The Real Estate industry is drastically changing with the ever-improving advantages of the Internet. For Sale by Owners [FSBOs] are now empowered to showcase and market their homes in a professional manner that was formerly only available to Real Estate Sales reps.
Well folks, those days are over. In today’s society, we have an ever-changing outlook on how real estate works.
For Sale by Owner homes are often a sore spot for licensed agents who believe that only they have the skills, resources and experience to sell. On the other hand, For Sale by Owners are determined to do everything without a Sales Agent because they don’t want to pay such expensive rates.
For Sale by Owners now have resources and information available to them to sell their homes themselves with confidence and proper knowledge. And Real Estate Agents have the comfort in knowing that not everyone has the time or desire to sell him or herself. So where do we go from here? Well… to the Buyers of course!
It’s a well-known fact that both For Sale by Owners and Agents need buyers in order to create a property sale. So, is sharing a listing an option? Yes! A private homeowner can market their property as a For Sale by Owner without listing the property and still offer a commission to any Real Estate Agent who brings a buyer to the home. This commission is negotiable, but most agents do expect the full buyer’s side “standard commission sale”, which is about 1/2 of the full commission of a listed property.
This is one of the many ways For Sale by Owners and Agents can actually work together to sell property. A Buyer will buy the home that meets their needs, wants and budget, regardless if it’s a listed property. So buyers who are interested in a private sale should not be excluded by either party- the Licensed Agent or Private Seller.
The Power of Web Marketing
Buyers shop the Internet first. Statistics show that as high as 92% of the people interested in buying real estate check the web before any other source. Agents use visible sources, connections and marketing designed to draw the attention of buyers. One of the most attractive advantage statements or “catch lines” used to attract buyers is: “The Buyer does not pay the real estate commissions… the Seller does; so why not use an Agent to buy?”*
Note: *This statement can be argued and quite rightly so- the buyer always pays the commission. How? Because it’s typically part of the sale price. But that’s another story in itself.
Historically, when showing prospective homes, the Agent skipped over or ignored the For Sale by Owners and only showed potential buyers listed properties that were represented by Real Estate Brokerages. That way, if the buyer decided on a home, the Agent would be reassured in receiving the commission he or she earned.
Given that times are changing, and For Sale by Owner networks are growing, Agents are newly recognizing For Sale by Owners as legitimate venues for available properties… which leads us to the phone call saying: “Hello, I have a potential buyer for your home.”
This does not require a listing contract! The Agent is not selling [or marketing] the home… you are! Bringing a buyer to the home is half the transaction and would constitute half the commission or whatever compensation to which you have both agreed upon.
So… How can Agents and For Sale by Owners help each other?
1. Commission Agreement
In sum, an Agent can now include a For Sale by Owner’s home without a listing contract and brokerage signs in place. In exchange, the For Sale by Owner agrees to pay the Real Estate Brokerage a commission should the agent bring a buyer to the table. This is done through a document called a “commission agreement”; this is not the same thing as a listing contract and should only be completed with a specific buyer in mind.
2. Open Houses
Another option is this: the Agent could host Open Houses for FSBOs with the potential incentive of not only selling that home, but also interacting with buyers who may not be interested in the particular home, but are still looking for others that might suit their needs even better- a win-win for the Agent if not the FSBO, but the important thing is that the agent stay motivated.
3. Market Evaluation/Pricing
An Agent could also prepare a Market Evaluation (one-time service) for a For Sale by Owner to assist in pricing their home. In exchange, the For Sale by Owner could forward any names of buyers who were not interested in their home, but may still be looking in the area. Keep in mind: you must have the express consent of buyers when forwarding their contact details to a third party. The Privacy Act comes into effect here.
All of these options are available with the selection of the right Agent, though not all Licensed Agents are willing to cooperate with FSBO’s! But as the world of traditional real estate shifts new power into the hands of homeowners, many Agents can see the benefits of working together with For Sale by Owners. If you are thinking of selling privately and want to know if your local Agent (friend or family recommendation) is willing to assist… just ask them! Either way, selling privately will save you thousands in commission fees.
If you haven’t already, check out CanadianHomeFind.com’s Selling Packages.