Why do some people try to sell their house without an agent?
Investor · Tampa, FL · Member since 2016 · 334 posts · 215 votes
Why do some people try to sell their house without an agent?
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Chesterfield, VA · Member since 2017 · 10 posts · 8 votes
9yWhy 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.
51 Replies
- 9yJeff CopelandBusiness MemberReal Estate Broker · Tampa Bay/St Petersburg, FL · Member since 2015 · 1k+ posts · 2k+ votes
Your question seems to be aimed more at the elusive "motivated seller" - as in, why wouldn't a distressed seller just hire an agent? (Correct me if I'm wrong)
I had a seller contact me about a year ago with a pretty nice 4/2 home that was about 75% renovated. He never got around to finishing the second bath and the fourth bedroom, and he wanted to sell.
Of course I asked him, "why do you need to sell", and he explained be had taken a job in San Francisco (we're in Florida) and had to move immediately for work. So of course I asked him, "when do you need to close?", and he literally said "Yesterday...If we could close today, I'd be on a plane tonight". This was on a Tuesday. We closed three days later...that Friday...and he was on a plane Friday night.
In his case, in addition to the need to sell immediately, he also had unfinished rooms that would have made a traditional retail sale impossible, not to mention (even if it were possible), and financed retail sale would have taken 30-45 days to close.
So, in my experience, the two big factors are usually: 1) need to close very quickly, and 2) property in need of repairs that make a retail sale unfeasible.
Copeland Morgan LLC4.770 Reviews People sell their homes without a Listing Agent for a variety of reasons. mainly to save money and control the transaction.
FSBO without MLS presence rarely work.
To be effective on selling it yourself, you have to get onto the local MLS ... there is where Flat Fee or Entry Only listings come in. Savings + exposure + sale. You do have to dod some leg work ... there is where the savings are.
@Eric Delcol: You as an investor should know that a 3% commission while calculated on the entire sale price comes straight, directly and ONLY from your equity. This 3% then affects disproportionally your ROI; specially your COC. The large your financial leverage on the project, the greater the impact on on your bottom line.
Most investors we work with fee comfortable dealing with Buyer's agents, showings (or having someone to show, or having a lockbox) properties, negotiating deals, reading contract and using a Real Estate Attorney (that they would use anyway). By just doing these things (that they would probably need to do anyway even with a Listing Agent), the investor, like you can improve your bottom line in each project by much more than 3% you are saving. If your projects have high leverage (which I recommend), you can boost your profit by 25%+ each time ... if you do 12 deals a year (which many of our customers do) ... that is hundreds of thousands of dollars in profit ... enough to hire an assistant for $40K a year to do all the leg work.
Regarding @Jim C.'s comment. This is just a cheap complain Realtors have because they are scared of Flat Fee brokerages and have to through dirt of the business model that undermines (so they think) their long-established commission structure. With today's information availability (and this I can tell from a lot of experience), buyers in many (if not all) instances look for properties online and ask their Realtors to show them the ones they like online ... Realtors refusing to show these listing because they are Flat Fee listings, just loose the client because the buyer grabs the phone and contact the listing agent directly and skip his Realtor altogether ...
I would like to post the question back to @Eric Delcol - Why do investors still use full service listing brokerages?
- Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes9y
People do not necessarily NEED agents, but an agent MAY be a better source of buyers, etc due to the exposure they can get the seller. As in Jeff's case, he is also a buyer and was able to get the seller out of the house FAST!
- 9yMike CumbieBusiness MemberREALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
Hi @Jim C.
"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?"
I don't have a problem selling flat fee listings to my buyers. It's really no extra work I just talk to the homeowner like an agent and tell them what they need to get me. If they are not sure I send them to their flat fee broker because they still have responsibility for the transaction. The amount of money they get paid does not automatically absolve them of liability. Most times it does actually work out better for me and my client because I get to put clauses in the contract or remove things an agent would never let me get away with, because the owner does not know the contracts.
I have never sold one that a seller was using a flat fee broker that I could not have gotten my clients EMD back up to the day of closing with no penalties. I've had some clients with some pretty shaky pre-approvals go that way. So I would never shy away from one myself as an agent.
@Mike Cumbie is on the right track ... furthermore: smart Buyer agents can convert that Flat Fee Seller into a buyer for them to represent - remember that 85% of seller buy a property within a 15 mile radius. See the money flow in for smart Realtors.
- Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes9y
I tried it for a little bit because the savings is huge. And while the extra MLS exposure I do think has significant value, in my market, properties are selling themselves and apps like Zillow have changed the game. BUT, honestly, the hassle of leaving work to do showings, dealing with CO and inspection crap, following up with people, preparing pretty marketing packages, weeding out serious buyers, reviewing offers, dealing with the other brokers, staging or advice on de-cluttering that you wouldn't see on your own, professional pictures, etc. etc. ...I would work with a broker 100x over just to have those burdens taken off me. Do brokers actually get you better deals? Maybe. Maybe not. But especially since selling is stressful to begin with, leave it to the brokers to do their thing. Of course, depending on your market, maybe try it FSBO for a week or so, but if it doesn't fly off the market at or over asking, hire a good agent. It's worth every penny.
- Investor · Lawrenceville, NJ · Member since 2016 · 64 posts · 6 votes9y
Im not sold that buyer's agents add much value in brining buyers from their personal rolodex - a "pocket" buyer... There may be cases where an agent knows the perfect buyer and can expedite a deal. However, active buyers are on the internet searching everyday and set up new listing alerts. If your property enters the MLS, a buyer will find it pretty quickly. Im also not sure an educated seller would take the chance to pay a full sell-side fee for the chance that the particular agent he/she hires will have a list of perfect buyers just sitting around. In that case, what reason would there be to even list the property? If the agent has a database of "pocket" buyers, they should step up, making an introduction to the home, and submitting an offer! The reason this never happens is because everything is on the internet and agents no longer control the flow of data.
- Professional · Brooklyn, NY · Member since 2017 · 624 posts · 147 votes9y
Originally posted by @Jessica Zolotorofe:
...I would work with a broker 100x over just to have those burdens taken off me. Do brokers actually get you better deals? Maybe. Maybe not. ...
I think it really depends on the particulars of the case and there are times when it can make sense to utilize an agent. Some sellers by the way may already include agent fees in the price above their target profit.
In some markets there can be a HUGE difference between selling a property yourself and utilizing the MLS -- in a sellers market, getting multiple offers in excess of asking price can be nice; as would the agent educating buyers about the market, area, organizing showings etc. which some buyers may find quite valuable. Some however still just like to save.
I personally as an investor may need a license because access to the MLS can be helpful in researching deals or getting comps.
- Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes9y
There is a reason a certain saying exists ( Increase your network to increase your net worth ). The more well connected you are and the more things you can do for people the more business generally comes your way.
I don't know why brokers and agents want to convert FSBO's. Who cares?? I sure don't.
You do not need all the business out there to do very well as a broker or agent.
There is a small percentage of the population that wants to sell themselves, have ultimate control, and generally have inflated ego's ( not all but some ).
It's a numbers game whether a broker or an investor. It doesn't happen but if I ran across 1,000 investors that said pound sand to me all year and then I just close 10 transactions at 100,000 commission each time on commercial that is 1,000,000 a year. Since I am the principal broker I keep it all.
I have lot's of friends in residential who do very well also. They simply respond to people that contact them for business. They do not have time for people to tell them they are not needed, why does everyone pay them,blah,blah,blah. That is the mindset of an occasional investor and if they want to do business that way then more power to them.
I have read so many of these topics over a decade and it's the same discussion over and over.
Why does someone wash a car themselves versus have someone else do it? Some people want to save the money, some enjoy washing a car, others have so a low return on time for income that they see value in doing all things themselves.
Clients that I have value TIME and EXPERTISE in commercial real estate. Some people just like service. If they didn't then every industry out there would not have people. A small percentage goes through self check out at Wal-Mart. A small percentage gets their own food versus being waited on. A small percentage changes their own oil instead of someone doing it for them. A big part of the population LOVES service and will pay a premium to experience it and have it.
The problem with some people's opinions is that they are so heavily personally convicted about it that they feel everyone else should have that view and if they do not then they are wrong etc.
I get someone to do my yard, to change my oil, to was my car, to work on my business website, and on and on. I let them do what they are best at and I do what I enjoy and I am passionate about and best at.
If people make low incomes then they can see value in savings by doing it all themselves. When your income starts going higher and higher per hour you have others do things for you. I can see in residential people being more cheap as many have limited income and resources in the lower price points. On the commercial side clients want service as they generally have more money than time to get things done.
- Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes9y
FSBO means one of two things, typically...
- Seller is completely delusional about value. So, no deal. My buyers need mortgages, and those need appraisals. You might get lucky and find a cash buyer that's a dummy, but that is more likely to happen if the property experiences maximum exposure and marketing.
- Seller isn't going to realize when the buyer's agent and/or buyer starts writing a bunch of stuff in the contract that is to the advantage of the buyer ("seller to pay all $7k of Oakland's transfer tax"), that the seller does not realize. And, typically, if the seller isn't delusional about value like above, they are going the other direction and under-valuing their own home. This is great for my buyer, and speaking of appraisals guess which document the seller will NOT get a copy of or know what it says (muahaha).
Agents serve in part as a moderating tool, to keep people that only do this once every decade or so from going crazy in one direction or the other.
Investor-to-investor, especially if they already know each other, the dynamic is a bit different.
- Real Estate Agent · Las Vegas, NV · Member since 2015 · 2k+ posts · 1k+ votes9yWhy do some people try to sell their house without an agent?
In my case it was purely by chance .I purchased a home on auction.com a few years back and it turned out my friend was at the tale end of his short sale stay and had to vacate His daughter qualfied for the home . i simpy googled a state contract for California and it had all the steps to to complete the transaction and the escrow company helped with the rest it really is an easy process and I was able to save realtor fees and pass on some saving to my friend. The stats are not in favor of fsbo sellers but if you have the time it is a very easy process
- 9yMike CumbieBusiness MemberREALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
If the only advantage you are getting from your listing agent is putting it on the MLS then yes it's pretty much a waste. If you know why you should accept the 142K Conventional offer over the 153K FHA offer on the flip you bought at the April county tax auction, then it's a waste. If you know the impact of accepting an offer with a deck permit listed when you don't have one then it's a waste. If you know how to use your attorney approval process to take the best offer and still shop them, it's a waste. If you know how to evaluate the contingent on transfer of title property and contract to see the odds of it closing and value, then it's a waste. If you know how the bump notice works and how and when to have it issued then it's a waste. If you know which local lenders take 60+ days to close and which lenders just hand out pre-approval letters then fail to close then it's a waste. If you know what septic person to call......
Yes it is easy to close a house when all goes well.
- 9yDarren SagerPro MemberInvestor · Tampa, FL · Member since 2013 · 2k+ posts · 1k+ votes
Not withstanding some great points that @Mike Cumbie just mentioned, selling your home yourself is akin to Tiffany's selling a diamond ring at a garage sale. Are they going to get the price at the garage sale for one of their rings as you would if you went into one of their stores? Heck no. The perceived value to the buyer is the home is not worth as much and they're not willing to pay market value for FSBO's. Market stats from the National Association of Realtors I believe show that FSBO's sell for an average of 13% less than homes marketed through realtors. So there's no "savings" per se but in most cases a less money actually received in the end.
Does that mean that a FSBO can't achieve market value in price? No, but the law of averages say you will not.
- Real Estate Agent · Jacksonville, FL · Member since 2015 · 1k+ posts · 1k+ votes9y
Of course you can sell your own properties, but should you? Do you cut her own hair? Just a pair of scissors and mirror. Do perform your own electrical repair? Just some wires and screwdriver. The obvious answer is no, unless you have real experience in that field.
It is really easy to put numbers on an xls sheet and say this is the outcome. What will you do if the deal goes sideways or the buyer is up to no go? There is a level of risk mitigation that agents provide.
I know Jacksonville better than most. I have lived here my whole life and I read the mls everyday and have for several years. I know the market and the neighborhoods and can value the property correctly. Typically the for sale by owners I have seen are vastly underpriced and sell in a day. Usually more than 6%, typical below the commission. The other option is they over price and will not negotiate. The property is only on the MLS and agents will not bring people to you see the place. This is will significantly reduce the pool of potential buyers.
For most investors, the process of selling a house is a low value activity. High value activities are finding deals, analyzing, closing , financing and value add, (reono solid management etc.) If you are to scale in the business, you need a team. If you want a good team, you are going to have to pay for it. There seems to be this notion that only the investor should make money and everyone else should work for free. It is a cost you should consider as part of the deal when determining its viability. It is easy to step over dollars to get to pennies.
- Real Estate Broker · Fairhope, AL · Member since 2017 · 32 posts · 18 votes9ySome sellers need to net "x" amount to pay off mortgage, pay bills, etc. and having a realtor take a commission eats in to that profit. However, as a realtor I have helped FSBO sellers their house for more than they thought it was worth. I've helped them sell faster than on their own (saving them mortgage payments on a property they know they want to get out of). I've helped them market and showcase their home in a way that they couldn't achieve. I've saved sellers from making potentially large mistakes on the paperwork as new contacts are getting more and more complicated. Every case is different and some houses sell themselves or some sellers have the skill set necessary to effective and efficiently market their home. Some sellers are "too close" to the deal and lose out on several buyers - having the realtor representing you in this case could save thousands!
I am also a Realtor member of the Tampa Bay Area's GTAR with 50,000+ members.
Some of the services available to Realtor's clients are:
- Via the MLS to its 50,000+ Realtors & their Caravan tours
- Professional easy to read signage with brochure dispensers
- Minimum of 25 professional photographs on MLS
- Real or virtual staging on those photographs
- Drone views of home and neighborhood
- Twilight views giving a warm and homey feeling
- Narrated Video Tours on the MLS which then feeds Realtor.com, Zillow, Homes, Redfin, + many more
- a 3-D floor plan with exact measurements for the MLS
- a 3-D 360 degree tour of every room in the house for the MLS
- a Dollhouse view of the house on the MLS
- 4 page 8 1/2 x 11" Color Brochures with 26 photographs
- Social Media Campaigns via Facebook, Twitter, YouTube, LinkedIn, Instagram, Tumblr, Pinterest, etc.
- Well Advertised Open houses on .coms & social
- Since 95% of today's buyers are using the internet to search for homes, and 50% actually found the homes they bought on the internet, it makes sense to put the home on the internet with its own website, using its address as the domain name.
- Consultation on upgrades, curb appeal, and decluttering
- Real Estate Agent · Columbia, SC · Member since 2016 · 13 posts · 23 votes9yLesley Resnick I'm with you after I spend my time rehabbing a home, I'm definitely hiring a professional to market and negotiate. My expertise is in rehabbing. Their expertise is selling it for top dollar! I do not see the value in tying my time up selling the property, when I could be working on the next one.
- Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes9y
I admit I didn't read the prior posts. But to answer "Why do some people try to sell their house without an agent?"... as an investor, I know that 1) we are in a seller's market, 2) the investment property we sold is in demand from local investors, 3) I had 4 individuals interested in the property, 4) the "market" is reasonably well defined and homogeneous, 5) I knew exactly what price to ask for and what my membership wanted, 6) adding a broker in this case would add no value. Hope that helps answer the question. In general, though, I use a broker. For what it's worth, we've sold 10x more than what we bought in the last 18-24 months....
- Investor · new york, NJ · Member since 2014 · 137 posts · 13 votes9y
I havent really understood what a listing agent does - it seems they are supposed to do a lot but rarely do? am I wrong - or just had bad luck?
- Investor · st. Catherines, ontario · Member since 2016 · 3 posts · 0 votes9y
I can see why an investor would want to save the money and list a property FSBO. However, the mindset of many buyers when they negotiate a offer on a FSBO is that they can save some money because the owner isn't paying commission, so they will offer less based on that.
As much as i don't like a percentage commission system, I will continue to bite the bullet and use realtors.
- Real Estate Agent · Jacksonville, FL · Member since 2017 · 43 posts · 19 votes9y
eeeekkk...My real estate agent peers are gonna get me for saying this but honestly I think it comes down to the investor or person regarding why some prefer to sell on their own. I showed a property just this weekend to my investor where the owners sell on their own MF units. These properties are above $300k up to $900k. They've been doing it for YEARS and you'd think with these properties an agent would be a benefit for them. It absolutely works for them. They have an amazing process. Honestly, I try to win them over every time and I always get told no. lol lol But their system works. On the other hand I've seen investors that have trouble selling a $100k property. I noticed it has much more to do with the organizational skills and resources of the owner than anything else IMO.
- Real Estate Agent · Jacksonville, FL · Member since 2017 · 43 posts · 19 votes9y
@Kara Haney If you don't see the value in having the agent then THAT agent may not be a good fit for you. There should never be a question about the value your agent is providing you.
- Investor · new york, NJ · Member since 2014 · 137 posts · 13 votes9y
thanks Dionne - but I was really wondering what they are supposed to provide - the RE exam tells you what, but not too many seem to do it -
- 9yRobert LindsleyPro MemberReal Estate Investor · Orlando, FL · Member since 2016 · 185 posts · 53 votes
I found a multifamily property on Craigslist FSBO. I didn't have an agent and neither did the seller. We figured out all the deal terms on the phone (including seller-financing) and then we brought the lawyers in. Once the PA was accepted I brought the inspectors in and we closed on the property — easy peasy!
WAY easier than bringing a bunch more people into the deal.
- Real Estate Broker · 1505 Elizabeth Blvd Fort Worth, TX · Member since 2018 · 23 posts · 0 votes8y
they don't want to pay commission and they think that they can sell their house in no time.
Santos Garcia
Fort Home Buyers
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