Do Realtors Conspire Against FSBO or Flat Fee MLS Sellers? (buyer's agent, commission)
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I have a long-standing debate going with several friends and co-workers and am hoping that everyone out there (especially realtors) will chime in with their opinions.
For those people who decide to list their house for sale by themselves and either use FSBO (for sale by owner) or pay a realtor a small fee (usually $200-$500) for just an MLS listing with no other services.....are those sellers avoided by realtors? Meaning, do realtors avoid showing those listings to buyers? Or, do they not care at all because they are still getting a good buyer agent fee (usually 2-3%)??
One side argues that realtors conspire together to force these alternative sellers to end up using the services of a realtor......or they will have a very hard time selling their house. Why would they do this? Realtors might be offended that people circumvent them and their training and experience.
The other side argues that realtors don't care or pay attention to it at all.
Now, with that said.....one final question....if a seller did decide to list the house themselves (but still use MLS) would it be appropriate to have an exclusive broker-only open house?
gina,,,i dont believe we conspire against fsbo's ive approached many fsbo's with potential buyers,,
but thier is a general attitude,,,of disrespect towards brokers, from fsbo's,,which is fine,,personally, but professionally,,it can be a deal breaker,,more often than not,,
to make an offer, i need property disclosures for the buyer,,the fsbo owners are usually, not very cooperative, or lie thru there teeth about material facts (leaky roof/water in basement, etc.....they get very defensive...
and just suppose, we make an offer on a fsbo,,,well,,,not knowing what most of the verbage means on the general purchase and sale real estate contracts,,they accuse, and ask 200 questions,,,and immediately get emotional,,with the phrase go f--- yourself,,being the predominently, fsbo phrase in these parts,,
now say my buyer needs to sell to buy and the purchase agreement has contingencies, in it,,,and also property inspections,,,these freak out many fsbo owners.
and if a fsbo isnt working with a lawyer,,,its even worse,,
the upside with working with fsbo's is that, they will either overprice thier property,,because they are testing the market,,,(really dont need to sell) or they actually do, undervalue thier property, so in an effort to "save" 5% comission,,,they may lose,,over 20 % value,,,
if i have buyers that are investors,,i send them to the fsbo's
the analogy i like with fsbo's is this,, it may be legal to do your own divorce,,,,while thinking you are saving 2-3k in lawyers fee's,,,,but if the other spouse gets a lawyer,,its not an even playing field,,,you are at a distinct disadvantage,,and could lose, over 20-50k, if not more(would you want to go to court,,with your spouse having a lawyer, knowing all the laws and loopholes,,and you do not?)
now,,ive seen a handful, of people that will take the time to study most of real estate rules/laws, contracts, liabilities, etc, and can do thier fsbo very well,,,however, they are very much the minority!
I doubt very highly that there's a secret conspiracy against FSBO's or flat-fee sellers. On the other hand, let's be realistic- realtor's are in business to make money, and they're going to show their clients homes where they'll get a commission. Many FSBO's aren't willing to pay a buyer's broker anything, or they'll pay some small fee, so why should a realtor bother to show that house? And if you do go FSBO, how does the agent know what you're willing to pay- should they be calling every FSBO they see to determine who's willing to pay a good commission, or should they focus their efforts on people who understand the value of listing with an agent, and are willing to pay for that service (because, believe it or not, the listing agent does more for his/her money than just throw the listing in the MLS....)? They're going to follow the money.......
If not in the MLS no one knows you exist. So no one shows. Some local specialist may be aware but that is the only hope.
If you are in the MLS you go on the bottom of the stack based on a belief that you will be hard to deal with and more work than a normally listed property. You have to be a really good match to get shown.
Either situaltion may be fatal to a sale in a buyers market.
In a strong sellers market either may work reasonably well.
How about this then? We are FSBO, we are on the MLS, we are offering a Buyers' Agent fee which is stated on the MLS, on our website, and on all of our flyers. We are not trying to be difficult or trying to cut out a realtor totally. We just can't afford to pay them $15,000 and we only get $20,00. They are taking almost half. Is that how it normally is? That is at 6% commission. We did put alot of money and a ton of sweat into making this a nice home. Using a realtor to sell is not good for us because we need all the $ we can get to buy another home. We don't mind paying the Buyer's Agent. Is this fair to a realtor?
How about this then? We are FSBO, we are on the MLS, we are offering a Buyers' Agent fee which is stated on the MLS, on our website, and on all of our flyers. We are not trying to be difficult or trying to cut out a realtor totally. We just can't afford to pay them $15,000 and we only get $20,00. They are taking almost half. Is that how it normally is? That is at 6% commission. We did put alot of money and a ton of sweat into making this a nice home. Using a realtor to sell is not good for us because we need all the $ we can get to buy another home. We don't mind paying the Buyer's Agent. Is this fair to a realtor?
The buyers agent typically gets 1/2 of the commission, so in a 6% market, they'd get 3%. Most agents won't bother with a listing that will give them less than that, as they can make more money selling a different home to their client.
It's not the realtors' faults that you can't afford to pay what they need to charge to sell your home- that's a situation created either by you, or by the market. In either case, if you can't afford to pay the commission, you're going to have to just deal with getting less traffic and sitting on the market longer as a result. If you weigh the cost of that, it may quickly become feasible to use a realtor.
The buyers agent typically gets 1/2 of the commission, so in a 6% market, they'd get 3%. Most agents won't bother with a listing that will give them less than that, as they can make more money selling a different home to their client.
It's not the realtors' faults that you can't afford to pay what they need to charge to sell your home- that's a situation created either by you, or by the market. In either case, if you can't afford to pay the commission, you're going to have to just deal with getting less traffic and sitting on the market longer as a result. If you weigh the cost of that, it may quickly become feasible to use a realtor.
Bob
Of course we are offering 3%. Everyone knows that the selling/buyer agent split the commission.
You have that perfect know-it-all arrogant attitude to be a realtor here for sure. That is the attitude I won't pay to sell my home. Customer service is key here. This person tried to act like we don't have a clue and pull one over on us. The selling price of the home she gave those figures for was a totally different figure than she told us in person. Am I going to hire this person that can't even keep the figures the same? No.
Buyer Agent commission is only 3% and it must be paid by someone. If the FSBO is not paying then the buyer must add the 3% to the price they are offering to the seller. The commission MUST show up on the HUD-1. Real Estate Agents are not a charity. They are licensed professionals.
Of course we are offering 3%. Everyone knows that the selling/buyer agent split the commission.
You have that perfect know-it-all arrogant attitude to be a realtor here for sure. That is the attitude I won't pay to sell my home. Customer service is key here. This person tried to act like we don't have a clue and pull one over on us. The selling price of the home she gave those figures for was a totally different figure than she told us in person. Am I going to hire this person that can't even keep the figures the same? No.
Hmmm....didn't think I waws being arrogant at all- just realistic.
You stated that you were "offering a buyers agent fee"- you never said it was 3%- so for all we knew, you could have been offering $1,000 to an agent for bringing you a buyer. And "everyone" does not know that the agents spilt the commission, so it wasn't "arrogance" to point that out- it was meant to be educational in case you didn't know.
The same goes for the rest of the post- you've got a situation that's been created where you don't have enough equity in your home to make it feasible to pay 6% commissions, since as you put it "that is almost 1/2" of the profits. You go on to ask "is that the norm?" There's no "norm" relating commissions paid out to the amount the owner walks away with- it's all a matter of what the market has done since purchase, and what you have in equity.
You've had a bad experience with the realtor you met with- that doesn't mean they're all that way, so you need to talk to a few others.
Of course we are offering 3%. Everyone knows that the selling/buyer agent split the commission.
You have that perfect know-it-all arrogant attitude to be a realtor here for sure. That is the attitude I won't pay to sell my home. Customer service is key here. This person tried to act like we don't have a clue and pull one over on us. The selling price of the home she gave those figures for was a totally different figure than she told us in person. Am I going to hire this person that can't even keep the figures the same? No.
Calm down. Bob K is not a Realtor just a buyer/seller of RE. I am an agent. We are both I think simply trying to tell you how it is...I have no particular interest in your proceedings as I am a couple of thousand miles from you.
If the agent does not compute try a few more until you find one you relate to. My wife and I work as a team. Maybe half the time we find a client that relates much better to one of us than the other.
Dig around a bit. Check friends and such. You can likely find someone who will take your list for 4.5 or 5% and is a reasonable agent. Check for a younger startup who is hungry...somethimes youth and enthusiasm can be worth more than age and wisdom.
At least get in the MLS and give yourself that shot.
I am presuming that your local market stinks. If it does not them you have a much better shot and might well get by with minimal services.
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