All Forum Posts by: Earl W.

This is an old post that has been revised. I have purchased and sold multiple properties since this post. I've sold 10 properties in the last year and in that 12 months I have used FSBO, a Realtor and multiple different flat fee listings to sell. I'll share my experiences:

1.) IMO, FSBO websites are a waste of money. You could just list on Zillow, Marketplace, ETC or flat fee it and save yourself the $3,000+ that most companies want. Kind of hard to believe you spend that money and still don't get the MLS listing. Some FSBO companies will sell their $3,000+ package and then upsell you a MLS listing for $999 plus .5%. This can become more expensive than flat fee or using a Realtor.

2.) Realtors definitely serve a purpose. They are great if you need help navigating the selling process or if you just don't want the headache of dealing with showings, etc.

3.) Flat Fee listing services are great considering you can pay a small fee and have your property added to the MLS but be warned not all Flat Fee agents are created equal. All flat fee agents will add your listing to the MLS, but some of them will not give out your contact information unless you pay extra. Buyer's agents then call the companies phone number to schedule a showing which can be a huge problem because some of these companies can be slow to get ahold of you. This makes it hard to sell a house when the buyer's agent can't get an answer from you. Avoid listwithfreedom.com at all cost. I could make a 3 page report on the reasons why, but that is a totally different listing. Some Flat Fee companies want to charge extra for the showing time app which makes it easy to schedule showings.

If Jeff Hagel with BEX Realty is licensed in your state, I would go with him. (You can google his name) He charges like $199 or $299 up front and absolutely no other fees at closing. No add-ons. Showing time is free, your number is added to the listing, etc. By law he has to provide a minimum service which means he is the one writing up the docusign documents, signing as your agent, etc. In reality you are in charge of the listing. Once you and the buyer's agent agree on terms, the buyer's agent will write a contract and send it to Jeff's email, which he then signs and forwards to you. You are responsible for making sure your attorney, the seller's agent, abstractor and anyone else is doing what they are supposed to be doing. You might also need to shoot a quick text or e-mail once in a great while just to make sure things are being done as they are supposed too. 

In closing, if you know the sales process then flat fee listings are great. If you are new to selling properties, then maybe use a Realtor for your first couple. If you do use flat fee, follow this one rule:  If you don't have a direct line to a live person, then steer clear of that company at all costs. You can pay any commission to the buyer's agent that you want, but anything under 2.4% can be considered insulting to some. 

I would approach the Realtor like this. (You have nothing to lose.)

I'm at $96,000, your clients $99,000 offer gives me $95,000. Let's not let this deal fall apart for a measly $1,000. In the spirit of making this deal happen, I'm willing to budge if all other parties are also willing to budge. I accepted a 3% fee thinking I was going to get a better offer, but that obviously didn't happen.

So, here's my proposal: I'll go down $350 if the buyer will go up $350 and you take 2.75% instead of 3%. I think this is fair for all parties as all of us are meeting in the middle. At this point the Realtor will either accept or just tell their client that you're only willing to go up another $350 and they need to come down $650 to make it happen. Either way, you showed that you were willing to budge and left it up to them.

Thanks for all the information. I am familiar with buying/selling FSBO and have contracts, Seller's disclosures forms, etc. I've decided that the flat fee MLS listing with no additional services is what I need.

When you say 2% to 3%, how do you decide what number to list on the MLS? I've heard that 2.5% is the industry standard, but I don't want any Realtor to steer their clients elsewhere due to the commission being too low. If I'm going to get more activity at 2.75% then I would be willing to pay an extra few hundred in commissions.

I have a few single family homes I'm planning to sell as they become vacant. These properties were rentals that have been fully renovated to meet/exceed the quality of the neighborhood. They are definitely nicer than 95% of the homes you see on the average MLS listing at these price points. I posted one of these properties on FB and Zillow welcoming Buyer's with agents. What I've found is that most Realtors don't like to work with FSBO sellers due to negative experiences dealing directly with sellers. I can understand how working with the public can at times be frustrating. Since I know most Realtors prefer MLS listings, I've considered adding my property to the MLS. I've done some research online and found that there are numerous Flat Fee listing companies that will list a FSBO MLS listing.

Few questions I have are.

1.) Are all Flat fee MLS listing companies created equal? I see that some allow just a flat fee between $99-$299 while others charge a flat fee plus a small % of the sales price. (Any company that charges anything other than a flat fee is automatically crossed off the list). I was looking at brokerdirectmls.com because they only charge $149 for 10 pictures plus the listing, then I noticed in the small print that they also charge a small % of commission on the sale. Then I found getonmlsnow.com that lists for $179 and it appears that they charge no other commission.

2.) I've considered throwing 2.5% commission on the buyer's side. I feel like 2.5% is fair but don't want to ruffle any feathers over a few hundred dollars. Is 2.5% fair on the MLS or would 2.75%-3% be more along market norms?

3.) Anything else I should know about flat fee listing services?

Marcia and colleen, that's exactly the discussion I had with them, nearly to the T.  Im not goby to allow any replacements at this point. It opens things up for negotiations. The lease is the lease case closed.

The tenant demanded that she be allowed use of the common areas which to me falls under the quiet and peaceful enjoyment clause. Thanks for defining the term for me.

I've told them that this is their problem and that's where I'm going to leave it

Awesome!!! Not my problem.  That's what I like to hear!!!

I pretty much second everything Jeffrey said.  

I need a retirement and my current 401K is a joke of a retirement.

I enjoyed spending money camping in my new truck/camper and going racing on the weekends. I feel your pain, all I seem to do is work on houses every weekend, deal with finding tenants, etc.  I'm looking at the long term goal.  I'll have financial freedom if I just continue for a few more years.

Long story short: I rented to three qualified but young tenants.  A boyfriend/girlfriend couple and the girlfriend's cousin. For whatever reason they had a falling out. I've been getting texts from both sides complaining about the other side. This is what I've done so far.

Two bedrooms, three tenants.  One couple and one single girl. Tenant A (The couple) has asked Tenant B (The single girl) to leave and find a new place. Tenant B feels as if she's being forced out of the common areas and "pushed out of the house".  Tenant B wants to stay and demands to have access to all of the common areas including to the furniture in the common areas.  I tell tenant A that Tenant B has rights to the common areas.  Tenant A proceeds to tell me that Tenant B is MORE than welcome to use the common area as long as she doesn't touch any of her stuff....BTW the couch, Remote, TV, all decorations, etc all belong to tenant A... Tenant B asks me how she's supposed to be allowed in the living room when she's not allowed to sit on the furniture or use the TV.

My questions are as follows:  (I live in Iowa)

1.) I feel like it doesn't matter who's TV/couch/dining room table is in the common area, as long as it's in a common area all tenants should have EQUAL rights to said furniture.  If Tenant A doesn't want Tenant B to use her couch/TV then she should move it to her bedroom. That's just my opinion.

Anyways, are there any legal guidelines or links that deal with this matter that I can send to my tenants for review?

2.) When does this legally even become my problem?  I don't want Tenant B to feel like she's being pushed into her bedroom, but is it even my issue if she feels like she's being "harassed" by the other tenants.   NOTE: I did not rent "rooms" to each tenant.  I rented to the house to them together.

Andrew,

You're absolutely right.  Problem is, I've lost multiple deals by holding out over a few thousand dollars, I guess it's a case of thinking "If I don't act now, it'll be gone". 

Maybe as time goes on and they continue to get letters they'll reconsider.

James, Home Runs are great. At this point I'm thinking a base hit would be better than striking out.  Here's the details from one of the deals I'm letting get away.

$95,000 Assessed value $85,000-$90,000 Value after repairs, IMO $25,000 Everything else. Probably closer to $20,000, I added in a little for worse case.

I knew right off the bat the sellers wouldn't take anything close to the70% rule, so I skipped right past it and went for 10% profit.  I figured If I sold it tomorrow:

$79,050 Sell price after realtor's fee. $85,000-7% realtor's commission=$79,050 worse case

$54,050 Break even using worse case.  $79,050-$25,000 in expenses=$54,050 Break even

My first offer was $48,000.  $48,000+25,000 in expenses my all-in would be $73,000. $73,000+10%=$80,300

The seller replied that $48,000 wouldn't cut it because in their mind the house is worth $90,000 fixed up and it would only take $15,000 to get it there.  So I offered $50,000.  The seller responded back that $50,000 wouldn't cut it. House has been vacant for 6 months, bank is getting ready to foreclose and I'm their only offer.  The bank wants to do a short sale, seller wants to get the bank as much as possible because the bank is a not for profit that helps lower income families and the bank helped them get the loan.

My question: I'm very tempted to give a "best and final" offer of $53,000.  In all honesty, the house would probably sell for closer to $90,000 and my all-in costs will probably be closer to $20,000.

So $90,000*.93 Realtor's Fees=$83,700-$20,000=$63,700.. More than likely at $53,000 I would still make $10,000 profit without doing any of the work.. But this doesn't factor in worse case scenarios.. Still a pretty good deal, but according to the big dogs this deal sucks.

My last part is this... If I'm hanging onto it as a rental and paid worse case $78,000 ($53,000+$25,000) for it that's still a pretty good deal and still 7% cheaper than buying anything on the MLS. Of course if I sold it, it would be a wash after paying the Commission, but since I'm keeping it as a rental a 7% discount isn't bad? At $53,000+20,000 I would be getting closer to a 15% discount compared to the MLS. If the house actually sold for $90,000 and I had $73,000 into it I would be getting close to a 19-20% discount off of the MLS. Not bad IMO, but it doesn't meet any of the "rules".

Thoughts?  Would you pass on this house?