As we are moving and our homes have always sold within days of going on the the market we wanted to save the thousands in sellers commission fees and sell our house ourselves. But it seems like many of the flat fee websites are very sketchy and have lots of hidden fees. Has anyone used one themselves or have experience with "for sale by owner" for a home they would like to share?
Forums:
DISCLAIMER: Forum topics may not have been written or edited by The Key Play staff.
Comments
If you want to save some money I'd recommend Redfin.com if they serve your area. They list for a mere 1% fee and are consummate pros. If the Redfin listings around here are any example, they put together a good, detailed listing along with great photos.
In my personal opinion, you are distancing yourself from a large proportion of the buyers on the market if you go FSBO. When I was house shopping FSBO was a big red flag to me. I visited probably 75+ properties during my search and I didn't visit a single FSBO property. Don't understand why you would stop using a process that works (under contract quickly) in exchange for potentially burning a lot of time for a few grand.
While I cannot argue with your conclusions because as you say, it works for many, I have had a different experience. I have only sold three houses in my life, but I sold them without "benefit" of the use of realtors. Nothing against them, if you need them, they're good to have, but if you don't, why pay them? All of the houses I sold were sold to people by word of mouth. We owner financed all of the first one, and part of the second and third ones and were happy with the experiences. The buyers saved money, we got the houses sold, and in both cases, got a good return on our investment. Of course, we used an attorney to draw up the particulars, but didn't miss the presence of a realtor in either of the cases.
On the other hand, we used realtors to buy three of the four houses we've owned, bought the other word of mouth from a neighbor. Good result twice, paid too much in the other case, partially due to the actions and recommendations of a realtor. Won't go into details, and we still got a decent deal, but if there were no realtor, I'd have saved at least 10 grand, so I just don't think realtors are always necessary to the process. I know every person's search is different, but I wouldn't see any reason to avoid FSBO offerings for the sake of convention.
That said, never used an online FSBO site, and I know times are changing quickly, but with due diligence and inspection, there's no reason these things cannot be done to the benefit of all but the realtor if you have the time and financial flexibility.
Working in Industrial real estate, I can offer a few tips, but I can't say I would typically recommend it. A few questions first. How sure are you of the value of your house? If you have to err between selling for too little or holding for too long, which way do you want err? Selling occupied or empty? What improvements have you made to the home, and what do you want to do to get ready to sell? How comfortable are you having people knock on the door and ask to come in and look when you are not there, but your wife is? How available are you to show the house? How experienced in negotiating? Are you in a large neighborhood with other houses for sale, and if so are they selling? Are most houses near you selling to people from out of town, or to local pop,e moving up in size or neighborhood?
We did use an early form of sell it yourself service before working in real-estate. That was a waste of money. If you want to save half the real estate commission, put up a sign that says for sale by owner, shown by appointment only, brokers protected. Make sure other local brokers, especially those who have similar houses listed, know you will pay them same as any other broker (half of the typical local commission) if they sell it (Broker's protected). It won't be in the local MLS, but the brokers that work your area will still know about it and show it. Network - make sure people know you are moving and looking to sell, and willing to give a their friends a good deal. If someone wants to see the house, ask if they have a broker, and if they do not offer to give them the 1/2 commission discount. Have an open house whenever other people in the neighborhood do. Take turns walking through their houses as well, to see where you stack up, and tell other visitors there are you selling your house and looking to see how it compares. If any realtors call to see if you will list it, have them give a presentation, with pricing recommendations and improvement recommendations, and then ask them why you should list with them. If you have not sold by the time you have to move you will know who to go with.
If you do this, realize these brokers work for the buyer if the property is not listed with you, even thought you pay them. You are negotiating against them, they are negotiating for the buyer. They are trying to find a house their client will buy that they can get paid for, not sell your house. While they do not represent you, they can help with the paper work, etc, once terms are agreed to. If you are in an area where most buyers are already local and this is not their first home, you may not need to offer to pay a buyer's broker, but many out of town buyers and people who are not comfortable navigating on their own will not see your house if you do not make it obvious you will pay a buyer's broker. (price vs time selling)
Craigslist or Facebook
Didn't want to respond to just one person.
My wife is Magic. She comes into a home we/she has bought and turns it into a palace. Custom closets, custom bathrooms, upgrades to tiles and cabinets, storage etc. the longest one of the three properties we have sold was on the market was 4 days. We take our own photos and do our own staging. At this point I'm paying for access to MLS. So yes saving thousands of dollars might be worth it if I can find a good site to list with.
wait... I seen your house flipping reality television show: From Burnt to Turnt
right?
Thought this was an ad for a website being sold by owner, i.e. Amazon.com
I have sold two houses myself and had no problems. The two houses I sold using realtors, one was very well done. The other was always working hard for buyers who were giving her the tougher time. Realtors want to get a deal done and few thousand dollars one way or the other doesn't really make that big a difference to the bottom line.
The first thing I did was line up my lawyer and got a price to look over the buyer contract and final contract. This is the area where a good realtor will save you and if they don't, you have legal recourse. You can get played by a clever buyer if you aren't careful or don't have support in that area.
As far as the selling, I just used general ads and a sign. People that are interested in an area, drive around that area. I sold my house pretty quickly and got what I wanted in price. I did find another useful part of having a broker though, and that was people with their wanting me to finance, put zero down and other schemes they are learning on the internets. And realtors will approach you with buyers and offer you splits etc... That is up to you, but in Western Henrico, I really didn't need that help.
We used a flat fee service to sell our house in Richmond and it was simply a realtor who listed our house on MLS and that was it. Exposure to MLS had our house sold in 2 days and the flat fee service was just that - flat with nothing else. Just had to tell the guy when the deal closed and when to take down the listing.
my two cents: realtors are like wedding planners. Yes, you could technically do everything they do, but you're paying for convenience and their supposed experience to avoid pitfalls. A good realtor is worth the money if you have a busy life (both work, kids, etc). That said, if you rely too heavily on a realtor and she sucks at her job, then you're boned. I still get triggered whenever I see signs for the realtor that we used to buy our current house. Just in it for the commission and not our advocate in any way. Worst kind of realtor for first time buyers.
Speaking of realtors... We used one for the purchase of our current house, but I'm not really sure how well the experience went. Don't get me wrong, we love the house and all... But sometimes we see those HGTV shows where it appears the realtors really are helping out the buyers through the process, and it just wasn't the experience we had. Is it usual for a realtor to help you get a good idea on what they think a good price point for a house should be? Is it usual for a realtor to be able to notice things here and there that a buyer might not be able to see?
Our realtor really didn't do any of that. She would tell us if she thought the listed price was good, but wouldn't help us any more than that. After we bought, we've been noticing things pop up left and right that a good inspector should have caught (black mold in grout being hidden by caulk in the shower, for example). As first time homebuyers, we had NO idea what to expect or look for, and I'm just wondering what kind of experience others have had in this, wondering if we really did get a bit of a sub-par realtor?
A good realtor should recommend a home inspector that will find latent defects. Your realtor is not spending much more time in the house than you are, and lacks the proper equipment to test for many things that need to be checked. Knowing what a seller will accept for house and what a good price point is are different. They should know a good price point. If they cannot tell you what other houses in the area have sold for, and why they went for more or less, you may have the wrong realtor. Same for if they cannot tell you which neighborhoods are most popular or hold value best. A good realtor will often know builders to avoid, will always know proposed road projects, and can point out signs of workmanship quality when showing a home (square corners, cheap fixtures, nice counters on bad cabinets, quality tile work). When buying, if they ask you questions about what you like don't like, they are usually good. If they tell you what you should think they are usually not. This is actually the opposite for a listing broker. They should be telling you what you need to hear about the market and your house, not telling you what you want to hear to get the job. They should be able to offer pricing strategies, and reasoning for it, and discuss it with you to see how it works with what you want. If your wife will never forgive you if you let this house get away is a different strategy than if we only want this if there is enough money left to redo the kitchen, or I'd love this house if we could get it in our budget. Often knowing the listing broker can help, but only seeing houses listed with one firm is a huge red flag.
Agree with all of this. I'll add that you can't be afraid to switch realtors if you need to. We had to fire 2 different ones before finally finding one that we liked and worked his butt off for us.
I'll also add that it's impossible for any realtor and home inspector to find every issue with the house. I looked at that inspector to tell me about the big things (HVAC, roof, water heater) to know how old they are and if they are currently working well so that we knew if we need to "budget for replacement" or not. You, as the potential owner, need to have your eyes opened and look for things as well. Is there water damage on the ceiling or wood floors? Ask why. If you don't know a thing about what to look for, ask a parent/friend to come walk through the house with you and see what they notice.
At the end of the day I viewed my realtor as a consultant who was there to give me their professional advice so that we could make an informed decision.
I agree with this for the most part.
But my experience with inspectors is that they find obvious, open stuff, but you need to be paying attention yourself. I've learned enough from my current house that I'd be surprised if they found something I didn't. Inspectors are licensed, but they get paid to support sales, not get overly critical. That said, you can sue them if they don't find any defects that are critical and obvious.
I'm leery of using a home inspector recommended by a realtor. I use a guy I know who is a real ball-buster and will list everything no matter how small. I don't care about 99% of what he finds, but he saved me once on an item most would not have checked.
Just like most jobs, some are much better than others. I find that they do a much better job if you follow them around and ask questions, or at least ask what they will do before hiring them. Make sure they use that thing that checks moisture content in dry wall in ceilings under bathrooms and other places you suspect may have leaked, not just basements. Make sure they get on the roof and go into the crawl space and attic. They should be checking all water cut-off valves and electrical sockets. Check for levelness of floors, framing and counters. Get on a ladder to look at door corners to see if leveling cracks have been patched and painted over. Exterior wooden trim, especially under gutters, is a common area to miss rotted wood.
My brother is a General Contractor/Custom Home Builder and I had him come with my when I bought my first home. I would never buy a house without him. I trusted my inspector, but wanted a "real" opinion from a person who has to fix all the shit that goes wrong after you buy a house. I always recommend this if you know anyone in the construction field.
Things our realtor should have done:
-Been clear about what houses go for in our area. She didn't make a peep when we were looking to pay almost new house prices for a flip. No house in our neighborhood had sold or has sold for anywhere near the price per sq foot we paid. (yes, buyer beware, but we were doe eyed first time buyers so come on)
-Told us that we were moving with 2.5 kids into a house on a really busy street. I don't even think she was familiar enough with the area to know.
-Done some research on the house and told us what bad shape it had been in before the guy who flipped it did a bunch of skin deep renovations
-Told us about other areas that were equally convenient but had lower property values
What our realtor did right:
-Convinced us we were getting a better deal than we did
-Got her 3%
-Locked us into a house whose value just recently rose to what we paid for it (based on similar houses sold in our neighborhood).
Even so, I like our current realtor and think he's earning his commission even though we aren't quite in a place financially where we can move. He's narrowing down our list of needs and showing us houses that are great fits.
When I saw this thread, I thought it was Joe announcing he was putting TKP up for sale
You could always do what I have done when I have had to move. Never sell any. Rent them instead.
So we went with realtor because we couldn't find a non sketchy site to list it on MLS for us. Still not happy about losing all that money to them though.
If you hired a good realtor then you won't lose any money. If you only look at a realtor in terms of expense and discount all the value they can add to the process you'll always feel like you are "losing" money.
The old saying "if you think it's expensive to hire a professional, wait until you hire an amateur" has some wisdom to it.
As a professional engineer who has to fix other engineers screw ups, I can attest to that.
Yea 25,000 dollars to buyer and seller agents isn't saving me any money. Especially in today's world where everyone researches their own homes on be web and just gets the buyer agent to set up the appointment as does a little negotiationing. I wish realtors had to break down their cost and bill for it.
Edit: hell in South Carolina they don't even write up the contracts or closing documents a real estate lawyer does that and bills me separately.
You can negotiate what percentage you are willing to pay with a lot of agents.
Then again I have never had an agent negotiate for me. I make the offer for generally a lot less than he wants me to offer.
O the wonderful legislative body in SC full of attorneys and agents have dealt curtailed the flat fee and lower rate negotiation down here. There are so many requirements even if you walk up to a house and offer to buy it from them for cash. You still have to pay an "agency" 1 percent and a lawyer. Then with most agents working for larger agencies mean they don't have a lot of wiggle room.
Question: (I'm sure you've covered this already) why is Dirk Nowitski your avatar??
I'm just a big fan. I saw a preseason game in greensboro and when he walked into the gym he yelled "da circus is in town."
Realtors have been a mixed bag for us. We've had a couple of very nice realtors help us find a house. But we've also had 4 instances where the listing agent or prospective listing agent lowballed us on a list price. One of them harassed us (phone calls, even a letter) when we didn't pick her; we ultimately sold the house for $30K more...in a few hours (sign didn't even get put in the ground) than she wanted us to list it for. Had one agent for a seller try to renege on a sale. Fortunately I had their acceptance of our offer in writing.
In my experience, a good realtor is worth paying for, a bad one is not. Ultimately, it's YOUR negotiation, not theirs. Some people like negotiations, and some people prefer to let someone else negotiate their deal. If you know the value of your house, is the listing agent going to be able to negotiate a better deal than you? That said, if the buyer hires a good realtor, and you don't have one, it could cost you a bit. Hopefully not 3% of the value of your house, which is what you generally have to pay to a listing agent to do this negotiation and to know the process.
The six percent model is great for realtors, not so much for people doing real estate transactions. The biggest value some realtors bring to the transaction is the MLS listing. Three percent of your home's value is a lot to pay to have your listing included in the MLS.
Listing went up today and it's trash. The pictures are awful, there are misspelled words. Again why do realtors get 3 percent?
I would let him know about your displeasure and voice to him if it isn't corrected ASAP he can be dropped as an agent.
Already did that. Problem is it's on-market, we fire him we have to wait 15 days to resist it with a different agent plus pulling a home and resisting it days later is red flag.
The home will sell itself with a MLSS listing. Think positive thoughts. Agent inconsistencies don't mean there is anything wrong with the house. Best of luck to you. Like I said, I just rent my old houses. Someday I might have to sell.
Stay on them til they fix it. The agent only gets 1.5% (broker gets the other 1.5%), but still, they should care enough to get the MLS listing right.