Author Topic: FSBO vs using an agent  (Read 619 times)

zoochadookdook

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FSBO vs using an agent
« on: August 06, 2019, 11:32:52 AM »
Hey all-numbers first

$115k mrtg 4.25% 30 year. PP was 141. Owned the last 4 years just refinanced
Real estate agent said should sell at $240k in 30-45 days looking at local comps
Rental price would be 1600-1800. I would have to have managed as I'll be across the country.

I'm leaning towards selling. I don't need the money for a down payment as I already have cash set aside; but the market is good. Real estate investing interests me and that's still on the board.  Our area is good, condos are being built down the street and I think it's appreciating; but-sometimes it's good to take the money and run.

I've been given the realtors fees and was considering selling myself FSBO. I sold a 390k house by owner next to my friends (friends with the owner) last summer and went through the process. The hardest part was realtors trying to show up saying they represented the buyers (because through zillow the buyer would click the link which would vet them through a realtor vs just calling my listed cell); but eventually I did get it sold and saved her the 5-6%.

Any ideas tips hints? I'm still interested in owning rentals/building equity/diversifying but it seems almost like a duplex or similar would be better as a rental.

Jon Bon

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Re: FSBO vs using an agent
« Reply #1 on: August 06, 2019, 11:35:15 AM »
Don't FSBO

There is a middle ground.

Do Flat Fee MLS

In my state you can get on the MLS for $500 bucks. So you get in front of all the eyeballs for 1/10 the cost of a sellers agent. You still handle showings, negotiations, offers, etc. But you save the 3% going to your agent.




zoochadookdook

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Re: FSBO vs using an agent
« Reply #2 on: August 06, 2019, 11:43:20 AM »
Don't FSBO

There is a middle ground.

Do Flat Fee MLS

In my state you can get on the MLS for $500 bucks. So you get in front of all the eyeballs for 1/10 the cost of a sellers agent. You still handle showings, negotiations, offers, etc. But you save the 3% going to your agent.

Would I really have any advantage vs social media platforming/FSBO if I want to save on a buyers agent commission? No realtor on MLS is going to bring me a buyer (or does the public parooze it as well?)

Midwest

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Re: FSBO vs using an agent
« Reply #3 on: August 06, 2019, 11:55:29 AM »
Don't FSBO

There is a middle ground.

Do Flat Fee MLS

In my state you can get on the MLS for $500 bucks. So you get in front of all the eyeballs for 1/10 the cost of a sellers agent. You still handle showings, negotiations, offers, etc. But you save the 3% going to your agent.

Why not try FSBO first?  I've sold 2 without an agent.  Last one I offered to pay the buyers agent if they brought me a buyer.  Fortunately I found a buyer without an agent before that happened.

You can always go to a flat fee MLS as the next step.

Jon Bon

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Re: FSBO vs using an agent
« Reply #4 on: August 06, 2019, 02:38:11 PM »
Zillow takes like 30 seconds and costs nothing. Sure, see what you get.

Fishingmn

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Re: FSBO vs using an agent
« Reply #5 on: August 06, 2019, 07:15:40 PM »
Zillow takes like 30 seconds and costs nothing. Sure, see what you get.

Disclosure - I'm a licensed Realtor (but mostly retired)

Please don't take 30 seconds to put it on Zillow. At a bare minimum if you are doing FSBO take the time to stage the property and hire a professional photographer to take high quality pictures. I highly recommend Obeo which I've used for 10 years. Way cheaper than others I've seen and I like the quality.

I do like the Flat fee idea - you'll get WAY more exposure which means you're more likely to get an offer closest to full market price. You should check into what the going buyer's agent fee is in your market. In the Twin Cities it's 2.7% so no need to pay 3%.

Finally, if you do go full service agent there's no need to pay 6% (or 3% to the listing agent). Many like me will list for 2% with a complete list of services.

Good luck!
« Last Edit: August 06, 2019, 07:17:54 PM by Fishingmn »

zoochadookdook

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Re: FSBO vs using an agent
« Reply #6 on: August 07, 2019, 07:37:27 AM »
Zillow takes like 30 seconds and costs nothing. Sure, see what you get.

Disclosure - I'm a licensed Realtor (but mostly retired)

Please don't take 30 seconds to put it on Zillow. At a bare minimum if you are doing FSBO take the time to stage the property and hire a professional photographer to take high quality pictures. I highly recommend Obeo which I've used for 10 years. Way cheaper than others I've seen and I like the quality.

I do like the Flat fee idea - you'll get WAY more exposure which means you're more likely to get an offer closest to full market price. You should check into what the going buyer's agent fee is in your market. In the Twin Cities it's 2.7% so no need to pay 3%.

Finally, if you do go full service agent there's no need to pay 6% (or 3% to the listing agent). Many like me will list for 2% with a complete list of services.

Good luck!

Thanks! So a full service agent stages it and.....?

The sellers agent fee I think in michigan is around 3% but they build it into 5% or so to pay the buyers agent. I wouldn't mind as much going full service agent as 2% is much more stomach able vs 6% for staging and taking care of everything. I don't have any furniture so that would be a headache. At the very least I planned on getting a cleaning company and photographer in.
« Last Edit: August 07, 2019, 08:02:37 AM by zoochadookdook »

Jon Bon

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Re: FSBO vs using an agent
« Reply #7 on: August 07, 2019, 11:03:25 AM »
Obviously don't take 30 seconds, that was hyperbole.

If you already have good pictures a GOOD zillow listing should take <1 hour, cost zero dollars, and require sign off from no one. 

I defer to fishingmn on staging but I think if you have any sense of style and dont have piles of shit in your house it would be fine. I say generally take about 1/4 of the furniture and personal items out and that's a good start. Yes pay a professional photographer with a wide angle lens, I pay my person about $200. Clean it well and touch up paint goes a crazy long way.

95% of the value added by a listing agent is getting you on the MLS. After that they just want to close the deal.

zoochadookdook

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Re: FSBO vs using an agent
« Reply #8 on: August 07, 2019, 11:29:22 AM »
Obviously don't take 30 seconds, that was hyperbole.

If you already have good pictures a GOOD zillow listing should take <1 hour, cost zero dollars, and require sign off from no one. 

I defer to fishingmn on staging but I think if you have any sense of style and dont have piles of shit in your house it would be fine. I say generally take about 1/4 of the furniture and personal items out and that's a good start. Yes pay a professional photographer with a wide angle lens, I pay my person about $200. Clean it well and touch up paint goes a crazy long way.

95% of the value added by a listing agent is getting you on the MLS. After that they just want to close the deal.

Well shoot-flat fee you can get it listed on MLS right? I plan on replacing all the smoke detectors/starting touch up paint this weekend/next week. Unfortunately most all my furniture is gone via a breakup a week/half ago; but i'll make sure it's clean.

DadJokes

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Re: FSBO vs using an agent
« Reply #9 on: August 07, 2019, 12:30:20 PM »
How do you handle the contract on a FSBO?

zoochadookdook

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Re: FSBO vs using an agent
« Reply #10 on: August 07, 2019, 12:36:09 PM »
How do you handle the contract on a FSBO?

As in the selling? You contact a title company and they generally handle all the sales details. If the purchaser wants an inspection-generally required for a mortgage but in case of cash buyers not required-then they get that prior. What other contracts?

Jon Bon

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Re: FSBO vs using an agent
« Reply #11 on: August 07, 2019, 12:38:34 PM »
Most states have a color by numbers contract.

Makes you realize how little work realtors do when EVERY SINGLE CONTACT is the exact same. Just a few numbers are changed around.

But yeah the title company does the actual work in pretty much every sale.


zoochadookdook

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Re: FSBO vs using an agent
« Reply #12 on: August 07, 2019, 12:47:50 PM »
Most states have a color by numbers contract.

Makes you realize how little work realtors do when EVERY SINGLE CONTACT is the exact same. Just a few numbers are changed around.

But yeah the title company does the actual work in pretty much every sale.

It's kind of ridiculous. I own a llc that involves buying and selling gym equipment/such in my free time and i'll drive an hour for 100 bucks easy. The fact that they have to list it on a site and show up/walk through for 3% (ok sometimes stage whatever) is crazy to me. Like i showed the house i helped FSBO last summer maybe 12 times and while inconvenient-it wasn't hard to go through the title company, meet them for inspections, get all the documents signed back and form. I took a 1.5% commission for selling it over 380k saving her 4.5% on a 400k property.

Car Jack

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Re: FSBO vs using an agent
« Reply #13 on: August 07, 2019, 12:55:49 PM »
But yeah the title company does the actual work in pretty much every sale.

Or in states where there's no such thing as a title company (like mine), you'd have your lawyer do the title search and closing.  I've done that both to sell and to buy.  In my state, the only work that the selling agent does is show up to the closing to collect their commission check.  The lawyer had cut the check in advance.  A title is registered in the county court (where actual titles go back to land grants by King George) by the lawyer.  Been there, watched him do his search which was pretty cool.

Fishingmn

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Re: FSBO vs using an agent
« Reply #14 on: August 07, 2019, 01:02:48 PM »
Zillow takes like 30 seconds and costs nothing. Sure, see what you get.

Disclosure - I'm a licensed Realtor (but mostly retired)

Please don't take 30 seconds to put it on Zillow. At a bare minimum if you are doing FSBO take the time to stage the property and hire a professional photographer to take high quality pictures. I highly recommend Obeo which I've used for 10 years. Way cheaper than others I've seen and I like the quality.

I do like the Flat fee idea - you'll get WAY more exposure which means you're more likely to get an offer closest to full market price. You should check into what the going buyer's agent fee is in your market. In the Twin Cities it's 2.7% so no need to pay 3%.

Finally, if you do go full service agent there's no need to pay 6% (or 3% to the listing agent). Many like me will list for 2% with a complete list of services.

Good luck!

Thanks! So a full service agent stages it and.....?

The sellers agent fee I think in michigan is around 3% but they build it into 5% or so to pay the buyers agent. I wouldn't mind as much going full service agent as 2% is much more stomach able vs 6% for staging and taking care of everything. I don't have any furniture so that would be a headache. At the very least I planned on getting a cleaning company and photographer in.

I pay a professional home stager ($200-250) and hire a professional photographer  ($150-200) and charge 2% (plus 2.7% to buyer's agent - so total is 4.7%). That 2% then gets split with my broker (I get a large % of it). I have no guarantee that it will sell and may have to eat the up front costs if it doesn't. In addition to these costs I have marketing costs (sign install, brochures) and all of the costs of being an agent (Association fees, MLS fees & Continuing Education).

I then offer negotiation assistance, management of the process and in some cases marriage counseling (or mediation for those going through a divorce or death).

Sure, it seems like a lot of money. But it's not as easy as eliminate agents as that means MLS goes away and Zillow (which makes almost all it's money from agents and MLS feeds) is vastly different from a business model. All of the required standards that MLS enforces for housing information and details on transactions for sales comparisons is based on having MLS. Food for thought.

MoneyMatrix

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Re: FSBO vs using an agent
« Reply #15 on: August 07, 2019, 08:38:25 PM »
I think much of the decision to sell or not depends on 2 things. Current cashflow and future potential of the area.
Well 3, the 3rd is how you feel about having rentals and the occasional issues that come up.

Taking into account all expenses and potential expenses (Property management, vacancy, maintenance, repair, and capital expenses-like a roof), do you make money?

Future potential of the area - What will it be worth in 20 years? Are there jobs in the area and potential for more, is there limited land for development?  Those are the 2 things that mainly determine value and growth.  You said it's a good area and there's development, so you are partway there.

My personal experience is that if I have a rental that I like in an area I think has future potential it's much easier to ride out the issues that come up and down times.

You are young enough to take a long term approach on this if thats what you want to do.

Megma

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Re: FSBO vs using an agent
« Reply #16 on: August 14, 2019, 02:04:04 PM »
Don't use the Zillow "make me move" listing - no one will see your house.

My husband and I bought this spring in a really hot market and went and looked at a Zillow "Make Me Move" listing I saw. The house was empty and had been listed for 2 months because most people won't see it. We didn't like some things about the house (little smaller than we wanted) but the inside was beautifully re-done with nice kitchen, high-end fixtures. Most houses were selling in 2-3 days and this quite nice house had been sitting there for two months with several price drops. When we looked at it, it was listed 20k below similar houses.

Do FSBO and offer a buyers agent commission or flat fee agency at least.