I use a flat rate listing agent on my flips. Cost $750 includes photographer, contract docs, and I pay 2%-2.5% buyers commission. Professional photos and gets all the MLS exposure. I take care of all the negotiations and questions are handled by me.
Keep in mind I haven't done it before but have considered when I am ready to sell would at least give FSBO a go and see if it worked and if not re-list with my realtor. Housing is in short supply especially for entry level homes and I feel most buyers are still checking Zillow as well as the listings their realtor sends them. My realtor also has a system where I give him my criteria and he has a program to automatically email me when houses that meet it come up. I think the flat rate makes sense since I would ask to see them and would really question my realtor if he wouldn't show me, especially if they are getting paid anyway. Depending on your market the savings could add up significantly but we all have to decide what we have more of time, or money because there is a tradeoff.
Flip side. I want my agents to get my sell side. I actively remind every single one you find the deal you get the listing....
It’s created loyalty, relationships and less profit per deal but I believe my overall bottom line is larger bc I get sent so many deals.
With getting so many deals I can be more selective and I have more opportunity. Just a different perspective. At the end of the day MLS visibility is what's most important and your thought process makes sense. I'd love to hear your results.
@Randy Galliani as someone who has does this before being a realtor and now as a realtor it comes down to more than making it look professional and being in a hot market. There are so many learning the hard way moments and time wasting frustrating scenarios you will face where the money you save vs time wasted and frustration experienced along the way will not make it clear why people hire a realtor. I totally respect the attempt and am happy to jump on a call to throw you as many pointers as possible to make the process less stressful.
You’re 100% correct. This is how I operate with investing clients. If someone is sourcing deals that are exclusive, by having this structure with them, they will continue to bring more opportunities to you first. As you mentioned. The logic of it is very simple to comprehend yet I’ve come across buyers in this competitive Bay Area market who cannot fathom the benefits.
Is low and People in the DMV area (D.C. Maryland, Va)
Are buying Real estate like crazy.
As @Will Fraser said, advertising it beautifully will be clutch! And to further stress the importance of pricing it well, if you undervalue it, you may end up making as much as you would with a seller's commission. Also, overvaluing it may cause it to sit and empty your pockets as well, therefore do your due diligence on the area and be realistic but confident with your pricing!
@Randy G. I'm a licensed agent and I flip houses. Full disclosure, I didn't read all the replies you received so far so some of this may be repeat, but I imagine I may take a different approach than some people have mentioned.
I would recommend you try to list it yourself and give it no more than 2 weeks. If it doesn't sell, get a listing agent. I say 2 weeks because the market will always tell you if you are getting the right exposure and if you are priced right or not. A well priced flip getting good exposure will almost always go into a multiple offers situation in less than 1 week. Zillow is notorious for bad information so be prepared to contact customer service after you list to correct any issues that pop up. Spend the money on professional photography and watch a couple youtube videos on staging. Making those photos POP will mean the difference between upwards of 10K-20K.
That being said, one thing to keep in mind is that you can safely assume you will be paying out a 2.5%-3% commission to a buyer's agent anyway so if you can negotiate with a listing agent to do a 4%-5% total if you send them all your flips, you spend an extra 1%-2% to buy back all the time you would've spent otherwise. I don't know what your time is worth, but I imagine if you flip a number of houses, your time is worth more than 1%+.
it also largely depends on how many transactions you have conducted and how savvy you are with the buying/selling process when you don't have representation.
A business partner of mine from another city always does the flat fee option to get it on the MLS and then handles everything on his own, but he has done about 20, so he is pretty familiar with the process.
DM me if you want any more advice. Hope this helps.
@Randy G. you are going to get top price if it is listed on the MLS. In many markets properties receive multiple offers after listing so a good agent will bet people to bid each other up. In general the people looking for FSBO deals are bargain hunting and know if you are selling yourself, they can get a lower price because there is no agent.
I just want to echo the importance of picking the right flat fee MLS brokerage. There are a bunch of well advertised flat fee websites out there, with beautiful websites, but if you check reviews you will see horror stories. If you can't find a brokerage with more than a hundred positive reviews, keep looking. The websites you will see first spend tons on advertising, but don't spend resources helping their sellers. You want to find the opposite-the brokerages focused on being effective for their sellers, not advertising their website. Reviews will show you the difference. It is tempting, but a very bad idea, to go with a flat fee brokerage that doesn't have a long track record of happy and successful sellers.
I have looked on Zillow for For Sale By Owners...sometimes, I can talk with the actual owner/seller. Often, the property is already under contract, or sold. Consider Zillow to be just one of the many places to check...on Facebook there's the marketplace where you can search for FSBO's. As more realtors use Facebook marketplace, there's fewer for sale by owners there and many "listed" properties. It's getting harder to find an online source for FSBO's, at least for me. I'm in Carthage, NC.
Keep driving for dollars; that's been where I have found the most "real" FSBO's. Good luck!
I sold my Austin property through Zillow "make me move" last year and it was a great experience. As folks mentioned in the thread, I offered 3% for any buyer agent.
When pricing the property, I did a lot of looking into the comps over the previous 90 days and priced my property 30k+ over any similar property in the area. Had professional photos taken. Sure enough, a couple contacted me (without a realtor) and made me a great offer. Sold the place much higher than any comps + saved the 6% in agent fees.
You do get a lot of calls that can get annoying, but nothing that you can't weather. All it takes is finding the right buyer at the right time.
Most markets right now are hot and it should be pretty easy to go the FSBO route. Just spend time doing comp analysis so you know your price, then stick to it.
Great responses! I consider myself a "friendly FSBO backup plan". Some sellers are experienced enough to sell the property without an agent. Good for them!
If they have not been able to sell it in 2 weeks, I call/contact them and see how I can help them achieve their goals.
Sometimes, they use me for information, sometimes they list with "a family friend", sometimes they list with me. Since I know how hard I work to help their goal happen, I am at peace with however they choose.
Whatever energy you put out into the world comes back to you. I have at least 3 clients in the past year that have told me that they feel like "a higher power" sent me to help and guide them.
As an investor, flipper, realtor, and citizen of my community, I seek to solve other people's real estate problems. If a FSBO is experienced enough to not need my help, then I am happy for them. There's plenty of FSBO sellers that need my help.
Investors perform many jobs... they just need to decide if their time is best spent on marketing and selling the property, or on finding/working on other deals.
Being thrifty and saving a buck is fine... think about paint. If you buy the cheap paint it's going to cost you in a lot more labor (to paint the walls 3 or more coats). When you buy the quality paint, you pay more up front yet save in labor and time because it only takes 1-2 coats.
Now, I only buy the quality paint for my flips....I know the quality/coverage of the paint, and don't want to waste time and effort trying to save a few bucks up front.