Why do some people try to sell their house without an agent?

50 Replies

I'd like to pose this question to anyone who has insight into the 'off-market' market.

Why on Earth would anyone not use a real estate agent to sell their house?

It reminds me of the people who attempt to perform medical procedures on themselves or try to rebuild an engine in their driveway.

With anything in life I'm sure there's an element of 'it takes all kinds' but do you find a common theme among the market of those who do not work with an agent?

Is it ignorance?  

A stubbornness of not wanting to pay a (usually well deserved) commission? 

Circumstances?  (e.g. needing to sell in a few days)

Apathy?

It'd be interesting to hear what you've all experienced.

Because they don't want others meddling in their business.

Why pay a fee if you don't have to.

We are looking at a place to be rental, owner wants full retail as "by owner", I am thinking to offer asking minus 7%- 10% if she can't sell on her own, offer all cash with two week close.

Also rebuilding an engine in your driveway is not hard if you have tools and access to good machine shop.

I tried to sell my own house in 2009. I was upside down and trying to save the 15k I was going to have to spend on realtor fees. I still listed it on the MLS and got just as much traffic as I did with a realtor. But I didn't have a flimsy FSBO sign in my front yard. I spent about $350 to put it on the MLS and with that got a professional looking sign in the front yard. As far as most buyers were concerned, it was just like any other listing.

On the flip side, I was talking to my next door neighbor who recently decided to sell his house. It has a generic for sale sign with his phone number hand written on it. Only listed on Zillow. I hope for his sake he sells it, but its such a half *** effort. For the amount of resources and energy he put into fixing up what was an abandoned short sale, its surprising that he's getting stingy on the marketing.

For the basic SFR and you are selling quite a few of them there are some good reasons to sell them yourself/flat fee list. If you have the time to sell your property that is.
2.5-3% on let's say 10 properties that sell for 200K saved you 50K if you do it yourself.
Next is your in full control of the sale in every aspect, which I love, no middle man/woman and every single phone call comes to your phone about all the details of your property. No relay of info from what you hope is a great agent. It's not hard to sell your property at all either. The buyers agent is the one who does most of the work, your just saying yay or nay on there offer. I ALWAYS PAY 2.5% TO BUYERS AGENT THOUGH. These are some reasons why I sell my properties myself. Some investors have agents who take 1% to sell there properties but they have high volume and no time and that agent obviously gets a lot of volume as well so will take less commission.

I list my own properties when I have the time and save the money. I suppose I know my market well enough and I've learned so much about real estate through my investments, that truly - when I can I want to save the money. I will give a commission to buyer's agent of course. 

However, if I'm wrapped up in other projects or for out of state properties - real estate agents all the way! Indispensable.

I have sold several properties myself. Some of the properties were not prepped and since I was selling them to investors I didn't need to prep them. They would not have shown well to owner occupants. I sold several of those properties on land contracts to other investors. It was easier to find the buyers myself and structure an appropriate deal than working through a Realtor, or worse, two Realtors. Price wasn't the only consideration and it would have been difficult to brief a Realtor on all the combinations of price, interest rate, down payment, etc. that would have been acceptable for a deal to be struck.

If I am prepping a house and looking for the top price I will hire a Realtor to list on the MLS, even though I am licensed myself. I prefer another party between myself and the buyer's agent in this situation.

Also, I will note I've had some problems with the last few agents. Investors/Agents have different formulas and mindsets unless of course you have an investor agent. 

Waiting around for the agent only proved to be detrimental to the tenant. Furthermore, the agent didn't own rentals therefore didn't understand some of the protocol and ultimately, I end up doing most of the work anyway. Unless time or location are in question - it's one less person.

It's because the commission is very rarely "well deserved". The vast majority of realtors are just not very good and with the internet don't really bring any value to a deal other than convenience.

If a realtor was paid per hour, what would be an appropriate amount? On my last purchase the realtor did no more than 20 hours of work (even 10 is being generous). The realtor made $375 per hour for what? Nothing that I can't do myself. I could have hired a lawyer for a third of the cost.

What is a "well deserved" amount per hour? 

$50 an hour? 300 hours spent selling a $500,000 house? 

$100 an hour? 150 hours spent selling a $500,000 house?

You can get licensed in Texas in 6 weeks, comparing that to repairing an engine (1 year minimum for certification) or performing medical procedures (years and years of education and training) is really odd.

Originally posted by @Cal R. :

It's because the commission is very rarely "well deserved". The vast majority of realtors are just not very good and with the internet don't really bring any value to a deal other than convenience.

If a realtor was paid per hour, what would be an appropriate amount? On my last purchase the realtor did no more than 20 hours of work (even 10 is being generous). The realtor made $375 per hour for what? Nothing that I can't do myself. I could have hired a lawyer for a third of the cost.

What is a "well deserved" amount per hour? 

$50 an hour? 300 hours spent selling a $500,000 house? 

$100 an hour? 150 hours spent selling a $500,000 house?

You can get licensed in Texas in 6 weeks, comparing that to repairing an engine (1 year minimum for certification) or performing medical procedures (years and years of education and training) is really odd.

Our agent showed us probably 30 houses over a few months before we finally bought our house, but for the most part, I did most of the research finding the properties we walked. Then even though it was a buyer's agent, it seemed more like they were interested in being "neutral" when it came time to make an offer versus giving us good advice. At the end of the day, they submitted an offer that we wanted, but told us they had never had somebody accept that but they'd put it in if we wanted. We had the seller pay the most they could towards closing  (basically paid it all minus $1k or so), and also credited $5k on the sales price for repairs (after meeting us halfway on our initial offer). I think the realtor was more concerned with losing a prospective deal than having us pay 20k over market. In the end, the realtor probably made about $75/hr if I had to guess.

The first word in my own for sale listings is Agent-Owned.

Yet most everyday even the first few days of the listing I get calls/msgs from Agents and sometimes even BROKERS asking at Hello almost robotically without pause:

I SEE YOU ARE TRYING TO SELL YOUR HOME ON YOUR OWN.. WHY ARE YOU TRYING TO SELL YOUR HOME ON YOUR OWN? IT WILL NEVER SELL, YOU'RE BETTER OFF JUST RENTING IT OUT THAN TRYING TO SELLING IT YOURSELF....

(oops, the call dropped or something)

So I'd propose the better question is why are you (agents or others with a FSBO gripe) using active/new listings to try to get listings?!

Because usually that's what it boils down to, agents wasting their time trying to convince people who already made a decision to 'try' list on their 'own' with apparently a condescending or cockamamie approach that they are so confused and bewildered as to why anyone in their right mind would list their home without using a 3rd party.

If you know what you are doing and can price it properly, what's the harm going FSBO for a week or 2? Harm - very little. Savings - $10s of thousands.

Are you really comparing this to a medical procedure @Eric Delcol ? LOL  I hear CPAs and attorneys using that one, but not for selling something.

I just sold a single-family with a full service realtor.  The process was awful.  My realtor was great, but the whole process sucked.  Why am I paying a buyer's agent to negotiate against me anyway?  I know no other industry where this is so. To ask for all this ridiculous stuff?  At least they weren't nice and were slow and apathetic during the process...    

I'll be going the way I always have from now on.  On my own, belly to belly with principals.  Pass the savings on to the buyer or keep it myself.

Everyone has different reasons for selling. Everyone has different abilities and things they are good at too. Some people with the right house in the right area, with the right experience (and right temperament) can sell on their own just as effectively. Others not so much. I have a friend with the bedside manner of an rhino with an ear infection, who refuses to pay fees. I watch him time and again sell his houses for much less and over pay for purchases. Every single transaction he goes through is an explosion of emotion and problems and threats and lawsuits.

On the other hand I have taken clients to FSBO's who buy and sell a lot and gone through the process better than some agents. They have been on the ball and knew the deadlines and met their own deadlines. So it's more about the person than the task. I can handle some flip activities just fine, other things I need to hire out. Some people can sell others cannot. Some can paint, others should really just hire that out. :)

-house sells itself( desirable,special features) -house is too cheap for a realtor to make sense. -already have a buyer -more time to sell then they have money -bad experience with relators
Originally posted by @Eric Delcol :

...Why on Earth would anyone not use a real estate agent to sell their house?...Is it ignorance? 

gosh no! its not ignorance... saving the average 6% of { listing price } can be significant. Especially in areas were the average days to sell is in the 30 days range or significantly lower than national average. A property that sells for $1,000,000 at 6% is about $60,000. Can you think of a few things you could use $60,000 for?

Thanks everyone for the responses so far. Keep em coming!

A common theme seems to be of people writing from the perspective of the investor who is selling.

The point of view I'm curious about is that of the seller who responds to "yellow letters", bandit signs, etc.

For those of you who do direct mail and similar marketing strategies I'd love to hear from you.

What are some reasons and advantages your clients see to selling their property without an agent?

The main reason people don't list with agents is they want to keep the listing side of the commission in their pockets. However; most buyers are working with agents, so I would recommend anyone listing for themselves show "will pay selling commission of x%". 

I am a licensed agent, and currently have a house listed with another agent. In the past I have listed homes with agents when we were building office/retail type projects, and knew that other agents had a better handle and were targeting marketing on the residential, when I wasn't.

Note to sellers: Most buyers do not buy the house advertised in the ad that they call on, but switch to a different listing that better suits their needs. THAT is why it's good to work with an agent. When I worked doing ads for a real estate office many years ago, I tracked what ads people responded to, and advertised those things. Getting people to call was the goal, not selling the house being advertised (though of course that was icing on the cake if it happened)

@Eric Delcol

Retail buyers for homes expect the home to be in a livable condition. Homes in poor condition, hoarder homes, and homes that aren't suitable for the typical retail customer may need the help of an investor. Investors can fix up the home or at least make it attractive. You typically don't see pristine homes being sold to yellow-letters... it's the homes that are vacant, abandoned, and a problem for someone that doesn't want to deal with it. Investors and the wholesaler serve society by cleaning up these places and turning a profit while doing so.

Being a medical professional, I'm offended that you compared selling a house to performing a medical procedure.  I spent years training to perform high-risk medical procedures.  How long does it take to obtain a real estate license?  My partner sold her house within a month of it being on the market and she did not have to pay any "highly trained" real estate agent to do so. 

I used to renovate Victorian homes and put a lot of character into the houses. It's a very different type of renovation than the normal cookie-cutter 'all walls taupe and white trim' investor rehab. 

People looking for a historic home are looking for character and having special items like 'these windows came from a school house' and the lighting came from there and these are the original fireplace mantels, that were completely stripped down to this beautiful tiger oak' makes a huge difference. 

Writing all of these little details down doesn't work. Nobody knows the rehab of that house as well as I, since I sourced all of the 'ingredients'. No agent will know those details and those are the things that sell a historic house - having that part of history to tell their friends and visitors. 

Years ago I once got 10 FSBOs in our neighborhood together and we pooled resources and made a big open house with big ads and raffle etc. It brought out the buyers and several of our homes sold that way.

I know someone who is considering selling to an investor without having tried the MLS first. Besides the house needing sprucing up due to raising a family there for 15+ years, I think part of the reason is because he will have to split the equity with his ex (so all the work for half the profit)...and he just wants to move on to his new out of state job.

save money plain and simple

Originally posted by @Cal R. :

...It's because the commission is very rarely "well deserved"...

Play nice folks! I do know some realtors. I guess it can be a challenging profession especially since many realtors work on a commission only basis. Driving some joker around to see countless properties can be an expensive gamble if they don't actually follow through.

I've researched doing a Flat Fee MLS listing on a property I want to sell, but am leaning against it due to the fact that I was told by other realtors that they would steer a potential buyer away due to the 'perceived' extra work that the buyer's agent would supposedly have to do due to no listing agent. Any Agents care to chime in?

Originally posted by @Eric Delcol :

Thanks everyone for the responses so far. Keep em coming!

A common theme seems to be of people writing from the perspective of the investor who is selling.

The point of view I'm curious about is that of the seller who responds to "yellow letters", bandit signs, etc.

For those of you who do direct mail and similar marketing strategies I'd love to hear from you.

What are some reasons and advantages your clients see to selling their property without an agent?

It's easy, that's why. I had a guy yesterday sell his 130k home for 95k. Just needs new carpet and paint, he gets to shut the door and move on, hassle free. Others do it's because of debt, drugs/ alcohol addiction, family, death, repair cost, etc. It all comes down to hassle free, and closing the door on that chapter in their lives without and effort on their part, just a phone call, and it's done.

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