FSBO or utilize real estate agent to sell property?

Buying & Selling Real Estate
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FSBO or utilize real estate agent to sell property?

Nancy N.
On the road. · Member since 2017 · 35 posts · 9 votes

Seems challenging getting a real estate agent to provide comps for my property. 1st agent: lsit for $650k, 2nd agent: list for $680k, 3rd agent: list for $750k, and asked "would I consider getting an appraisal". (some of the back story regarding these agents, leads me to believe I'll do ok listing FSBO).

Would you list on FSBO or hire an agent?

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Brian Pfaehler
Investor · Trafalgar, IN · Member since 2016 · 95 posts · 58 votes
8y
All the agents on here will try to get you to drink the Kool-Aid and vice versa. If you feel comfortable selling it yourself, go for it! It’s really not that complicated....good luck!
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  • Brian Pfaehler
    Investor · Trafalgar, IN · Member since 2016 · 95 posts · 58 votes
    8y
    All the agents on here will try to get you to drink the Kool-Aid and vice versa. If you feel comfortable selling it yourself, go for it! It’s really not that complicated....good luck!
    5Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    8y

    I'm with Brian, but I love how people that ask this question never mention their experience level.

    Since you're in WA- I'll ask if you know what Form 17 is? If you dont complete one, you open yourself up to being sued and your sale won't be valid. Don't even think about missing a lead paint, well or septic disclosure either.

    What will you use for offers? How will you counter and with what addenda and attachments? FSBO buyers will have an agent most of the time. What then? Better yet, what if they don't and neither one of ya knows how to do a psa?

    I get your idea and have sold many solo, but I invested time and energy into knowing how.  Good luck either way.

    3Reply
  • Eric C.
    Investor · Grand Junction, CO · Member since 2017 · 207 posts · 201 votes
    8y

    Do FSBO but partner with a real estate attorney or good title agency to make sure the sale is done properly.

    4Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

    Thank you everyone and you're all correct. I know the forms and as I subscribe and read on inman.com home owners know the area and property the best. I have that fear factor Chris Voss speaks of and I recently heard an investor say, "the first offer is usually the best offer". I may consider adding to the listing, "owner may consider slight commision to buyer agent". Any comments to this? You're all very helpful. Thank you bigger pockets and members on this platform for schooling me. 

    0Reply
  • Brian Pfaehler
    Investor · Trafalgar, IN · Member since 2016 · 95 posts · 58 votes
    8y
    I always include that I will work with a buyers agent...realtors will not bring a buyer to your home without it. Many won’t anyway just to protect their “kingdom”. Good luck!
    1Reply
  • Sean Tabor
    Rental Property Investor · Flint, MI · Member since 2017 · 17 posts · 19 votes
    8y
    I got tired of other agents, so I Invested in getting my own license. My total investment was <$1,000 and I learned quite a bit about my states laws and the proper process. Plus it opened me up to a second income stream as friends and family call me to give them a hand. Look into the process. Even if you don’t go full time into it, it’s worth it.
    2Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

    Mr. Sean Tabor, Thank you. Solid advice...An endevavor I will pursue.👍🏻

    0Reply
  • Brandon L.
    Real Estate Agent · Falls Church · Member since 2012 · 2k+ posts · 1k+ votes
    8y

    @Nancy N. do you have a lot of free time on your hands?

    0Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

    Hi Brandon, nice to meet you. I do. I was just reading inman, 11 reason not to list FSBO and one of the reason's was the time it requires to show property.

    0Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    8y
    Originally posted by @Nancy N.:

    Hi Brandon, nice to meet you. I do. I was just reading inman, 11 reason not to list FSBO and one of the reason's was the time it requires to show property.

    The same amount of time is required to show the property as leaving the property when an agent wants to show it . 

    If I had a house for sale for $680,000 I could find the time to show it myself especially at a 6% savings .  

    1Reply
  • Brian Pulaski
    Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
    8y
    Originally posted by @Nancy N.:

    Hi Brandon, nice to meet you. I do. I was just reading inman, 11 reason not to list FSBO and one of the reason's was the time it requires to show property.

    I have only been to a few showings when doing FSBO. 95% of the showings had their own agent and didn't want me there.

    0Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

    I clearly understand the duties involved. I'm not sure yet which way to go. I'll keep group updated as I move forward. N'

    0Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

    Matthew Paul, I'm with you...that's a nice chunk of change. Thank you for good advice. 

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    8y

    @Nancy N. At that price, most buyers will have an agent, so you need to at least be willing to pay the buy-side agent. And they are going to expect more than they would with an MLS listing, knowing that they'll likely have to do more work to take care of at least part of your side's work too. So your savings isn't going to be +5%, it'll likely be closer to 0.5%-1% (5/2 = 2.5 + 1.5 extra). If you get an unrepresented buyer, they will know your savings and will expect you share that with them, so you'll be in the same boat as my previous statement.

    The exposure and advice/negotiating skill is well worth the 1% extra you'll pay an agent. If you were talking about a $50k property, this conversation would be different. 

    BUT...

    Don't chose your agent based on their suggested list price. It doesn't matter what they say they can sell it for, it matters what they CAN ACTUALLY sell it for and what it'll APPRAISE for. Ask for the comps. Ask what they do to market your listing. Then review - if every other house has sold around $680k, how does agent #3 figure he/she can get $750? The answer is they won't. They'll get you under a listing agreement and then push you gradually to lower your price, which will actually lead to a lower sale price and more time on market to get it. Go based on the comps, not what someone "feels/says".

    0Reply
  • Dave Homyak
    Investor · Ann Arbor, MI · Member since 2016 · 71 posts · 56 votes
    8y

    @Matthew Olszak, how many FSBOs listed above $600K have you gotten 5% on? I just don't see that happening. Let's open it up to all the realtors that read this thread. Anyone get 5%.? If so, what percentage of the time does that happen? What is the most you've gotten from a FSBO?

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    8y

    @Dave Homyak, 5% around here is normal for under $1MM for both sides. So 2.5% list agent, 2.5% buyers agent, doing a standard listing.

    If you go FSBO, at that price the VAST MAJORITY of buyers will have an agent, and that agent will want to be paid. But they won't want the 2.5%, because they know they'll have to hold the seller's hand to get the transaction closed as the seller doesn't have an agent, even though they aren't the seller's agent. As such, most will ask for 3.5%-4.0%. OR, the buyer will pay that, but will lower their offer accordingly. So total savings is around 1%.

    IF by chance, you get a buyer in that price range w/o an agent, that buyer will have enough knowledge to know you as an FSBO are saving 5-6%, and will want a slice of that, hence why they themselves aren't using an agent. So you'll be in the same place. The perceived savings of going FSBO isn't a secret, simply to most buyers it signals an uneducated seller they can lowball.

    For very low-price properties, you can get away with both parties not using an agent, but its rare to happen at $250k+.

    Anyone who balks at the services of a solid, proven agent for a 1% savings isn't running their REI as a business. A business is about delegating, and if you end up doing everything yourself, well you've simply bought yourself a job.

    1Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

    Greetings Matthew, "They'll get me under a listing agreement and then push me gradually to lower my price...Last RE agent @$750K was honest to ask me, "would I consider getting an appraisal". As I understand it appraiser considers comps and the use/type of property is this correct? This is intellectually stimulating. Thank you everyone!

    0Reply
  • Matthew Olszak
    Real Estate Broker · Chicago, IL · Member since 2015 · 1k+ posts · 2k+ votes
    8y

    @Nancy N. Be aware however, that your appraisal will have no effect on the buyer's loan, another appraisal will be ordered. An appraisal is just a professional opinion, so every appraiser can see the value differently (although they should be "close" to one-another). Usually we recommend an appraisal to a seller who isn't realistic, in order to support our CMA (broker's valuation based on comps). But as long as you are receptive to the comps, it shouldn't be necessary to shell out $500 for an appraisal, that's part of why you hire an agent. They don't need to just determine a value, but be able to discuss/support it with comps, then discuss the strategy of where to list at to get you that value. Good luck whichever direction you go!

    0Reply
  • Account Closed
    Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
    8y
    Originally posted by @Nancy N.:

    Seems challenging getting a real estate agent to provide comps for my property. 1st agent: lsit for $650k, 2nd agent: list for $680k, 3rd agent: list for $750k, and asked "would I consider getting an appraisal". (some of the back story regarding these agents, leads me to believe I'll do ok listing FSBO).

    Would you list on FSBO or hire an agent?

    Personally I like the Stanwood area. As a professional investor I would consider buying from a FSBO. (In fact, I do buy FSBOs on a regular basis.) However, Boeing engineers and other professionals who can afford that price range, are going to be using a real estate agent. Real estate agents aren't going to contact you since they believe it will be too much trouble to work with a FSBO in that price point. People don't have the time or the experience to put together financing for $650k on their own, you will need to direct them. They think only professionals can sell real estate (think "limited world view) and everyone is going to question how you came up with your asking price. The bank will make sure an appraisal is done and you have to decide what your response will be if they come in low. You get to show people through your home, at inconvenient times. People will not be forthcoming about their reactions since they don't want to hurt your feelings. You won't know how many times to recontact interested buyers without alienating them or losing the sale and you probably won't know how to get the sale to close.

    Other than that, go for it. 

    (No, I am not a real estate agent. I buy all my homes without an agent and I sell almost all of my homes without an agent, as I have done for some 25 years.)

    0Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

    Mike M, yes indeed. According to banker, "Predicted strong growth for next 8 years, Everett next Bellevue", very cool. Thank you everyone for sharing your experience with me. (sometimes one needs to get their own foot off there neck). Hey...Thanks y'all. 

    0Reply
  • Julian Sibley
    Lender · Everett, WA · Member since 2017 · 104 posts · 59 votes
    8y

    @Nancy N. If it seems challenging to get a real estate agent to provide comps for your property, there are either not many available (Typical in Western WA), as well as you might be working with a bad agent(s). I agree with @Matthew Olszak that an appraisal is unnecessary, you won't be able to use it on the buyer's purchase so it is truly your own cost to educate yourself on your home (which hopefully you already know what it is worth).

    I personally use agents, but I'm very conservative and get to see the pros and cons on both sides. For example, recently we were working with a borrower who wanted to sell a vacation home they inherited and use the proceeds to purchase a new home (Working with an agent). They then decided in the middle of listing their vacation home to sell their current primary residence (not using an agent), for some off reason their buyer disclosed their appraisal to them, and it appraised over $50,000 higher than what they agreed to sell it to them for. So by saving 3% and going against the plan they saved around $20,000 on listing their home but the real loss was actually the potential $30,000 upside because they were in-experienced and agreed to sell their home for less than it was worth.

    What it really comes down to is opportunity costs. If you are experienced and don't mind doing everything to get the sale done, then FSBO. If you are in-experienced and think it would be better handled by an agent, then you're probably right. At the end of the day a FSBO might save you 3% (as mentioned previously, you won't get buyer's agents to show your home if you aren't offering 3% at least) but i prefer to cut a check and not have to deal with the stress. I could change my oil and do all of the basic maintenance on my car as well, I just prefer to pay someone to have it done right the first time.

    That's just my $0.02, I've seen good and bad experiences, go with your gut and let us know how it goes!

    0Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

     Julian, valuable info. Thx. I'm in talks with agent number 3. I can't express enough how much I apperciate this platform, the open honest folks here. Very cool.

    0Reply
  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y

    The decision shouldnt be between Agent and FSBO....it should be between Good Agent and FSBO. The general public though can have a hard time distinguishing between a good agent and a bad agent.

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  • Fahima Hilal
    Real Estate Agent · rutherford, NJ · Member since 2015 · 122 posts · 33 votes
    8y

    Nancy,

    If you go the FSBO route, make sure you have your attorney/title company to get your back.

    If going the agent route:  

    What you should ask your listing agent, is the list of homes in your area that are similar in style, no. of beds, baths, garage space, sq footage etc. , that sold within the last 6 months. WIth that comparable, you can arrive at a fair price for your house. I would suggest you list it slightly below the market price to attract more buyers, hence more competition, and ultimately a better price. Hope that helps somewhat If you are not listing, but offering a commission to a buyer's broker , mention the commission percentage in your ads. Or agents would not be interested.

    Good luck!

    0Reply
  • Nancy N.
    OP
    On the road. · Member since 2017 · 35 posts · 9 votes
    8y

    Fahima, thank you very much. No parcels match this 5 acres, 2 homes, one is Airbnb. Individually metered, separate propane, separate septic and built as an "aging in place" home with Digital Health installed by Grandcare™. Yes I would offer 2% to buyer agent, in this market (Pacific NW) agents don't have to do to much work and then we have Blue Match, Homie and Faira competeing, oh yes and now Zillow ibuyer. Curious to see if Zillow will be granted NWMLS in this DOJ review...Is that this week?

    @Russell Brazil...EXACTLY! I want an agent who is dynamic, knows the growth potential, understands the rental market, not affraid of Digital Health and doesn't have an ulterior motive. I'm debt free, no mortgage, nothing thx. to Ramsey in 1980, so I'm ok with this property taking up to 77 days. Side note: Rental came up today 2 bdr. 1 bth. renting for $1750.00 in this area. I scrath my head. Thank you very much everyone.

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