Re/Max Realty Specialists Inc.,
Brokerage Independently Owned & Operated
*Sales Representative

Blog by Krisztina Neglia

<< back to article list

The Discount Brokerage

There’s 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!!