All Forum Posts by: Jonathan Minerick

@Jesse Smith Very good question. You are correct, it doesn’t seem right. I think you have to look at how real estate has evolved to find the answer.

Pre-Internet, buyers had little idea what was for sale unless they went to a real estate agent. If your listing agent did not offer a commission to the buyer agents, you can bet that buyer agent was not telling the buyers about your home. By offering a commission to buyer agents, your listing agent turned those buyer agents into a direct sales force for your home.

To your point, times have changed. This is one area that has not kept up, but many believe things could be (and should be) changing.

A similar question that I hear from sellers is, why am I paying a big commission to a listing broker (for example, 6%) when all they do is list the home on the MLS, offer half their commission to buyer agents, and wait for a buyer agent to find the buyer?

We send our customers in need of contract review to Gennady (Tom) Shnaider. He is a real estate attorney and also a broker, and is based in San Diego. He understands real estate and has reasonable rates.

You should be able to skip using an attorney and just get a transaction coordinator "TC" to handle all the paperwork. The TC will ask you for the terms and should be able to generate the paperwork. They do many more transactions than the typical agent or attorney, and many are even licensed as agents themselves.

Take a look at doing a "flat fee MLS listing". The hardest part about FSBO is exposure. Zillow is great, but realtor.com, redfin, broker sites, and most importantly, incentivizing the buyer agents via a commission offer on the MLS, are all going to drive a lot more traffic than Zillow alone. 90% of buyers have an agent. You don't want to miss out on those buyers - many agents don't show homes not offering a commission on the MLS.

@Chandler Canepa Similar to what Chandler is saying, you can listed on the MLS with a "flat fee MLS listing" for ~$100-$200 in many areas. Also look at getting a transaction coordinator, who will be able to make sure you get all your paperwork done correctly for ~$400. There are a lot of ways to save money in a sale without losing much in terms of quality and support.

Google "flat fee MLS" + your city and you will find quite a few. Check their Yelp! and similar reviews. While there are some shady characters out there, just like in every industry, there are a handful of very reputable ones.

US Legal Forms sells a contract/disclosure package for $60. https://www.uslegalforms.com/fl/FL-HOME.htm

In California you can use the free FirstTuesday forms: http://journal.firsttuesday.us/forms-download-2/

@Animesh Das You should be able to find a transaction coordinator who will guide both you and the buyer through the sale. The cost will be ~$650. They will handle the paperwork, as long as you can provide them the terms/specifics.

The way listing a home typically works: 

- Seller Broker signs a listing agreement with Seller. 

- Seller agrees to pay 6% commission to Seller Broker. 

- Seller Broker places the home on the MLS and offers Buyer Brokers half of the commission (3%) for finding Buyer.

IF Seller Broker finds Buyer and everyone agrees to allow Seller Broker to represent both parties (known as "dual-agency")

- Seller Broker keeps entire 6% commission.

Dual-agency is illegal in many states, but not California. Clearly there is a lot of incentive for Seller Broker to find Buyer. 

In some cases, Seller Brokers may offer a very low commission to Seller side (e.g. 1%) in the hopes of also representing Buyer, where they make more commission (e.g. 3%). This can cause a conflict of interest, as Seller Broker is incentivized to push offers from their own Buyer ahead of offers from other Brokers representing Buyers. It is also very difficult to represent the best interests of Buyer and Seller at the same time.

@Adriel Liwag Awesome job, thanks for being willing to share.

@Blair Poelman @Aaron Hunt 

"FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $190,000 in 2017 (up from $185,000 in 2016), and still far lower than the median selling price of all homes at $249,000."

I think the issue with the above sentence from NAR is that it leads many to think its an apples-to-apples comparison, where it's clearly not. If you could truly buy a FSBO homes at 24% below it's true market value, then everyone would just buy FSBO homes (or buy and then resell with an agent).

As many investors on here would agree, most FSBO homes are over-priced compared to comparable homes.

Also, I think the terms FSBO and Flat-Fee are being conflated. FSBO in the strict sense means no agents involved whatsoever. When you list on the MLS with a flat-fee service, you are no longer FSBO and would not be included in NARs study as a FSBO.