Offer from Realtor

[legion]

When going to open houses today, a realtor asked us if our house was for sale. I told him no, not yet, but we would probably go FSBO to begin with.

He replied that he would like to make me an offer. If I used him for buying a house, he would do "comps" on our house for sale.

I have no idea what he meant.

[Porsche-O-Phile]

I smell a trap. I'm guessing he'll either expect compensation or he'll use the "service" of providing you with the comps to try and guilt you into signing an agreement with him.

Comps are simply comparisons of other properties in the area with similar features which are used as a rough basis of valuation. As long as you make it clear up front and you're adamant that you WILL sell this house FSBO, you have no interest in paying an agent's commission and he's wasting his time if that's what he's after and the comps will be solely at his expense with no strings attached, then there's probably no harm in it. I'd have it put in writing too. Yes, seriously.

This is common sense and I'm sure you'd be smart enough to not, but obviously sign nothing otherwise he could trap you into an exclusivity agreement with him (usually for 6 months).

If he wants to make an offer you can always tell him he's welcome to do so like everyone else, but you'll evaluate it on the basis of your own research, comps and pricing thank you very much. That's probably the way I'd handle it.

[legion]

I just wasn't sure what he was offering. I don't know realtor jargon. Now I know.

The thing is, I can get "comps" by searching the county clerk's web site. Oh wait, I already have.

[notfarnow]

He's offering to do a market evaluation on your home, based on comparable properties that are for sale now, and others that have sold in the past year or so. This is free anyway, and you should get 2-3 opinions before listing your house (even if you're going FSBO)

Anyway, he's offering to give you some helpful info for free, if you use him to buy your house (which gets him a commission)

Either way, my suggestion is that you make sure you have someone you *trust* to represent you when you're buying. There are many ways for you to get mediocre, even negligent service, so don't just use whoever you find first. I saw a deal a few weeks ago where a buyer missed (and therefor, forfeited) the inspection because the realtor was working his "real job" (his words) that day. Find a realtor the same way you'd find a trustworthy mechanic or contractor... ask your friends and family if they have someone they've been happy with.

[RANDY P]

What Jake said. He's offering to give you a realistic ballpark (NOTE: base it on closed sales, not asking prices-)

If you use him as a buying agent as long as he's decent, why not? It comes out of the seller's end and gives you a bit more protection.

[legion]

I already had a do-nothing realtor when we bought our house. I have already asked around and developed a list of potential realtors to work with buying. I also may list with a realtor if the FSBO doesn't go anywhere.

The top of the list is the agent that sold the house four down in four days.

The wife and I have already agreed that we will be willing to pay a realtor a 3% fee if they bring a buyer to our house and close the deal. We will tell any realtor who does this and demands 6% to pound sand.

Now, our subdivision is hot right now. It is a subdivision of starter houses (attracting that first-time homebuyer credit) and it is walking distance from the largest employer in town. I can see hunger in realtors eyes when we tell them where we live. (We are generally politely asked: "Where do you live now?" when we hit open houses.)

[notfarnow]

Originally Posted by RANDY P

What Jake said. He's offering to give you a realistic ballpark (NOTE: base it on closed sales, not asking prices-)

Asking prices are important too, especially if there are current listings really nearby. I recently had one that I evaluated at 190k in the fall, but he was late getting it ready and I recommended 180 a little later because there were new comparable listings nearby, but with nicer bathrooms and floors.

Originally Posted by RANDY P

If you use him as a buying agent as long as he's decent, why not? It comes out of the seller's end and gives you a bit more protection.

He may be fine, but he may only work tuesdays and sundays too. It's your *house*, there are so many little details that can save YOU time, money and heartache. At the very least ask the guy for references, but better yet ask friends & colleagues for a recommendation. That's how hard work gets rewarded

[Porsche-O-Phile]

Originally Posted by legion

I just wasn't sure what he was offering. I don't know realtor jargon. Now I know.

The thing is, I can get "comps" by searching the county clerk's web site. Oh wait, I already have.

You'd be stunned at how many people are too stupid to do this. Well, maybe you wouldn't be, but it still blows my mind when I tell people I've looked around on the country assessor's web site and gotten all the recent sales data and they stare at me blankly and say "you can do that?"

Unbelievable. No wonder the housing market is in such trouble - way too many suckers out there.

[notfarnow]

Originally Posted by legion

The top of the list is the agent that sold the house four down in four days.

There ya go! I sold a house in 4 hours this spring. When I put up the "for sale" sign, it already said "Sold". I sold 6 in under a week in 2009

Originally Posted by Porsche-O-Phile

You'd be stunned at how many people are too stupid to do this. Well, maybe you wouldn't be, but it still blows my mind when I tell people I've looked around on the country assessor's web site and gotten all the recent sales data and they stare at me blankly and say "you can do that?"

That's a good strategy for establishing a baseline, but not much good when it comes to adjusting value for specific features or level of finish... which can be a significant %

Even if you're going FSBO, I would get a couple realtors in for a price check. Get someone who sells lots of homes in your area... for one thing they may aleady have a buyer (or several), and if they sell a lot they aren't likely to overprice it just to try to get the listing. Busy realtors tend to be pretty conservative (and accurate) with pricing.

[Damian in NJ]

I go back and forth on my opinions on realtors. With a six percent commision, the average house is my town is costing the seller sixty grand. In a town where the average selling price is less than half that, it asks the question-does it cost that much more to sell a more expensive home?

[Shuie]

He's just offering to give you the MLS data on what other comparable houses in your neighborhood have sold for, or are listed for. My wife is a realtor for a real small mom and pop shop here and she offers to do comps for people all the time just to be nice. It's not hard to pull the listings and it gives the seller a lot of real numbers to consider.

None of this may mean anything to you if are doing everything FSBO, but I figured I'd mention it.

My wife got her RE license when we decided to buy our last house. There was a cost and some time involved, but it was worth saving the fees both on the sale of our previous house and the purchase of the new house. It wasn't 6% on both ends, but it easily covered her fees for the year and a kitchen remodel in the new house.

[911Rob]

6%, oh that would be sweet. We get about 3% here and thats for list and selling ends. (1.5% per side) On a million dollar sale that I doulbe end, I'll make $30,000 CDN; which I'm happy with, in fact at first it felt almost illegal?

I would list my good clients home with no listing commission at all, if they use me as their buyers agent on their purchase; but if I bring the buyer to their property, then I take the selling commission. Two years ago I wouldn't of worked for a nickel off a full commission, but today we have to be more flexible.

I appreciate my clients that go the FSBO route (heck, its what I'd do!) and I'm willing to be flexible and creative with them. Fact is though, I make 90% of my income from 10% of my clients and those 10% always want me to make my commission. On a high average, they're business minded people and good business promotes profit.

Try finding a Reelytor that will be flexible and creative when the time comes?

[MRM]

We bought the house we live in the day before it went on the market and within hours of a sign going up. It was a Sunday and it was going to hit the MLS the next day. It was a nice spring day, so their realtor sugested they put a sign out front and hold an impromptu open house.

We were in the neighborhood to look at two other houses when we saw the sign for our house. I looked up, saw that it looked like the kind of house we'd be interested in, so on impulse I pulled over. My wife asked why I pulled over. I gestured at it and said that it was an open house that looked nice. She is very literal and responded that it wasn't on our list. I suggested that we had enough time to live dangerously and tour a house that wasn't on the list.

We barely crossed the threshold when we exchanged a look that said we both loved it. I went to distract the realtor while my wife could grab a brochure and find out the cost without getting bothered. She came back with her eyes glowing and said "We can afford it." It was about $40,000 under what it should have been.

Our realtor was holding an open house that afternoon. We had toured some houses that morning with her and planned to get together again in the evening. We called from the house and told her to wrap her open house up early because we were going to make an offer right then and there. By that evening it was ours.

Our realtor sold our house a couple of weeks later and did a nice job with it. Because she both bought and sold for us she charged 5% instead of 6%. A good realtor is well worth his fees. Lousy realtors aren't worth anything, but a good one pays for himself several times over, plus he'll make sure the transaction goes smoothly and has insurance to cover it if smething goes wrong.

[stomachmonkey]

Originally Posted by legion

...The wife and I have already agreed that we will be willing to pay a realtor a 3% fee if they bring a buyer to our house and close the deal. We will tell any realtor who does this and demands 6% to pound sand....

Just some observations from my shopping and selling of homes.

FSBO's are annoying. Every one we went to the owner shadowed us constantly pointing out stuff that mattered to them but that we could care less about. I think most people want to walk around and feel the space for themselves. To sell a house you want a buyer to be able to imagine themselves living there, not someone else.

For me there is this weird impression that I get from FISBO's, not willing to pay a realtor makes me feel the owner is cheap. That was reinforced when I once made an offer on a FISBO and the negotiations with the PO were highly frustrating. I passed due to it. But that's just my experience.

One of the issues with negotiating commission is you take away their incentive to sell. Their marketing dollars come out of the commission so the less they make the less they spend and the greater risk that they do the minimum and just encourage you to keep dropping the price till it moves.

If you find an animal realtor, pay them the going rate. They'll move it faster and for the most money.

[legion]

Originally Posted by stomachmonkey

Just some observations from my shopping and selling of homes.

FSBO's are annoying. Every one we went to the owner shadowed us constantly pointing out stuff that mattered to them but that we could care less about. I think most people want to walk around and feel the space for themselves. To sell a house you want a buyer to be able to imagine themselves living there, not someone else.

We've looked at a few FSBO's, and I came away with the same impression. There's a reason why realtors hang out in the kitchen during an open house.

[Rick Lee]

I used the same realtor to sell my first house and buy my second one in VA at the same time. He gave me 1% back on each deal, which was great, since the new house cost more than the one I sold. Basically, the commission cost me under 4% and I probably would have had to pay someone's buying agent 3%, had I gone FSBO. So I think I got a lot value for the extra money.

[jyl]

I bought and sold my first house with no realtors involved on either side in either transaction.

Holding the open houses is a pain, and back then realtors steered their clients away from FSBO houses (I think they still do) so it took quite a long time to sell. But the market was the opposite of hot. When it comes time to do the negotiating, draw up the contract, do the disclosures, handle the escrow, etc, you need to know what you are doing. I was a lawyer at the time, read up on the process, studied the form contracts, really worked on the disclosure, etc. And I got a good escrow agent who really helped me understand what needed to be done and when.

[red-beard]

FSBO to me usually means the owner wants more than it's worth...

[legion]

Originally Posted by red-beard

FSBO to me usually means the owner wants more than it's worth...

I ran my idea for a starting price past an appraiser friend, and he told me that I am middle of the range for my subdivision.

I'm also in the hottest-selling subdivision in town right now.

I'm going FSBO because it will maximize my downpayment on my next house. If I go FSBO, I can put 20% down. If I go with a realtor, it drops to 16% down.

[Chocaholic]

If you're looking at one of his listings, and you tell him you're selling your house FSBO, and haven't even put it on the market yet, he would be smart to run from you. You're essentially wasting his time and money.

Don't mean to be critical of you. But from a business perspective, why would he invest his resources in a prospect that's clearly not serious. In this market, FSBO's are not likely to result in a quick, or reasonably quick sale (unless you're in the biz yourself).

What chance does he have of selling you a new primary residence if you've not even started marketing yours? And worse, after you've stated you're going to DIY.

If you're serious, let him provide a valuation, and if he's a good guy, give him the listing.