Before you begin to sell your house, you need to decide if you want to sell it yourself, or get an agent to help you through the process.
I talk about the pros and cons of each choice and more importantly, how to pronounce “FSBO”, for sale by owner.
Of course, you should just chose me as your agent, but I tell you the situation where you could do it yourself.
But Fizbo! Fizbo’s a perfect name for a clown. You don’t want to be a clown. You don’t want to sell “for sale by owner”. Guy, that, I just made that up. That’s pretty clever.
This is Selling Prescott, a project of PrescottRealEstate.com. I’m Conrad Walton.
Before you start anything in your home selling quest, you need to figure out why you’re selling it, and what the timing is what your goals are in selling it. Some people want to make a lot of money, and they’re willing to wait forever to get the top dollar. Some people, because of life events, most likely, are “Oh my gosh, I’ve got to sell it by next Tuesday.” So I’ll I’ll take a lowball offer just I got to sell it now.
So you got to figure out where are you on that scale. And that’s going to be up to you. You should be aware that selling a house is very emotional. There’s more emotional baggage in selling a house than a typical soap opera plot.
I mean, you know, you raise your kids there. You’ve lived there for a while. You’ve got memories. Remember that time that this person did that thing. And I mean, it’s very emotional. So you need to get in touch with that, are aware of that. And just know that that’s going to rear its ugly head.
More than one person, when I was talking to them in a listing appointment, talking about listing their house, has gotten teary eyed. So get ready for that.
But more importantly, I want to talk about agency; finding a real estate agent. The question, I always get this question, about “Should I sell it myself?” Save the commission price? Or should I get an agent? You know, why should I get a real estate agent? What’s the value in that? For Sale By Owner, FSBO, pronounced “fizbo” in the business.
You probably remember Cam on Modern Family, the TV show, that, when he was protecting Mitch in the gas station, while he was dressed as Fizbo, his clown character. That’s got to be the funniest, funniest scene in that whole TV show. That was amazing.
But Fizbo! Fizbo’s a perfect name for a clown. You don’t want to be a clown. You don’t want to sell “for sale by owner”. Guy, that, I just made that up. That’s pretty clever.
So let’s talk about what agents do for you. So the big reason that people want to FSBO their house is they want to avoid paying the listing agent commission. What you don’t know is you’re still probably going to have to pay a buyer’s commission.
If you’re a real estate agent out there, and you’ve got buyers shopping for homes, they’re probably not going to come to your house and show their buyers unless you’re going to pay them a commission.
So you’re probably going to end up paying at least half the commission. So you’re not going to save a lot of money. You’ll save some. Statistics say that 49% of FSBO sellers don’t want to use an agent because they want to save the money on the commission.
The National Association of Realtors, they say that you’re going to get there on average 13% more money if you do use an agent.
And that’s a little misleading. As an agent, I want to say “Ah Ha! See! That proves it!”, you know, you’re going to get more money if you pay me a commission. But the reality is, half of FSBOs are selling to a neighbor, selling to a friend, family member, or something like that, where there’s not marketing and you know, the legal liabilities and all that stuff.
You’re just doing a private deal. You don’t want an agent involved. That’s totally fair.
The other half of FSBOs are just people who want to save on a commission. And I will tell you that there are some people out there, home flippers, people like that, who have done it enough. They know the pitfalls. They know how to play the game. They know the legal liabilities involved.
And I think it’s appropriate for a very small percentage of people to do that. Most people, you’re going to be better off, you know, the agents going to be worth their money.
The difference between the price that you can get by yourself and the price the agent can get for you. I’m going to guess it’s going to be more than the 5% or 6% agent commission that you’re going to pay.
Most people are happy with their real estate agents. Most real estate agents are great people. 74% of sellers would use the same agent again. FSBO sales only make up 8% of all home sales in the United States, on average. I think we hit 9%, goes down to 7%, but right about 8%. So half of our family and friends deals, only at 4% of people out there, you know, fighting their own battles.
One of the big reasons that you should be using an agent is emotions. You know, ask a real estate agent, how many times things have gone sideways due to emotions. You need somebody to be impartial, to be out there to like, control those emotions that keep the transaction on track.
I remember when I sold our house that we lived in for 24 years. It was a house that I loved, raised a family, and I deep emotional attachments. I mean, I think I shed tears over that one. Took me a couple years to get over selling it, and feeling bad about selling it, and missing that house.
So very emotional, but I needed somebody else to like, deal with the negotiations, with the the legal paperwork, and all that kind of stuff. The stress and the emotions can just really, you know, really take their toll on you.
At the time, a friend of mine was a real estate agent, and we let him handle the deal. And he done millions of deals in the past, probably literally 1000s of deals. And he’s like, “it’s just sticks and dirt, sticks and dirt.” And I’m like, it’s not sticks in dirt I I have my life poured into, almost half my life, in that house. I mean, it’s not just sticks in dirt, it’s emotional. But he just went out, he did the deal, we got good money, and it was a good transaction, I was happy at the end of it.
But you need to have somebody out there that’s going to be your warror, you know, your paid assasin, to go out there, and fight with the real estate market, to get you the best deal. Make sure you don’t get taken advantage of in the end.
So now the thing that an agent’s going to be better at than you are by yourself is pricing.
And you can look up on Zillow, you can get your zestimate and they could be 20% off, I’ve seen them be farther off, they’re generally pretty good, usually within 10%, but still 10% of a $500,000 house 50,000 bucks. I’ll take that $50,000 if you’re, if you’re just willing to toss it away.
A lot of times sellers, because of the deep emotional attachment, they overpriced their house, you know. “This is the best house in the world. I love my house, everybody will love my house, you know, it’s it’s wonderful.” And you’re just not going to have an accurate pricing because of that emotional attachment.
You haven’t walked in and viewed most of the competition yourself. You don’t know what else you’re competing with, what you’re up against out there. And a lot of buyers, they don’t have that emotional attachment. They’re not you. They don’t care. They don’t care what, you know, memories you have. That’s you, I mean, they’d rather you didn’t even exist. They’re just looking for a place to make their own new memories.
So they’re gonna go look at price per square foot. And a lot of more objective factors involved here. Don’t get emotionally involved.
On the flip side, sometimes sellers are like, well, I only bought it for this much money. So I guess I’ll just ask the same amount. Well, it’s worth twice that. You don’t know what the market is. I mean, the markets crazy out here.
So you know, don’t under price it. Don’t over price it. Get it, get an agent to do an accurate assessment of what that pricing should be. I mean, agents understand the fair market value and the pricing strategies.
There are strategies in pricing also. There’s no, you know, people call me up and say, hey, how much is my house worth? Well, looking at it on paper, I think it’s worth this many dollars. You get out and you look at it, you look at fit and finish, the views, blah, blah, blah, and it’s it’s different.
But what real estate agents are really good at, what the core of my job is, is marketing. 49% of FSBO sellers have no marketing strategy at all. They’re going to put a sign out there on the yard. Hope for the best. Put it on Zillow. Put it on Craigslist. Hope for the best. See what happens.
But agents I mean, this is my job. This is what I do. But putting it in the MLS is huge. That gets syndicated all across the world. You know doing the signs, doing the flyers, location of the signs, how the flyer is laid out, the photography.
You’re not going to do as good a photography as a professional real estate photographer. You probably have some really cute or pretty pictures of your house.
That’s not what real estate photography is about. Yeah, it’s got to look good, gonna make your house look good. But there are certain things that buyers are looking for that, if you don’t I understand that, you’re not going to take the right kind of photos.
So, you know, we’re also going to be doing drone photos, maybe a 360 degree virtual reality tour. You might be doing staging and the photography. We might be building a website for you. That’s one thing I generally do for my listings.
Homes with aerial images, or the 360 degree tours, sell 60% faster than homes that just have standard photos. Everybody’s got standard photos. But if you’re going to stand out, and you know, head and shoulders above, get noticed, you need to have the whiz bang stuff. And real estate agents are all over that.
If you sell it yourself, you’re going to have to manage and schedule showings. You’re going to have to talk to people about when to be there. You’re going to have to deal with open houses. You’re going to have to, you know, the timing and all that stuff.
It’s just easier for a real estate agent to do it. Because that’s my full time job. This is what I do all day long. You know, you want to get questions about showings or questions about, you know, technical stuff on the house, I deal with all of that. So you don’t have to.
Also, when you have a listing agent, the buyer’s agents who are out there looking for houses, driving their clients around looking, at four or five houses a day, they’re more likely to show your listing. If you have a listing agent, then if you are a FSBO.
Commission is an issue in the back of their mind, although I’m sure they would never let that get in the way of their fiduciary responsibilities to their buyers. But if I’m going to get a commission, I’m probably going to be more tempted to show your property.
You’re also going to get less offers, because you don’t have the exposure. If you’re not on the MLS, you’re not going to get as many showings you’re not going to get the offers, and you’re probably not going to get the price as high as you think you will.
The other thing about doing a FSBO you’re always gonna have to be on call to show potential buyers your home, to answer the phone when they’re, you know, they got questions about this or that, determining whether they should even come look at it.
Again, I’m a real estate agent. I’m used to the phone blowing up and answering phones all day long. And agents going to schedule and host the showings.
We have a application here in Prescott called Showing Time, that’s an automated system. We also have lockboxes, that we have an app on our phone that uses Bluetooth to communicate with, whenever a showing happens. And they use that lockbox, I get an email as the listing agent. So I have a record of what agent showed your home, on what time what time they open, what time they closed when they left. I know how long they spent there generally. So I have a record of all that you’re not going to have a record of that.
There’s the idea of cooperation with a buyer’s agent. That means paying them a commission. So they’re going to want, you know, 2% or 3% on the commission, probably. Otherwise, they may or may not call you, may or may not show your house. So you know if you’re going to be cheap on that, man, I don’t know.
Another thing that we’re good at is weeding out unqualified buyers, a lot of looky loos out there, people who just want to have an idea of you know, the competition or something. I have heard stories of people coming into town and calling up a real estate agent going “Hey, I’m looking for a house”, just to get driven around and shown the town. It’s kind of like your own personal tour, you know, so no intention of buying a house.
Or maybe they don’t have the money. Or maybe they’re gonna lowball you, you know, you’re asking 500,000. “All I can afford is 400. Would you take 400 for it?” It’s like no, go away. Don’t even bother me. You know, let me be the guy who says go away. Don’t bother me. You know, you don’t even need to deal with that phone call.
The last thing I’m going to say about marketing, it’s going to take longer to sell your house without the MLS. Without the marketing, without the exposure, without a real estate agent, you’re going to get less offers, less money, it’s going to take you longer.
Do you save that on the commission? I mean, why should I give you 3% or 6%? I mean, is it worth it? Well, if your car needs to have its oil changed, you take it to the mechanic, you pay the guy for doing the job.
Real estate agents do the job, they should get paid for it. Nobody works for free. I think the service that a real estate agent provides is worth the commission. But that’s me speaking to as a real estate agent.
So you know it’s really up to you to make that decision. The real value of a real estate agent, aside from the marketing, is we’re going to act as the middleman on the transactions. We’re going to have to negotiate.
As a listing agent, I talked to my seller, find out “What are your values?” You know, is it more important to get more money or to sell it quicker? How much do you want to come down on price? You know, what are your values?
And then I go out, and I represent you. And I juggle all those negotiations for you. I’m the one that plays hardball. I’m the one that’s the the guy out there, grinding the guy on price, you know, “No, I’m not going to give you a new roof. No, we’re not going to pay for you know, a leak under the sink. No, you know, we’re not going to do that.”
That takes, you know, there’s some social awkwardness in negotiations, I have no problem being socially awkward. I will be as obnoxious and offensive, and rude as I want to be, you know. Bottom line in negotiation, it’s hard to be that guy. I’ve done it a bunch of times.
Most real estate agents are not going to take any crap from anybody. Here’s the deal. Here’s the number. You know, you want this, I want that. I’ll trade you this for that. Okay, we’ll meet in the middle, whatever. It’s not personal for me, not my house, not buying it. I don’t care. To me, it’s just numbers.
You need somebody like that. You need, you need your paid hitman out there working for you, that doesn’t care. That’s not emotionally involved. Take the emotions out of it. Let the the real estate agent, let him go to war for you.
There’s a skill in negotiation, there’s a skill to knowing when to push and know when to back off. Are you going to scare that buyer away? You’re going to have to buckle under?
Oh my gosh, do you want to get desperate and take whatever you can get? When, you know, two days later, you’re going to have a buyer is going to offer you everything you wanted. So that’s a scary thing, let, let a real estate agent negotiate for you.
The last thing is a liability. There are a lot of legal issues involved in in selling a house. Wherever there’s a lot of money involved. There’s a lot of lawyers involved, and people get real upset about money. And there is a risk of being sued if you don’t do everything just buy the book.
You know, I’m trained to comply with the laws. I know what the laws are. My broker, we have monthly meetings, we have weekly training. Online, they do video meetings. And I know what the nuances of filling out a contract are. And that contract can get you sued if you fill it out wrong.
I personally have had to pay money out of my own pocket, because I missed a detail here, or there, and didn’t do something quite right. Instead of getting sued. It’s like, “Hey, here’s a couple grand, you know, sorry about that. You know, don’t sue me for a couple grand. You cool? Okay, yeah.”
Let the real estate agent, take that liability, I have learned my lesson, I know what it takes to not get sued. I know what I can say, and what I can do, how hard I can push without getting sued. You don’t know that. And if you step in it, it might get really costly.
You know, and also we know the paperwork, all the forms, it’s like, I know all the lines of all the contracts of all the addendums. My gosh, my favorite part of the business is, you know, paperwork.
But I know all the details, I know what to look for. Because I’ve been bit on a lot of that stuff. Got the experience, I know what the potential pitfalls are. So we got a broker, you know, every agent is going to have somebody that’s going to check their work.
I have automated system in my office that somebody, who I’ve never met, goes through that with a fine tooth comb, and kicks it back if I missed the initials online 389. You know, if I missed a signature somewhere, or you know, whatever.
I have a backup in my broker and support for that paperwork to make sure it’s all correct. And so that paperwork is my responsibility. If I screw it up, I pay for it, not you, you know, so let me be responsible. Let me take that load off view and I’ll take care of you.
So, in conclusion of all of this, the problems that a FSBO seller faces is, you got emotions. I have emotions, but not about your house. So let me let me go deal with it.
Pricing the home right. There’s a whole strategy to pricing a home right, that we’re going to talk about in the next episode. And you’re not as savvy as I am about that. So we need to have that talk.
I’m going to be better at marketing your home. You’ve got Zillow, Craigslist, and a sign on your lawn. I can do better than that.
You’re not going to be able to negotiate, you’re not going to grind as hard as I am. Because I’ve been doing it. I’m a professional grinder, and nobody’s going to get away with anything, unless I let them. So let me negotiate and let me get sued, not you. If I screw up the paperwork. Let me take that liability away from you. That’s part of why I get paid, what I get paid for.
So that’s my spiel on fizbo or getting a real estate agent. Choice is up to you. Those are some of the pros and cons. You’re going to save money if you do it yourself. And if you’re good at all the stuff I just talked about, then go for it. If you’re not good at all that stuff, pay me to do it for you. I’ll take care of it because I’m a professional. And that’s what I do.
Thanks for listening. Please drop a review wherever you get your podcasts. If you have any questions or need any help with real estate in Prescott, please give me a call or text me at 928-925-4428. You can email me at Conrad at PrescottRealEstate.com. You can always contact me through the website where you can also get show notes with information about this episode. That’s PrescottRealEstate.com.
The key life is gratitude. So stay thankful
Leave A Comment