Do I need a real estate agent?

Question

Patrice Boenzi · Answer

Gulliver R. Here is my two cents - first off, I am a Realtor in Illinois and here is what I have seen.  My mom sold her home by FSBO in a hot market in the right area many, many years ago before the internet. However, recently she tried again and found that most people came in and took the Realtor's fees off the asking price and was getting low-balled. I have seen many people try, but most people end up with a Realtor because of the experience, networking and MLS. Most sellers are too attached to their home, can't take the "negative" feedback and really don't know how to show it because it can be uncomfortable to look at a home with an owner. First time home buyers usually want to use a Realtor. In Illinois, buyers and sellers need an attorney anyways.

So a few questions:

How will you market your home? What costs are involved i.e. professional photographer that specializes in homes, flyers, yard sign, advertisement.

How available are you to show your home?

How good are you at negotiating?

Can you stage your home?

Here is a tip - at least here - a staged home that is lived in sells faster and for more money!

Bottom line - you can always try, but as you are trying start interviewing Realtors and have one picked out on stand-by in case you need them.

Good luck!

Russell Brazil · Answer

Chris I feel the same way when I am working with a buyer purchasing a FSBO. I show the seller an inspection report and get an insane amount of money off the asking price because the seller thinks there house has so many problems, without an agent to tell them that they are all common problems that every house has. I use the leverage that they are going to need to disclose all these things to the next buyer and tell them no one else in their right mind would buy a house with all these issues.

Chris Mason · Answer

Gulliver R.,

FSBOs are just marks to take advantage of.

Because I'm always and only on buyers' side of transactions and never represent sellers, I LOVE FSBOs.

We're either going to take advantage of them (I owe no fiduciary or other responsibility but to my buyer who I am duty-bound to take advantage of a FSBO for, I don't even have to sign the dual rep disclosure thing that agents have to sign!), or it's a waste of time and let's find another home.

There's rarely anything in between.

Heather DeGeorge · Answer

Patrice Boenzi Lawyers are NOT required by either side in IL except maybe in commercial property. But definitely not for a residential property.

That being said, I would never do a transaction without one.

Also, keep in mind that a lot of the buyer aversion in FSBO is that they are horribly uncomfortable looking at your home with you right there or even just outside.  So they will never feel like they REALLY SAW your house and all the things that might tip them off to problems--and that underlying worry is what will keep them from making a deal.

But yeah--they will also try to chop off realtor fees even if you've already done that.

Doug P. · Answer

That's a huge misconception. The average FSBO home sells for less than the average MLS home. This is because high end homes take longer to sell and are much less likely to be FSBO (the owner's value time more than the money they might save).

So while the average MLS sale is higher than the average FSBO sale. Sale prices of identical homes are the same. The only variable is the commission and who gets that depends on whether the seller or buyer is a better negotiator.

Chris T. · Answer

Gulliver R.

There is a 3rd route. Find a flat list MLS realtor brokerage. If you google it, you should be able to find 1 in your area.

I used 1 to list my house for rent (saved 1/2 of the 1 month's rent) and also to sell 1 of my house. Saved almost $2000. I just had to negotiate / schedule showings with buyer's realtor.

If the realtor is able to add value to market your property to get a premium price (aka add value), I wouldn't mind paying 5-6% to the realtors. My biggest issue is, so far I have not seen the value being added - besides just listing on the mls. Which I can easily do it myself using the flat fee service.

If there is a realtor who consistently brings me deals, then yes, I would be happy to buy and sell with that realtor. Haven't quite found 1 yet....

Brandon L. · Answer

Gulliver R. there are a lot of studies that you can google that show FSBO typically sell for much less than what an agent would be able to sell it for.

homeowners sell FSBO to save money but typically lose more, but that may not always be the case you could be the most awesome sales guy ever :)

Jorge Zea · Answer

@Doug Pretorius is exactly correct.

It is a Realtor training phrase: "The average FSBO home sells for less than the average MLS home". This is just inaccurate because of what is pointed out. Experienced seller should be OK with a Flat Fee listing and will save a lot of money. The system is not for everyone as @Russell Brazil states. some inexperienced seller will need a listing agent to guide them. Nevertheless the BPO Pro members should have the experience to go Flat Fee rout.

Commissions kill the cash on cash of the investment. And if there is financial leverage, it is even worst. Remember that commission are calculated from the sale price while they are paid from the owner's equity. Do some numbers and you will see the effect of a 3% commission on a leveraged property. the impact on Cash on Cash is exponential depending on leverage.

Flat Fee listing all the way. use a good reputable local broker (no referral services as most out there). No your homework.

Do I need a real estate agent?

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