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Listing with a Broker or For Sale by Owner?

RYU

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Maybe more for the Socal folks... I'm pondering the whole rent vs. sell scenario for the man-cave. What % are you guys paying the seller's broker in terms of their fees? I've gotten quotes from 4% - 6%.

I have a lot of equity in my home (will not be a drawn out short sale) and it's desirable due to a soup to nuts renovation 2yrs ago, though not the white elephant in the neighborhood. I think it should sell relatively easy and given the lack of inventory out here it makes me curious how much work these brokers are really putting into the sale of a property with my profile. 6% seems high.

Because ~5% works out to be A LOT of $ out of my pocket i'm pondering selling this myself. Second question..Who's gone thru that process?
 
I'm sure a lot of brokers these days are willing to work with the sellers these days. If you're not in a hurry to sell why not try to list by yourself first. If it doesn't sell in a couple months then go with the broker.
 
I'm sure a lot of brokers these days are willing to work with the sellers these days. If you're not in a hurry to sell why not try to list by yourself first. If it doesn't sell in a couple months then go with the broker.



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The main thing I'd expect from a broker is someone to deal with all the paperwork and legalities. Selling a house is a complicated business, and frankly I would have neither the time nor expertise to do it. I would certainly try to negotiate the commission, but I wouldn't attempt it all on my own.

YMMV, of course.
 
Go FSBO and hire a lawyer

you never need to actually meet the buyers, have the lawyer handle the deal

pay someone to show the house by appt... can be anyone you want

simple transaction if you have a well-qualified, knowledgeable buyer

..and the lawyer also gives you the protection of attorney/client privilege

you don't get that with a real estate agent, just a fiduciary promise
 
I am selling a home in Oregon in a private party transaction. we were directed by our Oregon atty to a reputable, local RE broker who is providing and managing the paperwork and process for the transaction for a $1,000 fee. because we already had a buyer, our local CA atty (also a licensed RE broker) suggested this approach.

YMMV.
 
Better advise is to list it with a flat rate listing service in your area.
They will ist your home with MLS and you do the rest of the marketing yourself. If you do Google search you can find a listing service in your area.
 
I'm a r.e broker here in FL for 14 years.
You can go FSBO if you have experience in R.E.
The main goal is to C.Y.A in this business. With a good broker, he or she will do just that.
Offer a good broker 5% and some cash bonus to buyer's agent.
This will insure that you will have broker representation and the buyer's agent will also bring in top dollar for your home.
There are so many ways to slice this cake.
Bottom line is... NET Proceeds to SELLER. PM me if you need more details on how to go about this.

GL
Huy
 
CA is not an atty state for RE transactions.

Terrible advice on this thread, seriously.


Oh duh... this is in SoCal

ignore anything I said, ya'll got weird laws out there
 
I'm a r.e broker here in FL for 14 years.
You can go FSBO if you have experience in R.E.
The main goal is to C.Y.A in this business. With a good broker, he or she will do just that.
Offer a good broker 5% and some cash bonus to buyer's agent.
This will insure that you will have broker representation and the buyer's agent will also bring in top dollar for your home.
There are so many ways to slice this cake.
Bottom line is... NET Proceeds to SELLER. PM me if you need more details on how to go about this.

GL
Huy

Everyone is entitled to their own opinion. I do not agree with any of GL's comments. Most agents are not really going to help you in marketing beyond the MLS. You are not typically dealing with brokers and most are not current on internet marketing techniques. you would be better suited to create your own net marketing campaign and obtain MLS results thru a flate rate service costing a few hundred dollars.

If you are half as smart as I think you are this will get you better results fro far less money.
 
Thanks for your input everyone. Here are some open questions I have to perform further research on.

1. What does it take to list a properly on the MLS? Is there one MLS service which proliferates to other listing services or do I need to do them all? I don't mind paying a fee for this. I'm reminded of the early days of the internet when one had to submit a form to all search engines promoting your own website. Now they have services to pay for that. Hoping the same for the MLS.

2. What are the good self-listing websites? Redfin? Buyself.com? Will these show up in most buyer's broker's searches?

3. What exactly will my duties be as a 'For Sale by Owner' self representative? Will I need to find/choose my own title company? Will I need to find/choose my own Escrow service?

4. It's my understanding that here in California, it's customary for the buyer's agent (if there is one) to split the commission fees with the seller's agent. In most cases that's half of the commission fee (3-6%). Will I need to pay out of pocket to the buyer's agent? Setting aside the fact that they will not promote your home to their clients if they have no commission, What if I refuse? I may have answered my own question.

I definitely have some more research to do. I'm not afraid to go into this myself and I feel once I commit to the decision i'll be diligent about it. Just trying to weigh out the options and it may be a matter of having extra time to do so vs. money lost in fees. Thanks again.

EDIT TO ADD: What kills me is that 6% works out to be A LOT and I don't find it appropriate for the amount of work (or lack thereof) that broker's do. I might be completely ignorant of what seller's brokers do here in CA so if any brokers out there would like to help enlighten on what exactly all that money goes towards I would greatly appreciate this. I've bought 2 homes prior to this (never sold one though) and I just don't see it. Unfortunately, i'm of the mindset that I have a relatively desirable property (at least in my blind eyes), near the beach, inventory is low, interests rates are low, i'm an equity owner in the place, and will decide quickly for an easy sale. There shouldn't be much "hair" on this transaction at least from the seller's side.
 
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Everyone is entitled to their own opinion. I do not agree with any of GL's comments. Most agents are not really going to help you in marketing beyond the MLS. You are not typically dealing with brokers and most are not current on internet marketing techniques. you would be better suited to create your own net marketing campaign and obtain MLS results thru a flate rate service costing a few hundred dollars.

If you are half as smart as I think you are this will get you better results fro far less money.

Wow... what an expert you are. :wink:
 
No agent will show a FSBO property.

5% is the max.
 
Thanks for your input everyone. Here are some open questions I have to perform further research on.

1. What does it take to list a properly on the MLS? Is there one MLS service which proliferates to other listing services or do I need to do them all? I don't mind paying a fee for this. I'm reminded of the early days of the internet when one had to submit a form to all search engines promoting your own website. Now they have services to pay for that. Hoping the same for the MLS.

2. What are the good self-listing websites? Redfin? Buyself.com? Will these show up in most buyer's broker's searches?

3. What exactly will my duties be as a 'For Sale by Owner' self representative? Will I need to find/choose my own title company? Will I need to find/choose my own Escrow service?

4. It's my understanding that here in California, it's customary for the buyer's agent (if there is one) to split the commission fees with the seller's agent. In most cases that's half of the commission fee (3-6%). Will I need to pay out of pocket to the buyer's agent? Setting aside the fact that they will not promote your home to their clients if they have no commission, What if I refuse? I may have answered my own question.

I definitely have some more research to do. I'm not afraid to go into this myself and I feel once I commit to the decision i'll be diligent about it. Just trying to weigh out the options and it may be a matter of having extra time to do so vs. money lost in fees. Thanks again.

EDIT TO ADD: What kills me is that 6% works out to be A LOT and I don't find it appropriate for the amount of work (or lack thereof) that broker's do. I might be completely ignorant of what seller's brokers do here in CA so if any brokers out there would like to help enlighten on what exactly all that money goes towards I would greatly appreciate this. I've bought 2 homes prior to this (never sold one though) and I just don't see it. Unfortunately, i'm of the mindset that I have a relatively desirable property (at least in my blind eyes), near the beach, inventory is low, interests rates are low, i'm an equity owner in the place, and will decide quickly for an easy sale. There shouldn't be much "hair" on this transaction at least from the seller's side.

From my experience:

1/2) Flat rate services can do it for just a few dollars as I previously stated.
3) You can hire someone to show the property for you. I pay an employee.
Place an add on CL and I am sure you can find someone quite inexpensively.
4) Commisions are not a set amount. You can pay any amount you think will accomplish the task. I set mine at 3% and in a tough realestate marketplace
that is more than enough incentive. Remember, when you are listing a home
thru an agent you are typically offering to pay a commision to both the listing agent and the selling agent. If you list the home yourself you have eliminated
one party in the transaction and their percentage. There is some discussion in real estate circles about offering a higher percentage to the selling agent then the listing agent. That all makes sense in a fast moving marketplace.
The current marketplace is primarily only fast moving in bank sales and low end fixer uppers being purchased for rentals. Mileage may vary in your area.

Once you have a buyer in-hand a decent title company can help you with much of what needs to do to consumate the sale.

GL, My sister, brother, brother in law and sister in law are all brokers.
Your comment is not appreciated and not appropriate. I have been marketing my own properties and I know what I am doing.
 
Thank you Steven. Appreciate the advice.

Your most welcome. Do not get me wrong FSBO is not everyone and many individuals are better served by professionals assisting them. However, if you are feeling self-empowered there is no reason FSBO cannot work for you.

Good luck!
 
My house has been For Sale By Owner for 3 years. I bought the $450 kit.

I've had nothing but scrubs calling wanting to rent or rent to own.

It's worthless.

We'll be calling a realtor next week.
 
Steven, don't you have your property in Sequim, WA listed FSBO? And hasn't it been listed for years now, even here on Prime?

I see many FSBOs marketed poorly. Bad photos, missing or incorrect information on the MLS listing, never updated or repriced to keep it fresh, etc. And like SWIFTVISION says, no agent will show the property. The FSBOs that I've kept tabs on have sat forever and have eventually sold for way less than they would have if marketed correctly. They're initially priced higher than they should be and are listed much too long with waning interest, when often homes should be priced just under market value to generate competition. Ever go to an auction for property, like a foreclosure, tax, or probate auction? Often, properties sell for more than they should due to the bidding. And that happens with people who generally know what they're doing vs. the average buyer.

Most action on a property is within the first two weeks it's listed, and one that is priced correctly and marketed correctly will have a minimum of 8-10 showings a day during that time. That's a lot of showings for someone to be at your house for a couple weeks.

How would you hire someone to show the property anyways? Some slapdick off the street who'd be eating Cheetos in your kitchen when buyers show? In LA, you'd have the Supra key system where you could keep track of who looks at your property so you don't have to be there or worry about stolen property. If it were vacant you could just use a basic lock box, but I wouldn't suggest that otherwise.

But aside from marketing, your agent's job is to help you negotiate the sale and to handle the transaction, i.e. make sure your ass is covered when things go sideways. What will you do when a buyer hammers you with a tough inspection or low appraisal? You're legally obligated to disclose these things to future buyers. And did you have any backup offers ready? I don't think you've experienced a "hairy" transaction yet.

Right now, school's about to end, summer and the prime home buying season is about to start, and there's about half the inventory on the market than in years past. There's demand, and with the right marketing and pricing you could have buyers bidding on your property, with you sending out multiple counters asking for the buyers' best and final offer. So my advice, if you're serious, is to not waste your time trying to save a few bucks when it will cost you time, energy, and money in the long run.

Good luck on your sale RYU.
 
well said...

Steven, don't you have your property in Sequim, WA listed FSBO? And hasn't it been listed for years now, even here on Prime?

I see many FSBOs marketed poorly. Bad photos, missing or incorrect information on the MLS listing, never updated or repriced to keep it fresh, etc. And like SWIFTVISION says, no agent will show the property. The FSBOs that I've kept tabs on have sat forever and have eventually sold for way less than they would have if marketed correctly. They're initially priced higher than they should be and are listed much too long with waning interest, when often homes should be priced just under market value to generate competition. Ever go to an auction for property, like a foreclosure, tax, or probate auction? Often, properties sell for more than they should due to the bidding. And that happens with people who generally know what they're doing vs. the average buyer.

Most action on a property is within the first two weeks it's listed, and one that is priced correctly and marketed correctly will have a minimum of 8-10 showings a day during that time. That's a lot of showings for someone to be at your house for a couple weeks.

How would you hire someone to show the property anyways? Some slapdick off the street who'd be eating Cheetos in your kitchen when buyers show? In LA, you'd have the Supra key system where you could keep track of who looks at your property so you don't have to be there or worry about stolen property. If it were vacant you could just use a basic lock box, but I wouldn't suggest that otherwise.

But aside from marketing, your agent's job is to help you negotiate the sale and to handle the transaction, i.e. make sure your ass is covered when things go sideways. What will you do when a buyer hammers you with a tough inspection or low appraisal? You're legally obligated to disclose these things to future buyers. And did you have any backup offers ready? I don't think you've experienced a "hairy" transaction yet.

Right now, school's about to end, summer and the prime home buying season is about to start, and there's about half the inventory on the market than in years past. There's demand, and with the right marketing and pricing you could have buyers bidding on your property, with you sending out multiple counters asking for the buyers' best and final offer. So my advice, if you're serious, is to not waste your time trying to save a few bucks when it will cost you time, energy, and money in the long run.

Good luck on your sale RYU.
 
PVMike... you should be in Real Estate. :smile:

Steve Allen... key words "My sister, brother, brother in law and sister in law" :wink:
 
...So my advice, if you're serious, is to not waste your time trying to save a few bucks when it will cost you time, energy, and money in the long run.

Good luck on your sale RYU.
That's the thing though... i'm looking at a potential broker's payout of ~$50k. That's not exactly a few bucks for someone starting out like me. I definitely appreciate the "insurance" factor of using a broker where in IF something was to go wrong you want an expert at the helm. I'm simply having a hard time placing an appropriate value on this service that seller's broker's provide. 3% perhaps will be acceptable but everyone seems to be holding firm at 5-6%. It's like there's a secret RE Broker labor union in control. It's driving me nuts. You're the first one to mention some of the potential pitfalls in FSBO and I appreciate that. Thank you.

I've used brokers many times and I believe in the service however, this was always from the buyers side of the table. It's a much different viewpoint from the seller's side. If I was completely clueless it would be an easy decision. However, I would clasify myself as knowing enough to be dangerous. It's not an easy spot to be considering the $$ involved.

I've got 2 more weeks to decide. :confused:
 
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That's the thing though... i'm looking at a potential broker's payout of ~$50k. That's not exactly a few bucks for someone starting out like me.

I understand your reluctance to pay a hefty commission for a job that doesn't seem to require highly skilled labor (I would like to see a structured realtor fee that is based on hours worked rather than a % of the sales price, but that's another rant). I sold my parents' investment property here in AZ, as well as my previous home, by myself using a variety of tools (FSBO sites, open houses, craigslist, but no MLS). However, that was toward the end of a seller's market (2005). I'm not so sure how well I'd fare in a buyer's market like we have today--with so much competition and picky buyers. I could spend so much time doing showings and dealing with unqualified buyers that it may not be worth my time. The other thing you have to consider is that most buyers will factor in a 3-6% discount in their offers because they assume you're going to pass the savings along to them.

That said, I don't get all the aversion to showing the home yourself. I understand that if you're an emotional seller, it may pose problems, but as long as you're being rational about things and treat the sale like a business transaction, things should be fine. I guess many people aren't capable of doing that. :rolleyes:
 
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