Buyers: To See a FSBO Property, Call your REALTOR

To see this site as it was designed, you need newer browser software, such as recent versions of Internet Explorer or Mozilla.

Buyers: To See a FSBO Property, Call a REALTORŽ
by Matt Difanis
May 6, 2001

Click here for Matt's Article Archives

My Multiple Listing Service (MLS) membership allows me to show my buyer clients any property listed for sale with any area REALTORŽ. There is, however, no such system to provide me access to properties that are for sale by owner. Although the vast majority of homes on the market are listed for sale through a REALTORŽ, buyers often peruse FSBO ads and go to see FSBO properties. Buyers who find a promising-looking FSBO property should resist the urge to call the seller directly; they should call their REALTORŽ instead.

Even veteran home buyers who have been through the process before are ill-equipped to proceed with the purchase of a property without assistance from a competent professional. And even if the buyers know what they are doing, odds are that the seller does not. Without the involvement of a good REALTORŽ, buyers and sellers are far more likely to be faced with disaster: expensive litigation, a closing that falls apart at the last minute (which often leaves one party homeless), no clear understanding of which party pays which expenses, how to address home inspection repair issues, etc. Good REALTORSŽ coordinate these sorts of details every day.

While it's true that many--but not all--people who try to sell their homes on their own do not wish to work with a REALTORŽ, consider the following: You alert your REALTORŽ about a promising-looking FSBO property. Your REALTORŽ contacts the owner and asks if the owner would mind if the REALTORŽ scheduled an appointment to show the house to a qualified buyer. When the seller says yes, the REALTORŽ asks if the seller would be willing to pay a small, half-price commission if that REALTOR'sŽ buyer decides to purchase the property. The half-price commission would be paid to compensate the agent for bringing a ready, willing, and able buyer to the property and for the REALTOR'sŽ role in managing the details of the transaction.

This arrangement should work beautifully for both parties. The seller, who is selling on his own to avoid paying a huge real estate commission, gets a good, qualified buyer, and the seller also benefits from having a REALTORŽ involved--even though that REALTORŽ represents the buyer. All of this ends up costing roughly half of what it would have cost the seller to list his or her home with a real estate brokerage that would have charged enough fees to pay two agents--one for the buyer and one for the seller.

For this arrangement to work, it is important for the buyers to let their agent contact the sellers--not to make contact themselves. If the buyers make the initial contact, the seller will almost always react unfavorably when a REALORŽ is mentioned later. The seller will feel like the REALTORŽ was not the procuring cause of the sale if the buyers call the seller; schedule a showing; see the house; and then mention that they will call their REALTORŽ to make an offer. Buyers will also derive maximum benefit by involving their REALTORŽ early in the process. If buyers already have a good working relationship with a REALTORŽ, that trusted professional can help compare the FSBO to other properties the buyers have seen. The REALTORŽ can also verify measurements (you would be amazed at the number of FSBO properties that have magically shrunk when I showed up with a tape measure ☺), and inspect the property for defects.

Finally, it is important to realize that this arrangement does not always work. I know from experience that there are many people who try to sell on their own because they fail to realize how much they do not know about selling real estate. These sellers think they know everything necessary to handle a complex real estate transaction, and therefore, REALTORSŽ serve no purpose other than siphoning cash away from the sellers. If a seller balks at the idea of paying half price to enjoy the benefits of having a professional involved, then that seller is probably not going to be a reasonable person with whom to negotiate--whether the buyer has a REALTORŽ or not. Missing out on a great house that is owned by unreasonable sellers is far better than spending months--and thousands of dollars--on litigation later.

Buyers: To See a FSBO Property, Call a REALTORŽ by Matt Difanis May 6, 2001

Matt's Article Archive

Buyers: To See a FSBO Property, Call a REALTORŽ
by Matt Difanis
May 6, 2001