Brokers are not the enemy – six percent commissions are
Talk to brokers but don’t pay six percent commissions.
FSBOS doesn’t want to talk to brokers. That is an error. A broker is your best source of information. FSBOS avoids brokers because they don’t want to sign a listing agreement.
Definitions:
* A broker is licensed to sell real estate and supervise other licensees.
* A real estate agent is licensed to help with the buying and selling of real estate. They must work for a broker.
* A real estate agent is a member of the board of real estate agents and can be a broker or a licensee.
In this article, we have used the term broker for all references to licensed persons.
Accept as a fact, brokers have the information you need. Ask them for a free market assessment. If you decide to quote later, use a broker that has been helpful to you. Ask them to include recorded sales because a recorded sale is a fact.
The runners arrive!
The sign is in the yard, your ad is running, all of your neighbors have come to ask why you are moving, and the brokers are coming. You will receive calls from brokers. Don’t bother putting “No Brokers” in your ad, they’ll call anyway. A “For Sale By Owner” sign or ad is a green banner that says, “I have a home for sale! Help me.”
Decide if you are willing to pay a reduced commission or a cooperative fee. A cooperative fee is typically 2.5-3% paid to the buyer’s agent; however, it can be anything. Don’t let anyone tell you that the rate is fixed. Many sellers offer a flat fee rather than a percentage. If you don’t want to offer any co-ops to brokers, you must learn to say “No”.
Why brokers? Because they have buyers.
* To sell, you must have buyers.
* Brokers have buyers.
* About 90% of buyers work with a broker.
* Are you willing to reject that market?
* If you pay a cooperative fee to a broker, you are still saving thousands of dollars.
Here are some tips on how to work with brokers if you decide to cooperate:
* Have an open door corridor.
* Send invitations.
* Take flyers to real estate offices.
* Serve snacks.
* Ask for a valuable opinion.
* Invite the offices to include your property in their weekly tour.
* Let them know that you are willing to cooperate.
* Encourage projections.
* Don’t try to steal from your buyers!
Remember that runners are not the enemy.
There are alternatives to the full service. Times have changed and today many brokerages will work with an FSBO in some way other than the traditional full listing service:
1. Some companies offer an exclusive agency listing that allows you to continue marketing as an FSBO, and if you sell the property without the involvement of a broker, you owe no commission. They receive a commission only if the property is sold by their office.
2. Other companies offer “Multiple Listing Registration Service” to FSBOS with an exclusive agency agreement. This type of contract allows you to continue to market as an FSBO, offering a cooperative fee to a broker if the buyer goes through the MLS.
3. An exclusive right of sale agreement takes away the right to sell FSBO and you will pay the publicly traded company and the selling company.
In recent years a variety of FSBO programs have emerged. The original company offering such services is owned and operated by the author in the Colorado Springs area. Call in your area to find out about brokers offering alternative pricing plans. Programs that let you stay in control
We’ve found that people who sell by owner do so for two reasons:
1. They want to save the commission.
2. They want to be in control.
Both opportunities are available. Decide how you want to proceed.
Red Flag Alert: When you meet with brokers, there are red flags warning you that a broker is violating the Code of Ethics for Realtors. Be aware of these unethical practices.
The red flags:
* A broker tells you that the commissions are fixed.
* A broker says that you cannot sell without a broker.
* A broker quotes a sale price five or more percent higher than that quoted by other brokers.
* A broker says he has a buyer, but will not bring him in unless he has the exclusive right to sell the agreement signed by you.
* A runner speaks ill of other runners.
* A broker tells you that you must pay a certain amount of commission for brokers to work on your listing.
* A broker tells you that no one works with a particular broker.
If you hear any of these comments, run away! This is not a professional broker.
A broker or agent who speaks to any of the above red flags is violating federal antitrust laws and could be convicted of pricing.
Be wary of any runner who uses these tactics.
The good news: there are far more professional than non-professional brokers.
Other Suggestions:
* Never sign a contract without sleeping on it.
* Sales personnel are trained to close the sale.
* You have the right to think it through.
* There is no right of withdrawal for three days once you sign a listing agreement.
If you decide to work with a broker, either with an alternative plan or with a comprehensive list, choose someone who is honest, helpful, and cares about your well-being.
Let’s review what you’ve learned:
* Brokers are the best source of real estate information. Ask for help.
* The runners approach. You cannot avoid them.
* Learn to use your experience.
* Brokers have buyers.
* Consider ways to work with brokers.
* Alternative listing programs are available.
* Find out if one is right for you.
* Stay in control.
* Know the red flags: avoid non-professional racers.
Good luck sale