colleague to do the best job for you?

  • Member since 2021 · 10 posts · 3 votes
    5y

    @Jonathan Greene Thanks Jon this is helpful perspective - I agree with what you're saying and it has helped me make a decision

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