The Discount Brokerage
been a lot of chatter lately about Discount Brokerages and For Sale By Owner,
so I thought I would give you all a little reality check on the process. First
off, what can you expect? There are various services offered, depending on the
level and price point you choose – for example, you can select an MLS listing
and nothing else. But remember, MLS is simply one minor tool in the toolbox for
selling a home. And if an Agent chooses to show your home to their Clients,
they will be dealing with the homeowner directly. There will be minimal
staging, no marketing and no discussion of Fair Market Value. And as I’ve said
many times before, Agents and potential Buyers do not like seeing a property
with the homeowner on the premises. It makes Agent/Buyer discussion difficult
and also opens up the door to potential personality conflicts with the Owner.
In my experience, 90% of the traffic at an FSBO (For Sale By Owner) home will be
Agents looking to list the property when the owner tires of the FSBO process.
Also, in my experience, 75% of FSBO properties will eventually list with an
Agent. 5% will take their home off the market because they can’t get their
dream price. That leaves roughly a 20% success rate. Not great, depending on
the time and effort put in. And – reality check time – often those deals that
are made net less than if the homeowner had listed with a reputable Agent. I
have recently completed a deal in the mid-400’s in the North Oakville Real
Estate area with an FSBO and I believe the Owner could have netted $10,000 more
if they’d had an Agent. As a Real Estate Agent, it is our due diligence to work
for our Client – and in this instance, my Client was the Buyer. Remember,
commission is not the be-all and end-all, it’s the net that matters. So for all
FSBO clients, beware the multiple services you select. Under-pricing is as much
of a mistake as overpricing. Overpricing can lead to multiple price reductions
and in the end, can lead to a purchase price at lower than Fair Market Value.
And FSBO people need to understand that many Agents will avoid your listing, because they’d rather deal with another Real Estate Agent because it will mean a clean, honest and easier transaction. I will always show my Buyer Clients FSBO homes if they meet our search criteria, but even I am not keen on these transactions. Sellers need to understand that good Agents make a choice on the homes they show and even Buyers make a choice. (I have had some Buyers refuse to look at FSBO homes.) The bottom line: a knowledgeable Agent will research and understand Fair Market Value, they will market and stage the home and they will ensure a smooth transaction process. Often it is their reputation that encourages other Agents to bring their Buyer Clients to that listing. They trust them, they trust their pricing and they know there will not be any unreasonable negotiations. We are well-paid professionals who take our role seriously, and ultimately, we’re looking to create a ‘Happily Ever After’ for Buyers and Sellers!!