Nothing makes a Realtor see red like a FSBO (For Sale by Owner). Fizzbo. For Sale By Owner. Grrr. There goes another juicy commission, right out the door!
Well, not quite. Actually, a savvy Realtor will look at a FSBO like an opportunity ripe for the plucking – because most FSBOs will eventually end up listing with a Realtor after they give up in frustration trying to sell their home on their own. So going FSBO is kind of a like a huge neon sign saying, “Hey Realtors – come convince me to list my house with you.”
Not that I’ve listed a FSBO mind you. Never have. I’ve read lots of books about getting FSBOs to list with you. I’ll probably get around to it when the market comes back around again and starts swinging towards a more balanced market, or even (gasp) a straight-out Seller’s market. For now I’m content to work with buyers and to sell them bank-owned homes. Making hay while the sun shines, as they say.
You see, it’s my belief that selling a house by owner is, in general, a mistake. The #1 mistaken notion is that the seller is going to save some money by going FSBO. I think it’s safe to say, that’s why most sellers want to go FSBO. Let me show you why that doesn’t work in today’s market, when information is so open and shared.
Let’s say you have two houses in a subdivision that area exactly equal in every way. Tract homes. The first home sells with a Realtor for $100,000. Then the next door neighbor says, hey, I want to sell my house, too, but I want to keep that 6% commission in my pocket. So the next-door neighbor lists the house for $100,000, For Sale By Owner.
A buyer comes along. Wants to buy the house. Sees that the seller is not paying any commissions to anyone. This buyer hops on the internet and says, oh, woah, look, the house next door just sold for $100,000 last week. He also happens to note that it was sold with a Realtor. Is this buyer going to offer the seller of this FSBO house the full $100,000?
Let me ask: would you? I didn’t think so. Of course not. Why would you? There’s no commission in the sale of this FSBO home. So why not offer $94,000? Why indeed. Is the seller going to stick to his guns, and insist on $100,000? Probably not. And if he does, he may not sell the house. Or if, somehow, he does sell the house for $100,000 that means he will have, effectively, sold the same house for 6% more than his neighbor just sold his. So, either his neighbor could have sold his house for more money, or the buyer of FSBO house at $100,000 is paying too much for it.
Which brings me to the Blue Light Special.
The man who wrote “Write a Book Without Lifting a Finger” is trying to sell his house without hiring a real estate agent.
Mahesh Grossman, known as the “ghostwriting guru,” is offering a four-bedroom home at 4398 Nicker Court in Soquel for $749,997, which he claims represents a $50,000 savings.
This is an interesting article – especially because it contains a healthy selection of quotes from yours truly. Some truly sagacious insights there, you ought to check it out. The interesting thing here is that this FSBO seller is passing the savings on to the buyer. For once, there’s a FSBO seller who isn’t interested saving money – he just wants to sell his house quickly, and is giving the buyer an opportunity to save some cash on the commission.
Let’s tune in on Monday and see what’s come of it.