When to try “For Sale By Owner”: The Rest of the Story

We’re BIG fans of Ilyce Glink’s and ForSaleByOwner.com, but think this 100 second sound bite does not do justice to their wealth of knowledge nor the complexity of selling one’s own home “for sale by owner.” My guess is that their books and web sites treat the multi-layered decision in more detail, as well as the steps in the process.  In this market, that process can extend over half a year.  As housing values continue to decline the question for many sellers, isn’t simply “When to try FSBO?” but can I get a limited amount of professional help without paying traditional full fees on both sides of the commission. Thank goodness the marketplace is creating a full menu of options for “do-it-yourself” buyers and sellers to answer that question. If you are looking for some of the “Best of Breed” visit http://FSBO.pbwiki.com

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Buyers run the full spectrum from delegation buyers, who WANT a professional shopper to do the work, to a web-savvy generation of do-it-yourself buyers who don’t even want agents to accompany them to private showings.  In their eagerness to make the process more efficient, DIY buyers should be careful not to inadvertently reward the listing agent with a two-sides commission by going directly to them.  The industry is changing and an increasing diverse full menu of options and menu of fees exist for buyers and sellers.  If you want to be rewarded for doing some of the work yourself, find a fee-for-service real estate consultant, like our company, The Real Estate Cafe, that offers rebates to buyers. 

On the otherhand, if you are interested in one of the homes listed by ListforLess.com, or other listing entry only services that allow you to save money by working directly to the seller, we’d be glad to provide limited advise on an hourly fee outside the sales price.

Pat, if this sounds like shameless self-promotion, please feel free to delete this post.

How can we improve our money-saving Menu of Fees & Rebates?

Menurebates_v1It’s been more than a year since we updated our Menu of Fees & Rebates, so we’d like to invite home buyers to meet in person to discuss possible improvements.  Our current options are shown above (click on arrowheads in outline for more detail) and on our wiki.

  • We offer three basic options:  traditional commissions with limited rebates, hourly fees with full rebates, and flat fees with performance bonuses
  • Our most popular options include a 100% rebate of the buyer agency commission included in the sales price. 
  • Our hourly fees range from $75 to $125 per hour depending on the size of retainer prepaid (or $150 per hour with no retainer or minimum fee).
  • Limited availability:  Flat fees start at $3,000 plus performance bonus.  Each performance bonus is negotiated individually to motivate us to help you maximize saving (see map of savings totaling over $1 million).
  • We’re also willing to work with a few buyers on a 1% fee option, some restrictions apply.
  • Finally, you can propose your own fee / rebate, particularly if you are selling "for sale by owner" and would like us to represent you as a buyer.  That way you can maximize savings both buying and selling.

Our ideal is a mix of fees — hourly, flat fees, and traditional.  If you select option 3.3 and prepaid $3,000 in the next few days, we’ll cut our hourly rate by 50% for the first 40 hours.  We’re pushing this special offer so we can attend the National Association of Realtors mid-year convention next week to identify the best new money-saving tools and trends for home buyers and sellers. 

Should we host a series of webinars or meetings off-line to discuss the benefits of each fee / rebate, and to help new clients decide which money-saving option best meets their
needs?  We can meet on short notice at a local cafe or in the privacy of your home.  We’re also eager to begin meeting at  TogetherInMotion in Arlington, MA so working parents can talk over food while their kids play.  Please contact us for additional information.

Should FSBOs underprice or overprice market?

Several weeks ago, a leading listing agent on Cape Cod in Massachusetts told the Wall Street Journal that sellers should underprice the market by 5% because of hurricane Katrina and an increasing inventory of unsold homes.  Then two weeks later, an article in the Boston Globe’s "Big Move" told people trying seller their own home to overprice the market by 5% to 10%.  So, in less than one month, sellers have been given advice that could translate into a pricing gap of 15%.  More important than pricing strategies is the sellers’ net profit.  A seller who underprices the market by 5% could actually net 10% less profit on their sale after paying traditional real estate commissions, right?  Anyone can discount your property, so why involve a full-fee, full-service real estate agent at all?

We’d like to hear your opinion about pricing strategies, particularly if you are thinking of selling "for sale by owner."  Just click on "Comments" below and begin typing, or call 617-876-2117 to record a 1 to 3 minute sound bite (which we may use in a future podcast).

Listen to conversation starter:  Should FSBOs underprice or overprice market? (MP4, 2 minutes, 1.9M)
Date Recorded: 29 September 2005


Subject: 
Discussion about conflicting advice on pricing strategies given recently by industry experts in the Wall Street Journal and Boston Globe
Featuring: Bill Wendel (Real Estate Cafe) speaking with anonymous buyer agents in Massachusetts

Location: Massachusetts Association of Realtors, annual convention @ DCU Center, Worcester, MA

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