[grt8day]

We are putting our house on the market this week, and are trying to start out as a FSBO. My sister is a real estate agent and wants to sell for us @ 3%, (she has a full-time job, not in real estate) and we are already noticing that her other committments are going to make selling our house not quite as important a task to her as we would like. So, for now we are going to give it 30-days to try to sell on our own (giving her a chance to step it up, and then having a frank, & difficult discussion with her that we may need a larger agency to step in). Any insight as to how you have managed to sell your property on your own?
Thanks,

[mcmama]

I am doing this right now. I was a realtor for some years, but let my license go due to health and personal issues - I could not keep up the business. I may go back for the training and do it again when I relocate.

If your sister is taking 3%, most of this is going to a buyer agent, and her broker takes most of the rest, depending on her split. So she is offering you a fair deal. She and her broker will assume the responsibility of advertising, listing on mls, screening potential buyers in the negotiation process, and offering some measure of control over buyer agents. If they do a thorough job, this is a good deal. If you don't think your sister can do this for you, maybe there is an agent in her office she can refer you to - she can get a finders fee for that. Actually, if she refers you to any licensed agent, she can get a referral fee. So if you do not list with her and decide to list with someone else, you might let her make the recommendation and collect the fee.

I had my first open house on Sunday. It went well. We had 13 groups of people. One couple came back to look again. Right now there is a lot of inventory in my area, so people have choices.

Watch out for the fast talkers. If someone is buying your house for cash, verify that they have the cash. Their offer should include a reasonable down payment in escrow, and should not take forever to close. And don't do one of those "we buy your house for a certain number of days" types. In the long run, you are likely better off without fancy deals.

One thing with a FSBO, you will get a lot of calls from realtors. That's fine, it gives you a chance to see how they will work. But beware of those who have seedy practices. I offered a 2% right to show to all realtors. I had one guy try to turn that into a 3% open listing agreement. If I had not worked in the business, I may have not understood the difference.

I advertised on Craigslist, Zillow, Owners.com, and several free FSBO sites. Some of these smaller sites are stealth sites owned and operated by realtors to obtain leads, so be aware of this when you use them. The most traffic came from the newspaper ad, which was expensive.

You can create multiple ads with pictures on a site called Postlets.com. I have found that many realtors I work with use this - looks very professional. Most of the FSBOs on Craigslist don't look that polished, because most of us don't know HTML. If you create the ad on Postlets, you can then copy the code to Craigslist and it looks great.

Offer a commission to buyer agents (around 2% for most areas) and invite reputable realtors in. They are all hungry right now for business, and they don't want to lose their buyers to FSBOS. Likely I will have an open house midweek next week just for agents.

I don't think those flat fee mls companies are worth it. They charge a few hundred dollars to list you in your local mls and on realtor.com. Smart realtors are looking at craigslist and ebay anyway. In many areas you will have to pay a buyer agent commission in addition to that "flat fee" at closing. If you do list with one of those, make sure they disclose to you how you are represented, particularly if their agency is the one to bring the buyer.

The people who call and say "Is your home still for sale" are realtors. This is a standard FSBO cold call line. I find that it helps to just bring that to the forefront at the beginning of the conversation - if they are confused or secretive, then I don't want to deal with them. If they don't miss a beat, then we talk about them previewing the house and possibly showing it to their buyers.

My bottom line is that if it does not sell in a finite time (I am in no hurry right now) I will list with a realtor I have done deals with in the past - I know the quality of marketing and representation she will provide.

[grt8day]

Thank you for your input. Since my sister is an independent agent- she is not working out of an office- the challenges are going to be marketing. She has a full-time job outside of the industry. So, I have already done a bit of listing this week on catalist, craigslist (with Postlets) and my hubbies work. I may just go ahead and put an ad in our local paper as well. I have gotten quite a few realtor calls! I will just play it by ear this first month and make some hard decisions by May.
Have a great day!

[mcmama]

I'm not familiar with independent agents. Does she have a broker? Because if she has a brokers license, she would likely be doing this full time.

If she's not the broker, then chances are that there are other agents in the brokers office.

But you've done the right things to attract attention, and make judgements for yourself.

[fostermommy]

We have sold our two previous homes without a realtor, and have no experience in real estate. It was GREAT!!! Both times, we simply paid for an ad in the newspaper, put a nice FSBO sign in the yard with flyers, and did not list on MLS or entertain any realtors. We did have realtors come in before we put the sign up, and they did a fair market analysis. We listed both homes for more than the realtors would have listed them. Both sold for almost full price. We did have to be very patient - both took at least 3 months. But we saved a boat load of money. We did have a real estate attorney provide us with the necessary forms and finalize the transaction. If you're not in a hurry, shoo those realtors away and be patient. We told the realtors that we would not consider selling through a realtor until a certain date. We encouraged them to contact us after that date, but not before. We told them if they called before that date, we would not use their services period. Sounds mean, but saved us a lot of trouble. One of our buyers was nervous about the lack of a realtor, so we told him he could bring in his own realtor to negotiate the paperwork, but he would have to pay her fee. He did it, and bought the house.

[mcmama]

Used to be that FSBOs were priced UNDER the market. Now most of them are priced OVER the market, at least in my area.

It's important to know the difference between the realtor who really has a buyer, and the one who is just cruising for the listing. This is why I have told realtors that they do not have a shot at the listing - I have already decided who would list if it comes to that, based on previous deals over many years - but if they have a buyer, they can fax or bring their right to show forms and I will honor those at 2%. Because I personally know so many realtors in this area, I only have let the ones I really know preview the house at any time other than an open house. Their particular buyer might not be interested NOW, but they may find a buyer later and knowing what the house looks like and if it fits that buyer is good. Some buyers are afraid to approach a FSBO on their own. Some are aggressive about it, but really don't know what they are doing.

In my area, getting the buyer to agree to pay the commission generally will not fly. The seller pays in one way or another. It would be advantageous however, if the buyer understands that they are paying the same amount for the house - but by cutting the commission they pay directly to the agent off the sale price, the state taxes the seller a bit less at closing.

I am, of course, in NJ to be thinking of what the state will add onto closing costs in hidden "transfer fees". Where are you folks? What is the market like where you are?

[grt8day]

Thanks fostermommy for sharing your experience. Hubby was encouraged when I read him your response.
mcmama- we are in Southern California, it is a very difficult market here. There is one foreclosure on my block. I had a agent call me today offering a FSBO program he has whereas he has figured:
If the seller finds a buyer to purchase the property without help from a Real Estate sales person the Listing Agent will service both sides of the transaction completely for only 1% of selling price.

If listing agent finds his own buyer to purchase the property the commission will be discounted to 2% per side or 4% total for both sides.

If listing agent sells the property with the help of a buyer agent, the commission will be 2.5 % for the Listing Agent and 2.5 % for the buyer agent for a total of 5%.

So, for now I am still leaning toward continuing on with FSBO- Sister, who was going to call me back last Saturday about selling my house still has not called. So, I am thinking this is a good thing now. Let's me know, what I can expect from her as far as committment and follow through. Sorry if I sound harsh!
Thanks for all the wonderful insight and experience--- it sure is helpful.

[mcmama]

The 1% is dumb. It is only going to be transactional agency, and that kind of representation in a negotiation is not worth 1%. Also your buyer may not like it.

The 4% is a good idea. That's about the lowest anyone can take for dual agency. In California, do you have dual agency, or does it revert to transactional agency? Even if it does, there is rappoire and incentive to sell.

The 5% is reasonable as he will likely be expected to pay 2.5% to a buyer agent and deal with more negotiating as the deal goes forward.