Selling Home - Agent or FSBO

[GATORB8]

My wife and I are considering making a move out of state, and are looking at selling our home (NW Chicago Suburbs).

This is our first sale, it wasn't too hard to swallow the realtor commission on the buy since the seller foots the bill, but it has been hard for me to justify footing the bill for a 6ish% realtor commission on the sale, especially after our agent on the purchase side did little more than set up a recurring email from their MLS system (which didn't even find the house we bought) and spend a few hours looking at homes with us over the course of several weekends.

Has anyone had success in a For Sale By Owner situation that could recommend resources/lessons learned? Any worth in becoming an agent just for the sale?

[roastbeef]

i bought a rental a while back that was FSBO, and my realtor had to do extra work and make sure all of the necessary paperwork, forms, notices, etc., were there. the seller tried to either tried to sneak or unknowingly pass on some costs in the transaction to me, which we kicked back... unless you really know what you're doing, the buying person's agent is going to have to do extra work and you may have less exposure and willingness to even get offers. i had an ok experience, but my realtor had to go above and beyond.

[GATORB8]

Originally Posted by roastbeef

you may have less exposure and willingness to even get offers.

That is probably my biggest concern, although, from some light reading, it looks like there are online services that offer the ability to list on the MLS (with a buyers agent cut as a requirement for listing). I wonder if agents tend to steer their clients away from these specific listings.

In Illinois even the lawyers were able to get in on real estate transactions. From my previous experience, attorney review is actually mandatory here. That and the fact that I tend to be borderline obsessive regarding procedural accuracy keep me from being too concerned on the paperwork side of things.

[Thxrick]

You get what you "pay for". My wife is a RE Agent...so I m ay be biased but do it right or find out how you get screwed, your call...

[roastbeef]

Originally Posted by GATORB8

That is probably my biggest concern, although, from some light reading, it looks like there are online services that offer the ability to list on the MLS (with a buyers agent cut as a requirement for listing). I wonder if agents tend to steer their clients away from these specific listings.

In Illinois even the lawyers were able to get in on real estate transactions. From my previous experience, attorney review is actually mandatory here. That and the fact that I tend to be borderline obsessive regarding procedural accuracy keep me from being too concerned on the paperwork side of things.

to further elaborate, it is really going to depend on how wet you want to get your feet. are you interested in getting into real estate? prior experience as a loan officer or something?
when i became a landlord for the first time, there was a ton to learn, and it was all on the internet. there is tons of free knowledge for us to consume. do you feel like seeking it all out?
i'm a big fan of doing things myself. before we were experienced at something, we were new to something, right? this is just a headache i would do without. all the forms, disclosures, and notices are a lot to educate yourself about while working full time and keeping an eye on things as whole.
i'm not in real estate as my main gig, but i keep an eye on the market. i have never seen a fsbo listing i was impressed with (pictures, details, clarity). an important point to remember- a confused mind always says "no."

[bimmette]

I've sold and bought by myself, using a service to post it on the MLS system. I can't justify the huge commission to realtors especially nowadays with great apps and online ads to find homes. However, I also know how to declutter and take nice pics for an ad and I can show a home with people assuming I'm a realtor (I tell them i am the owner eventually). I recommend everyone do this to save thousands of dollars but I'm also the DIY type of person with an interest in real estate.

[Clark_Kent]

I would avoid FSBO unless you're well versed in RE transactions. If you're concerned with a heavy commission consider RedFin. I'm currently selling a home from out of state with RedFin and the experience has been great thus far. The agent is strong and I'm saving thousands on the commission vs. a traditional brokerage arrangement.

[Rik84]

Your biggest hurdle is going to be getting people in to look. Pretty much every buyer’s agent is going to scrub your listing as they won’t be getting their split on the purchase.

6% = 1/2 to buyer 1/2 to seller for most contracts. Unless another buyer with no agent finds you or someone with an agent finds you on their own and forces the hand of their agent you could be in a hard spot.

How active is your local market? Are the ame volume of units moving at this time of year as they were last year? Have prices increased? Buyer or sellers market?

I completely agree that agents are over compensated, they are an unfortunate requirement in many markets due to how entwined they are most of the time.

10-20 years in the future I honestly believe their role will be marginalized due to how easy it is for a buyer to find products and a seller to list.

Keep in mind, FSBO means you are handling all the showings, the no shows, the open houses. It isn’t a cake walk either.

I suck it up and use a realtor every time. I hate it, I bitch about it, then I cry about it, and move on.

[HFW003]

I know I’m in a totally different part of the world can’t imagine too many differences. We sold our last house ourselves, I too couldn’t come at the commission.

We are somewhat lucky as the market down here is very buoyant but ended up selling well over asking price without too many dramas.

The hardest part for us was the actual open days, thankfully my wife is really good at that sort of shit. I stayed out the front and greeted everyone whilst my wife stayed inside and answered questions.

Good luck!

[RickFLM4]

We have been considering a vacation home and as a buyer, and I almost always eliminate anything that is FSBO. My perception is that such homes will be overpriced by an owner emotional about or simply overvaluing the property and the transaction will not go as smoothly. I'm sure that is not always the case but for your purpose, I'd expect to lose the interest of at least a small portion of buyers as soon as buyers see FSBO.

All that being said, I am no fan of real estate agents. They are rarely knowledgeable enough about the properties they sell to answer questions and I agree their cost is high relative to effort required to sell a properly priced home. However, they know the process and I generally expect if a transaction goes through a realtor there is a reduced chance of drama or problems vs. FSBO.

[gatorfast]

Originally Posted by Rik84

Your biggest hurdle is going to be getting people in to look. Pretty much every buyer’s agent is going to scrub your listing as they won’t be getting their split on the purchase.

6% = 1/2 to buyer 1/2 to seller for most contracts. Unless another buyer with no agent finds you or someone with an agent finds you on their own and forces the hand of their agent you could be in a hard spot.

This is probably the biggest issue. What is the incentive for a buyers agent to bring a client if there is no commission promised? If you really want to go the DIY route, offering an incentive for someone who brings a buyer would probably be best.

But I wholeheartedly agree that realtor commissions are wayyyyyy too high. 6% is a ton of cash and like you said, for 95% of transactions its taking a few pics, slapping it on the MLS, then emailing/paperwork until close. Certainly not worth tens of thousands of dollars but unfortunately it seems to be the primary way its done.

[GATORB8]

Thanks everyone for the quality feedback.

Perhaps a discount brokerage like RedFin as Clark_Kent recommended may be the best compromise. It's probably unlikely I can sidestep the buyer's agents commission, so the listing agent is the real negotiable part.

Has anyone had success getting a local agent to match Redfin's pricing structure?

[TomD335xicoupe]

Sounds obvious but find an agency that is willing to work out a deal on the commission side that is favorable , especially if you are in a fast paced market. Try to cap the fee at a max amount you are willing to pay for the work they are willing to do. You will need to be a strong negotiator with them as they try to protect there position , in the worst case scenario at least you gain some negotiating skills from the experience but you most likely pick up some valuable tips from their offerings you could use if you go FSBO.
I was a realtor in NJ for a period of time in Hoboken. Big market, high priced space, lots of competition. If your market is strong there is little work for a realtor if the property is priced correctly. The most important thing to do is get your pricing correct, that is not saying to low ball for the sale more over be reasonably competitive to gain the advantage.

I was gonna ask who here has had experience with Redfin...as mentioned, unless you know a good agent already, chances are some rando's knowledge and experience will hardly be worth the higher commission.

[Mr Carrots]

We just sold our home and despite the realtors commission being outrageous, I'd suggest avoiding FSBO

1. The realtor mafia won't show their clients any homes that are FSBO unless you specifically request them to do so. Even with something like 70% of buyers now using zillow etc ,the realtors crew will try to sabotage FSBO

2. People are entitled and think that they deserve some amazing deal if a realtor isnt involved. Our neighbors wanted to buy the home before a realtor got involved and I suggested a very reasonable $860k for it, they told us they were thinking more along the lines of $750k. It sold after a month on the market for just under a mil, lol.

Get the realtors to drop their commission if you're dealing in those kind of numbers, 6% was fine in 1995 on a 200k house but absolutely insane in some of todays market. We also paid nothing for staging or photos, my wife did that herself and avoided paying thousands more to the Stealtors.

[Maynard]

Figure out what your time is worth per hour (your free time, which to me is worth more than my hourly wage). Guestimate how many hours of researching, photographing, and showing the house, then probably double that. Now compare THAT to the commission, rather than looking at it as lost money; will probably take a lot of the sting out of paying it. Unless you are in a fast sellers market, I'd pay for the realtor and move on with your new life, instead of getting mired in the old - as noted above, you'll often recoup the costs from the improved service and increased exposure.

[Clark_Kent]

Originally Posted by GATORB8

Thanks everyone for the quality feedback.

Perhaps a discount brokerage like RedFin as Clark_Kent recommended may be the best compromise. It's probably unlikely I can sidestep the buyer's agents commission, so the listing agent is the real negotiable part.

Has anyone had success getting a local agent to match Redfin's pricing structure?

I have had success getting a local agent to agree to a more favorable than traditional pricing structure on both sides of the transaction (buy and sell) with the understanding they would continue to represent my interests in a relatively large volume of transactions over a period of time. That was a unique situation but it doesn't hurt to try. If it's a surefire sale, a savvy agent would realize that x% of something is better than 100% of nothing. The challenge you can run into with this arrangement, and this goes back to the drawbacks of the FSBO, some agents will steer their clients clear of properties where the commissions are not favorable for them.

[GoHokiesGo]

Originally Posted by GATORB8

Thanks everyone for the quality feedback.

Perhaps a discount brokerage like RedFin as Clark_Kent recommended may be the best compromise. It's probably unlikely I can sidestep the buyer's agents commission, so the listing agent is the real negotiable part.

Has anyone had success getting a local agent to match Redfin's pricing structure?

My family has purchased 3 homes and sold 2 properties using a local RE agent that offers a discounted brokerage; they actually beat Redfin's rebate/discount (i-Agent in the DC area), and took off even more on our repeat transactions. You can do a lot of research on your own these days since it's not the same as it used to be, but they still give awesome service and will be our first call for the next Real Estate venture.

Originally Posted by RickFLM4

We have been considering a vacation home and as a buyer, and I almost always eliminate anything that is FSBO. My perception is that such homes will be overpriced by an owner emotional about or simply overvaluing the property and the transaction will not go as smoothly. I'm sure that is not always the case but for your purpose, I'd expect to lose the interest of at least a small portion of buyers as soon as buyers see FSBO.

I do the same thing - I'm definitely not a realtor even though I follow our market pretty close, and I usually eliminate FSBO listings as well. They aren't normally as well prepared or presented, and there's no real reason not to use a realtor as the buyer. As the seller, just chalk up that 4-6% as the cost of doing business.

[Habs11]

Originally Posted by Mr Carrots

We just sold our home and despite the realtors commission being outrageous, I'd suggest avoiding FSBO

1. The realtor mafia won't show their clients any homes that are FSBO unless you specifically request them to do so. Even with something like 70% of buyers now using zillow etc ,the realtors crew will try to sabotage FSBO

2. People are entitled and think that they deserve some amazing deal if a realtor isnt involved. Our neighbors wanted to buy the home before a realtor got involved and I suggested a very reasonable $860k for it, they told us they were thinking more along the lines of $750k. It sold after a month on the market for just under a mil, lol.

Get the realtors to drop their commission if you're dealing in those kind of numbers, 6% was fine in 1995 on a 200k house but absolutely insane in some of todays market. We also paid nothing for staging or photos, my wife did that herself and avoided paying thousands more to the Stealtors.

Then add: IF you FSBO you will get a crap ton of people that can not afford your home wasting your time. I did just that!!! When I was contact I told everyone to bring a pre-approval letter from their bank - they never did. They offers I received were garbage... huge waste of time. I did have a few prospective buyers with an agent come throught and I told the agents up front that I'd pay their commission, but that it would impact the negotiated price (i.e. bring me an offer for full list price and I'll pay you 3%).

[TheWatchGuy]

My neighbor just sold his house.

Had it listed FSBO for 6 months with no bites and barely any showings. Hired a realtor, and it sold within a couple weeks at the same price.

Fwiw, i would never buy a fsbo house. If they are going cheap on listing, who knows what else they went cheap on.

Just factor the realtor fees into your price.

[GATORB8]

Thanks everyone for the feedback.

I used Redfin and had an outstanding experience (other than a realtor friend of ours is now giving us the silent treatment). Saved $6k in standard realtor commission, got more services and marketing than any local realtors offered.

Four offers in six days. Redfin gets 1% and buyers agent gets 2.5%.

[overcoil]

Originally Posted by TheWatchGuy

My neighbor just sold his house.

Had it listed FSBO for 6 months with no bites and barely any showings. Hired a realtor, and it sold within a couple weeks at the same price.

Fwiw, i would never buy a fsbo house. If they are going cheap on listing, who knows what else they went cheap on.

Just factor the realtor fees into your price.

My experience no matter what the method used to sell no matter what the neighborhood people lie and try to move damaged property.