Realtors vs. FSBOs

16 Replies

I was curious what is better, buying property from a realtor, or buying a FSBO home. Do i have to pay realtors a big commission when i buy a property? Is it "dangerous" buying a property from someone directly?

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I've found that many FSBO owners are just being cheap and don't want to deal with realtors. At the same time, they seem to be less inclined to want to really "negotiate." like the other guy said, as a buyer, you don't have any commissions you have to pay on a purchase, so it is not a disservice to use a realtor.

Neither one is "better". The key is finding either a FSBO or realtor listed property that is a good deal, period. Use all the resources you can to find deals. :D

Like Amy said, you really need to focus on finding deals. Use all of your resources. It shouldn't matter if it comes from a FSBO, a realtor, or the barber. Networking is very important in this biz - get to know everyone you can. You never know where your next deal will come from!

I have:
Put the word out to bird dogs
Passed out about 100 cards in the last week
mailed to NODS, lis pends, ect

mass mailed letters and postcards to : BK's, Divorces, Obits, Forclosures, Judgments, Criminal arrest over 5000, City notices

I have selected certian areas and mailed everyone in the zip area. Door hangers in the area as well.

Chose another neighborhood and did driveby's and sent letters to the owners of empty houses.
Lisa :wink:

Thanks all for the input. I guess I'll keep all my options open. Like you all said, it's probably better to keep all my options open. Thank you.

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Originally posted by "bobbyjoe":
Listed owners haved been "educated" by their agent and KNOW what a decent price is.

This seems reasonable, but don't realtors push people to list a bit high? I've heard of people getting "bought" by realtors who tell them they can sell their house for a higher price then someone else. The house usually stays on the market because it is not reasonably priced; the realtor can brag that they had this great listing.

Seems like more bad real estate agent stories. I'm sure they're not all like that.

It's their property, they own it, so they can do with it as they wish. However, without professional representation, FSBO's stigmatize themselves on how they are perceived, which only hurts their own credibility. IMO, they set themselves up for criticism, undue or not.

I think ToneyJ and "guest" both have it pretty much right. Both sides walk into a FSBO to "make a steal" and most of the buyers I know who've bought a FSBO think they got a steal, but they had done no competitive market analysis, etc. Both the seller and the buyer can't win big.

It's also been my opinion that FSBO sellers are a pain in the :badwords: . They do think theirs is the best property. In my area they almost ALWAYS list above the real value of the home; they never want to negotiate; and, they take everything personal.

There might be a subtle difference in what we're debating though. If you learn about someone thinking of selling or in a situation where they should/might sell but who doesn't have a Realtor, that may still be a great deal. But, if you're looking at the Open House of someone who has been set up for 2 months on FSBO.com, you're a lot less likely to get a deal IMHO. Finding the great early deals probably by definition makes them FSBOs but when I think FSBO I'm generally thinking about the latter category.

The trick in utilizing the services of a realtor is making sure they understand what "you" are looking for long term. I have picked up the management of properties from investors that shortly after closing realized that the realtor didn't really pay attention to what they truly wanted or just didn't understand. They ended up being upside down on some properties because the realtor, for whatever reason, didn't grasp the concept that you were an investor and not a retail buyer. Many agent can't separate the two. Find one that you can trust and that knows investors. If they can't think like an investor, then how can they serve your needs as an investor.

Lee Warren

Just wanted to throw my 2 cents in about this subject.

One thing to consider when you deal with a FSBO is disclosures. Can you be really sure that everything is disclosed and are you ready to deal with the logistical fallout if something goes wrong?
one of the biggest expenses of being a realtor is errors and omissions insurance and it is there for a reason.
In my geographical area, there are very draconian building codes and it is hard (and expen$ive) to get projects through so many, many homeowners just build without permits. This is something that is always addressed by ethical agents.

I agree with the general consensus. It's all in the numbers and the terms. If they both add up to profit, it really does'nt matter who you buy the property from.

Adding my voice to the mix, I also agree as an investor you need to explore all possiblilites. However, if you do take the time to get to know & work with a realtor you trust, I think that is the better way to go. A realtor representing you as a buyers' agent has a fiduciary duty to you in looking out for your best interest. And it is just good common sense to have someone(who the seller is paying)else there to oversee all the very important contract matters & deadlines.
I have been a realtor for almost 4 years now and am a beginning investor. I may not stay a realtor, but I do intend to continue investing in RE, and would most definately use a RE agent.

By the way, I have never met an agent who intentially encourages a seller to inflate their asking price. We usually have the opposite problem, trying to convince the seller what a realistic price to ask for his/her home is!

Ditto ...buy from whomever will give you the best deal. There is no advantage/disadvantage..just make sure you have a good attorney or title agent...

Originally posted by "Pam Hudson":
Originally posted by "bobbyjoe":
Listed owners haved been "educated" by their agent and KNOW what a decent price is.

This seems reasonable, but don't realtors push people to list a bit high? I've heard of people getting "bought" by realtors who tell them they can sell their house for a higher price then someone else. The house usually stays on the market because it is not reasonably priced; the realtor can brag that they had this great listing.

Seems like more bad real estate agent stories. I'm sure they're not all like that.

Speaking from a real estate company owners point of view if you have agents that are listing homes higher than the CMA's they are not very good or very smart agents. All that does is cost agents money to advertise the house and it reduces thier chances of getting a commission.

Of course you will have some buyers who insist that you list their house higher than what it is worth but I usually pass on those listings. I would rather let that be someone else's problem.

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