Posted on 01/02/2006 9:48:23 PM PST by ncountylee
MADISON, Wis. - Across the country, the National Association of Realtors and the 6 percent commission that most of its members charge to sell a house are under assault by government officials, consumer advocates, lawyers and ambitious entrepreneurs. But the most effective challenge so far emanates from a spare bedroom in the modest home here of Christie Miller.
Ms. Miller, 38, a former social worker who favors fuzzy slippers, and her cousin, Mary Clare Murphy, 51, operate what real estate professionals believe to be the largest for-sale-by-owner Web site in the country.
They have turned Madison, a city of 208,000 known for its liberal politics, into one of the most active for-sale-by-owner markets in the country. And their success suggests that, in challenging the Realtor association's dominance of home sales, they may have hit on a winning formula that has eluded many other upstarts. Their site, FsboMadison.com (pronounced FIZZ-boh) holds a nearly 20 percent share of the Dane County market for residential real estate listings.
The site, which charges just $150 to list a home and throws in a teal blue yard sign, draws more Internet traffic than the traditional multiple listing service controlled by real estate agents.
Madison is home to the University of Wisconsin and a city where the percentage of residents who graduated from college is twice the national level. It is also a hotbed of antibusiness sentiment, which turns out to be the perfect place for a free-market real estate revolution. Bucking the system is a civic pastime here.
(Excerpt) Read more at nytimes.com ...
What preperations are you suggesting?
The only thing a realtor adds to the process is another person to sue if something does happen. Realtors do make some buyers more confortable with the buying process, but in reality offer little to the process except access to listed homes. Most states require disclosure forms, so someone who doesn't provide one is in more legal jeopardy by not providing one. Your real protection comes from using good title companies, inspections, and appraisers.
Please, a little more detail about your house sale on ebay. Interesting.
Exactly. Most of the time buyers do most of their looking on their own now---on the internet. But then they still have to call the agent to get in the door to look at the property.
This will change.
I lump realtors, lawyers and car salesmen all in the same category. They're thieves.
It is easy to sell a house yourself in a fast market. When the market softens it won't be quite so easy. Out of town buyers will never see a for sale by owner site or a sign. When the market gets slow, buyers will expect to save the commission. They will deduct the amount they think the seller is saving when making their offer. So often the seller makes the same profit without the benefit of a realtor. Every year I sell a few houses that people tried to sell themselves and got into trouble with unqualified buyers and home inspection issues. I've been around long enough in this business (29 years)to see many different business models. There is always room for the for sale by owner. In fact, my menu plan allows sellers to sell the home themselves without obligation to pay a commision or to pay me a reduced commission for just "managing" the transaction. My best advise to FSBO sellers is to be sure they are financially benefiting from the reduced or lack of commission, not the buyer. Don't give it all away to the buyer. Otherwise, they might as well have the benefit of using a realtor.
Hey guys, realtors aren't all bad! I give back a lot to my community in time and money.
You don't have to be anti-business to be pro free market.
A relator just maybe can help you sell your home to a first time buyer. Otherwise, using a realtor is a waste of money in a steady market. I used a realtor one time, saw how tragically easy the process was and have done things myself since. Just make sure you have current forms and know which ones to use. A monkey could fill them out and the lein holder will make sure their behinds are covered. I have paid myself to have my home inspected by reputable inspectors to show potential buyers. I have also offered to buy them a new home insurance policy. Just a couple of things to ease the buyers. Some are skittish of FSBO.
Puking out 6% is crazy. Last time I sold my house I paid 2%. I advertised it myself. A realtor brought me a buyer. Standard 6% is split between listing broker and selling broker, so I told her on the front end that nothing over 3% would be considered, since I had "listed" the property. We were able to come to a 2% figure nicely, and I still got someone who had experience to walk the buyers thru the process to make sure we had no unpleasant surprises at closing (actually, a good loan officer and atty are all that are needed)
Brokers provide a good service and deserve to be paid for it. If you want to use them and pay for the convenience, go ahead. If your house is desireable and priced right, it will sell itself with no help. I would pay a realtor for a CMA (even though they will do it for free), put a sign in the yard, and advertise it on the internet and local paper. If it doesn't sell right away, let realtors know that you will not pay a listing fee, but will pay a sellers commission to someone who brings you a buyer (usually cuts the commission rate in half).
Bottom line is: don't be afraid to NEGOTIATE. Polite but firm assertions of what you are willing to pay for services will only offend realtors who aren't worth your time, anyway.
I am not sure about those deals, but we have a guy who lists for 'free' if you agree to use him as an agent to buy a home.
I think one per cent reality is what you get about 3 hours into some pretty heavy shrooms.
As a minimum, I would demand: 1) a copy of the letter they will mail out to other hot-shot realtors describing and picturing your home (no e-mails, 37 cent postage LETTERS)
2) a listing they plan to pay for (in writing, remmeber) in the local real estate mags, with a commitment on how often they plan to run it.
3) commitments to run stuff in the local paper (how often, which papers, what size ad, etc) to advertise your dwelling 4) any marketing plan they have (be specific and get COMMITMENTS IN WRITING)
You are contracting for a service, and are making a HUGE payment for the service. Just dropping 6% of the value of your home so a lazy agent can throw the property in the Multiple Listing Service and hope another agent sells it for them is a poor business plan.
I recently ssold my home myself through a for sale by owner website. This one, howver, did provide a loal office and free market analysis. They conviced me to market my home at a higher price than I had been asking. It was on the net in 6 hours. Within 3 days my ad had over 500 hits. I had 15 telephone calls, 10 personal visits from prospective buyers and a sale in 5 days. Total cost to me $600.00.
More details please
More details please
More details please
It's one thing to pay 6% when the price of a house is $200,000, because this covers the 3% the listing agency sucks up, plus a few hours of the agent's time and advertising costs. A few years later, when the same house is going for $800,000 and sells in ten minutes, paying 6% is ridiculous.
A lot of houses in my area are sold with the help of a "virtual tour," however, and the companies that shoot these tours only do business with licensed real estate agents. Realtor.com will also only accept ads from licensed real estate agents. So if you're selling FSBO, options are more limited: you have to pay for a newspaper ad, which just doesn't reach or appeal to as many people.
Real estate section of eBay:
http://realestate.ebay.com/?ssPageName=MOPS123:HRE01
I really can't fault the "virtual tour" people. Realtors actually [ahem] PAY them to do these things, so going to alternative sources that cut out their bread and butter would be stupid. That is the beauty of the market, though. Find another one, or do it yourself.
Nor can one legitimately gripe about not being able to get your picture on realtor.com or other sites. Those people pay good money for the site, and I don't see why they should be forced to let me hitchike for free when the rest of the passengers pay full fare. The bus driver has to eat, you know.
The point of the article was that there are ALTERNATIVE markets. In a free society, emerging markets always means two things: 1) those who currently dominate the markets are threatened, and 2) consumers benefit.
I am not "anti realtor." I believe that the good ones can provide a needed service, and, like everything else, should be paid for their labors. I am just in favor of people educating themselves and not wasting money. Looks like you are, too.
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