FSBO All You Need to Know About Brokers - Real Estate - Selling


FSBO All You Need to Know About Brokers   by Wee Dilts

in Real Estate / Selling    (submitted 2010-11-11)

Most For Sale by Owners try to avoid brokers, after all they're selling by owner to save the commission, Right?

That could be a mistake:

* Brokers have buyers

* Brokers have information

* Brokers offer different programs, it's no longer just 6%

Learn how to use what brokers have to offer and still sell FSBO.

Most FSBOS avoid brokers because they don't want to sign a listing agreement.

You can offer a broker coop, pay a broker only if they bring you a buyer and close the transaction.

A coop fee is usually 2.5 - 3%. Many sellers offer a flat fee rather than a percentage; however, it can be anything. The rate is not fixed.

If you don't want to offer any coop to Brokers then learn to say "No."

Real estate terminology:

* A Broker is licensed to sell real estate and to supervise other licensees.

* A real estate agent is licensed to assist with buying and selling real state. They must work for a Broker.

* A Realtor is a member of the board of Realtors and may be a Broker or a licensee.

We've used the term Broker for all references to licensed persons.

Brokers have information which will help you determine an asking price. Most Brokers will provide a free market evaluation. It will include recorded sales. A recorded sale is a fact.

If you decide to list with a Broker, use the Broker who has been helpful.

Why an offer a coop to Brokers when you're selling by owner? Because Brokers have qualified buyers.

* To sell, you must have buyers.

* Brokers have buyers.

* Approximately 90% of buyers work with a Broker.

* Are you willing to turn away that market?

* If you pay a coop fee to a Broker, you're still saving thousands of dollars.

Notify Brokers that you're offering a coop:

* Hold a Broker open house.

* Send invitations.

* Take flyers to real estate offices.

* Serve refreshments.

* Ask for an opinion of value.

* Invite offices to include your property on their weekly tour.

* Let them know you are willing to coop.

* Encourage showings.

Brokers are not the enemy.

In the past, a for sale by owner had a choice of gutting it out on their own or caving in and paying a full 6-7% commission.

Today there are alternatives. Times have changed and many Brokers will work with a FSBO in some manner other than a full listing service:

1. Some companies offer an exclusive agency listing which allows you to continue marketing as a FSBO, and if you sell the property with no Broker involvement, 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 the FSBOS with an exclusive agency agreement. This type of contract allows you to continue marketing as a FSBO, offering a coop fee to a Broker if the buyer comes through the MLS.

3. An exclusive right to sell agreement takes away your right to sell FSBO and you'll pay the listing company no matter who finds the buyer.

In recent years a variety of FSBO programs have sprung up. The original company offering such services is owned and operated by the author in the Colorado Springs area.

Call the local Multiple listing service and ask for Brokers who offer alternative listing plans.

Most people sell by owner for two reasons:

1. They want to save the commission.

2. They want to remain in control.

Both opportunities are available. Decide how you want to proceed.

The Brokers Are Coming!

The sign's in the yard, your ad is running, your neighbors have been over to ask why you're moving, the Brokers are coming.

You'll get calls from Brokers. Don't bother putting "No Brokers" in your ad, because they'll call anyway.

A "For Sale by Owner" sign or ad is a flag that says, "I have a house for sale! Help me."

Warning, not all Brokers act professionally.

When you meet Brokers there are warning signs if a Broker is in violation of the Realtors Code of Ethics. Be aware of these unethical practices.

Warning Signs:

* A Broker tells you commissions are fixed.

* A Broker states you can't sell without a Broker.

* A Broker quotes a selling price much higher than quoted by other Brokers.

* A Broker says he has a buyer but won't bring them unless he has exclusive right to sell agreement.

* A Broker bad mouths fellow Brokers.

* A Broker tells you that you have to pay a certain amount of commission, in order for Brokers to work your listing.

* A Broker tells you that no one works with a certain Broker.

These are not professionals. If you hear any of these comments, run away!

A Broker or agent who makes such remarks is in violation of federal antitrust laws and could be convicted for price fixing.

Good news: there are more professional Brokers than unprofessional ones.

Just a few more tips:

* Never sign a contract without sleeping on it.

* Sales people are trained to close the sale.

* You have a right to think it over.

* There is no three-day right of recision once you sign a listing agreement.

If you decide to work with a Broker, pick someone who is:

* honest

* helpful

* concerned with your welfare.

Summary

* Brokers are the best source of real estate information. Ask for help.

* Brokers are coming. You can't avoid them.

* Learn how to use their expertise.

* 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 unprofessional Brokers.

Good Luck Selling!