patrick.net

I personally think a lot of people are getting smart. It's not a greed thing or even a "fed up" thing. Why would you pay someone tens of thousands or dollars for something you could do yourself? It's not like craigslist doesn't work. It's proven to work in the SF Bay area. The only reason a person would give up on FSBO is if they had no buyers and they were really desperate and willing to take a loss. You could put an add in the open homes section of the sunday paper with the same wording that realt-whores do.

3% of 700k is 21k, and 6% is 42k... that's just insane!

Wow! Where do we start on this one?

Obviously when appreciation is "Fat City" and sellers are already working with their landscaper on the next dream home who has the time to bother with the low lifes that are buying that "dump" they used to live in? Let the realtor orchestrate the bidding war!

Well, I think that time has come and gone and I believe there are two basic "types" that go FSBO.

The brazenly over confident that "know" that hiring a realtor, tax accountant or doctor is just a waste of money. They're a HS grad. and they've gotten this far in life. Besides they can use the "extra" money to take that well earned vacation.

The trembling that are pretty sure they should have sold in______ and are now furiously scrambling to get out from under something they KNOW they can't afford.

A third potential category is the older empty nester couple that don't care when, if or for how much their place sells for. They've always wanted to live in_______. If it takes longer then so be it.

Oh, btw I think most everyone "should" go FSBO if they at all can. Scott J is right but my comments were more based on why all the interest in FSBO "now".

I think FSBO are all greedy, or at least frugal. However, only a small portion of them are smart. To do FSBO properly require figuring out the right price and figuring a way to crack the MLS monopoly. It also means being familar with the process. A lot of FSBO on C/L and elsewhere think they can stick a sign in the front yard and ask for above market prices.

On top of that, I think a good RE agent can have a lot of pull in a RE office, and direct undiscriminating buyers towards a listing. This isn't a huge deal in a hot market, but will be important in a cold market.

I've noticed quite a few people in my neighborhood doing this. In every single case, the owners are usually poor, and asking way, way way more than the house is worth. We're talking 1.2 million, 960k, 875k respectivly on smaller 2 and 3 bedroom houses. Two of them are always open. They sit with signs up around the block 24 hours a day. This has been going on for months now and none are selling. The stupidity is that these are most likely less monied long time residents who would pocket most of the sale price, yet it's taken over 4 months for one of them to "lower" the price by a mere 7k. I would call them both greedy and stupid.

SHE'S BACK! ASTRID IS BACK EVERYBODY!

Had me worried ther for a little bit but she's back, and in a big way!

"However, only a small portion of them are smart"

SQT had C/L figured out some time ago. Home of the desperate........ and the delusional.

That's not to say it can't work but so many of the listings I've seen come under "courting a lottery winner" b/c there is no way the seller's asking price can be met with a loan!

Good to have ya' back astrid!

To add more to my previous post, I just find it so stupid that a long time resident simply can't accept the case of selling at or possibly below market. I mean- cmon.. $650k for a piece if shit overated prefab? You can STILL buy a very, very nice home in a very nice area somewhere other than CA. I'd do it in a heartbeat. I hope these greedy SOB's get screwed.

O.K. willywhopper2 is back!

"greedy AND stupid"

I like it.

DinOR,

My ISP went on the blinker for most of this week.

I won't be here long though. My together-together time with the ole boyfriend is coming up. I'll be out of action for the next couple weeks as we go see more of God's glorious Roadrunner and Coyote country.

SQT,

I'd have to agree. It would have to be one sweet deal for me as a buyer to contemplate that. More of a "one of a kind" type of deal. And yes FSBO's in Oregon seem to be priced above broker listed homes. Weird huh?

I think the whole opinion of people who might have owned their property pre-boom is very diffrent than those that bought during or post. It would be like if you owned a 93 Chevy Lumina. Big deal. gets you point A and B. Suddenly, people will pay you 60k for it. Holy crap! So it's like magical money from heaven. Doesn't matter who has the money or if it's overpriced. The neighbors got "X" for theirs, so you'd better get more for yours. They very likely view the people paying this kind of money for a house totally stupid or insane, so if they price it into the stratosphere, then there's just surely got to be a bigger idiot out there. The fact that people were willing to pay more than anyone ever expected for a stucco and wooden box is a mystery enough, so logic doesn't seem to apply. As a result they ignore basic economic fundementals and the changing selling atmosphere.

astrid,

Bummer. But at least you'll be able to provide us with some "on-sight" intel from CO. I mean have some together-together time w/your boyfriend!

I tend to agree that most FSBOers are either too greedy, too delusional, or too ignorant (or uninformed). There should be enough alternatives to full-commission agents and brokers now to satisfy the frugal. For the smart, they realize that selling in a sinking market is EXACTLY WHEN you need one of those few good agents on your side. FSBO in 1999 or 2002, sure you could probably have pulled it off with just a sign in your yard. But that was an aberration, not the norm.

When my parents were selling, we got probably the top agent for their home area and she asked 2% for herself and gave us 6 hours (which came up to be more like 10 hours) of handyman service. She still made money, but my parent s would not have sold for nearly so much and so quickly if she wasn't involved.

If I was an experienced seller and didn't mind the hassle, I may go FSBO and offer 4% to buyer's agents or as concession to walk-in buyers. But I sense most FSBO are greedy pennypinchers with little awareness of the market. As WWII said, very few of those types of FSBO seller can sell - and then 6 months later they call in an agent to sell and still no nibbles (because the prices are still too high). Two years later, the 5th agent used finally gets some fools to buy, for way below the original posted price but still above the market price.

Robert Cote'

Sounds like quite an occasion! I must admit, I'm not altogether suprised by the "listing differential" when we stop to figure in the FSBO's. Can't say that Wrightwood is a typical community but if your assesment is reasonably accurate the inventory could be much greater than any of us can imagine. Perhaps the NAR should start to put a disclaimer* on their reports.

*Our data reflects as accurately as possible the number of single family homes for sale at the time of this report. However; scumbag, greedy and stupid FSBO's are beyond our scope of responsibility to quantify. NAR TM

There are discount services now that will list a house on the MLS for less than $1,000.00, so I don't buy the argument that FSBO lacks exposure.

How many people now use the MLS as a starting point? A lot.

You can easily hire all the necessary attorneys/accountants for a fraction of the cost.

I see web-sites sprouting up to list nationwide soon, I believe the MLS monopoly is soon to be a thing of the past.

RE Agents are in a similar position to travel agents a few years ago. When large numbers of sellers are underwater, alternative means of advertising and closing sales will proliferate.

tsusiat,

I know it seems like I'm jumping all around on this topic but I do feel somewhat conflicted? I suppose there will always be those that prefer to go full service. Enough to support 500,000 realtors in CA alone? Doubt it. Will realtors cease to exist altogether with widowed grandmothers running their add on Craigslist? I doubt that too. What will likely happen is that just as the brokerage houses have done they will offer different levels of service on a sliding matrix. You're willing to only spend X amount? Great! Love to have your business! When will you be stopping down to pick up your sign? Money is no object? When will you be available to have our "moving coordinator" stop by? And everything in between. Me? I think most folks will elect a "hybrid" between those two extremes but if as George suggests, and the banks get involved....... nobody's gonna be happy.

What is really needed is the equivalent of MLS that can be browsed by cellphone as you drive through a neighbourhood you like. Now that could really take off.

*not dot.com advice* ;)

Sorry this is off topic, but can anybody here who knows coding explain the mechanism by which sites like housing tracker are pulling together their stats?

http://www.benengebreth.org/housingtracker/

Is it likely to be proprietary? If so, how could the site access the data out of the MLS without problems?

The reason I ask is I was mulling trying to do something similar for my local market, but I don't even know where to start.

Thanks.

BuffPilot,

Great technique, and it sounds like you were lucky to be in an up market. Did you sell to an incoming AF member at a small base? Did your network include Housing Referal? As an AF member, do you have experience from several PCS moves in home buying.?

Back in the mid 90's, when we were in a slow market, I bought from a guy going PCS (transfered to a new base, for you non-military types). I caught him before he listed with a Realtor and offered to assume his VA Loan and cover all closing costs. He accepted, and the closing went well. He got to stay in the house until the movers came.

I had made this offer to another fellow, but he turned it down. He listed and his house sat unsold for months after he moved. When it finally sold, it was for slightly less than he paid for it originally. He was also out the commission along with the mortgage payments on his empty home.

I do not understand the "greedy" tag used in several posts. I've often noticed that "greed" is when the other guy wants to keep his money.

newsfreak,

Glad you like it! I've seen it work well in other arenas and thought it might apply here too. Many are already aware that "Di-Tech" belongs to GMAC Finance. So they work both extremes of the market. Anybody ever notice at the end of their infotainments (commercials) they put the "fine print" up on your TV screen for about .7 seconds? Anybody ever able to read it?

On the other hand realtors have GOT to step up their game! If they expect to survive let alone thrive they are going to have to bring so much more to the table it just isn't funny. I don't know. It's not really my problem to figure out how they can bring value to the table. For one thing they should stop aligning themselves w/ all of the traditional foes of the client. The lenders, the title companies etc. Help these homedebtors figure out a way to pay off their home in 10-12 years vice 30 or 40 for a start!

newsfreak,

Sorry for not giving a quick reply to your quiry.

We're hitting the Utah and Arizona portions of the Colorado Plateau, and yes, we'll hit Blanding at some point. The plan now is to spend about 2 weeks in the area and see Zion, Capital Reef, Cedar Break, GSEscalante, Canyon de Chelly, Bryce Canyon, Havasupai falls, Glen Canyon NRA, Antelope Canyon, and Petrified Forest NP.

DinOR,

If I see RE craziness, I'll snap some pictures and send them to you.

I don't want to imply anything lewd by together-together time. My boyfriend and I just live so far away from each other that most of our together time is talking on the phone and surfing the internet together.

SQT,

Good point, athough I would think overpricing is more from ignorance and short-sightedness.

I wonder if the FSBO you have seen are overpricing because they assume Realtors are underpricing. That is, they think a Realtor is more interested in a quick sale and commission than max seller profit.

Headset,

I don't think FSBOs are all stupid, just the vast majority of the ones I've seen. There are a couple people here who FSBO in hot market, priced correctly, and got offers pretty quickly.

Nothing wrong with greedy. Most people are greedy, they want the best life for themselves and their family, that's totally fine. The problem are people who are penny wise and pound foolish. They're not willing to put in the initial investment of time and money to market their house, or hire an experienced agent handle the job. As a consequence, they end up spending much more time carrying a house they no longer want.

DinOR says:

Help these homedebtors figure out a way to pay off their home in 10-12 years vice 30 or 40 for a start!

Excellent! That would be a real value-added service. But, it would lower their percentage if people got the mindset that a house should be a place to live and not a long term sentence.

newsfreak,

Thanks for the tip! And I'll be on the watchout for crazy RE. I know Northern AZ and Southern UT is getting some NV and CA money, and it'll be interesting to see just how much.

Our primary focus is north of the Colorado River. If time gets short, we'll probably cut out the AZ stuff for another time. A lot just depends on the amount of hiking involved. We've done a Oakland to both rim of Grand Canyon (with a total of about 10 hours of hiking) and back within 4 days, so 2 weeks seems like utter luxury to us.

I know for a fact that one of these FSBO's on my block is an idiot, greedy, or both. The reason I know this is that the house has MASSIVE curtains with the virgin mary on the front. Instant turn-off if you happen to be non-catholic. This is the most insanely priced FSBO home I've seen. single story, sort of shoddy, for a supposevly reduced price of 1.2 million. He had a yard sale a few weeks back. I stopped by and he has a cheap-o plastic Sears drill. I used to sell power tools, and a plug in drill like this one goes for 30 bucks new. He wanted $40 bucks for his used version. When I told him that they didn't cost that much new, he shrugs, goes back to his stool. The guy is just ignorant.
On the other hand, while I sit here and use the word: greedy it's only because I think the whole California housing scheme in itself is fueled by greed and that longterm, it'll bite everyone in the ass in the form of a lagging economy, crappy schools, a brain drain, and a lower quality of life that's already well pronounced. At the same time, If I had never had any money and my old house was worth 1 mil, you bet I'd try to sell it. At the same time I would know that what I was selling, at the price I was asking was asanine.

I would not be surprised if sociopathic scumbags target FSBOs looking for contracts with gaping holes in them.

I hadn’t even thought about this aspect. Boy, now I’d be too scared to list without a realtor(tm)!

SQT -

come on, isn't that what the smart FSBO hires a lawyer for? If there are gaping holes in the contract, isn't the lawyer liable?

Somehow, I doubt the average real estate agent knows more about drawing up contracts than the average lawyer.

Of course, if the owner wants to write the contract on a sheet of loose-leaf paper, well then.........:(

tsusiat,

I think DinOR nailed it earlier. Most FSBO are the sort of people who are too cheap and too ignorant to regularly visit doctors, consult a lawyer, or use an accountant. Sure there are some smart and informed FSBO who can do it right, but they're definitely the minority.

"I would not be surprised if sociopathic scumbags target FSBOs looking for contracts with gaping holes in them."

"I hadn’t even thought about this aspect. Boy, now I’d be too scared to list without a realtor(tm)! "

The above sounds like a NAR ad! Not using a Realtor does not mean you don't use and attorney or title company. The main job of a Reator is to find a buyer, closings are handled by said lawyers or title companies (the cost of which is not included in the Realtor commission). In some states, Realtors can provide a preprinted sales contract, but that is written to protect the Realtor. How does a scumbag criuse for bad contracts? A contract is only signed after a buyer is found.

If the FSBO uses a contact he got from OfficeMax, I would have to say he fits into Astrid's "pennywise and pound foolish" comment.

SFWoman,

I think there's a lot of good reasons to be an agent-less buyer, even though the buyer pays the commissions. Most FSBO seems to be run of the mill ordinary or downright awful. In the DC area, I don't think I've ever seen a FSBO on a house that's worth north of $1.5M.

-buyer
+seller

:oops:

buffpilot,

Huh?

A bad agent is next to worthless, but a good agent can really push a deal through in a way that FSBO cannot. Also, I bet most of California no longer have the standard 6%.

Headset,

I didn't know you were active duty? I was Navy 1979-89 and AF Reserve 89-93? Anyway, if realtors would put down the commission "bong" long enough to clear their heads they'd realize that as this boom goes bust all of their traditional allies and relationships are going to be looked at under a microscope. They keep going back to the same distribution channels! Like a moth to light. IF: they were to work with financial planners and the like they could find an extra $50 a month to apply to the buyer's credit cards and get those knocked out. Then go after the car loan/s. With all of the $'s Americans pump into those black holes now FULLY applied to their clients mortgage they can whittle that down in short order! This way the would have sold you a house and didn't just drop you off at the corner and tell you Good Luck! And in the end everyone "get's more client". With your mortgage "Paid in Full" I can set up your kids college accounts, the insurance guy can sell you a long term disability policy and in the end the realtor can sell you a 2nd/vacation home. We all just need to change the way we think.

Not listing does not mean you do not get the services of a Realtor.

Since many buyers only know to go to a Realtor, you have quite a few buyers agents out there. I know several folks who have sold FSBO recently, with the buyer bringing in the Realtor. The seller just added the 3% commission to the original asking price.

In my case, when I sold a home last year, it wasn't even that. I was approached by several buyers agents who bid up the price. (I did not sell to the highest bid since he was a flipper, the next highest guy couldn't bid higher because he was maxed out on savings plus loan appraisal, so I sold it to the second guy for that). The extra price more than made up for the 3% commission.

Of course, I could just have been a dumbass who underpriced the home.

DinOR,

Like I said before, I think you guys could totally be the future, especially as buyer agents. All hourly fee based. You could do the initial consult on affordability and financial planning. Then have hire some 19 year old to drive the buyers around. Once the buyers find something nice, have a "senior associate" do a walk through and make traditional buyer agent type stuff. Everybody gets good service and everybody makes good money.

@Headset & Buffpilot,

Unless I'm completely mis-reading everyone's comments here, what most people are saying is that MOST FSBOs they know of TEND to be ignorant, cheap and greedy. They are not saying that ALL FSOBs are ALWAYS ignorant, cheap and greedy.

You two would fall into the rare, exception-to-the-rule "smart" FSBO camp.

Going back to the original question of this thread:

In a HOT market, one probably can do away with agents. But then again, as people have pointed out, lapses in legal documents may come back and bite you. So only the very naive and greedy or the pros will take the FSBO route.

But, we are not in a HOT market. We are in a stagnant market. Many FSBO probably because the profit margin is too small. If you are sitting on a 50% (or 100%, or 200%) appreciation, you probably don't mind giving away a healthy percentage to someone who can do the job of selling for you and realize sale ASAP before the market drops further.

But if you are sitting on a 10% appreciation (because you only bought last September), the realtor fees and the mortgage interests you've been paying will drop you into the negative territory. Well, if on top of that your wallet is also very, very tight and you need some money from the sale to help you avoid bankcrupcy, you'll have to sweat yourself this time.

So bottom line: I suspect the majority of FSBO owners have experienced rather dismal appreciation.

DinOR,

I knew you were a Squid but I did not know about the AF Reserve!

I'm a 1980 USAFA grad, I took the early retirement in 1995 after a Flight Surgeon grounded me for hearing. I got to do lots of time flying over Iraq and Bosnia, and got to live in England and Portugal. Also got extended stays in France, Italy, Turkey, Guam, and Phillipines.

That seems like a lifetime ago!

After I got out, I bought up houses, fixed them up and rented them out. I never "flipped,' I always added value. I sold the houses during the recent insanity since the prices were so inflated, and it seemed anybody with a good credit rating was buying and not renting.

Jon,

I hear you, relative to local Boards offering stuff via WAP/WML, what I meant is, if a site was to arrive that offered the ability to type in something like:

1234 Smith Ave, then could return just lines of addresses, phone numbers, links, maybe maplinks for the same area in realtime, well that could take off.

Replicating stuff meant for larger screens just seems cumbersome.