Why FSBO's will always need a Realtor

Reblogger Bonnie Vaughan
Real Estate Agent with Re/Max Home Team

Many home owners feel they can save the real estate commission and sell their own home.

When I was first licensed in 1985 we had a one page sales contract.  Legalities and the protections of participants rights have expanded that document to 20 pages, plus numerous disclosures and legal notices which have to be signed by both parties.

The purpose of these voluminous documents is not to make the transaction more complicated, but to bind legally both parties to their respective responsibilities and duties, at the same time protecting the interests of each party.

If a home owner feels they have the expertise to secure all these documents, explain them to the buyer and represent themselves I'm all for it. 

What most Home Owners do not realize is that under Pa Law there is one document they must supply the buyer, and it must be truthful.  This is the only document a seller can be sued for.  Years after the sale, the buyer can take the seller to court if they failed to disclose pertinent and material facts about their home. 

Original content by Gabrielle Jeans

People Dislike Negotiating

There’s one thing that’s truly indispensable about real estate professionals and why we’ll always be needed: our negotiating abilities.  Most people hate negotiating.  Many also assume that a FSBO won’t allow the buyer to have a real estate professional negotiating on their behalf, so they won’t even want to make an offer, even though they’re interested in the home.  They would rather look at homes where they can have a professional doing the negotiating for them.

A FSBO’s Legal Liability

When the buyer and seller are acting alone, they usually won’t have a lawyer.  So they both subject themselves to legal issues and liability.  FSBO sellers nor their buyers usually don’t know a sound legal contract from a bad one.  One party may take advantage of the other, getting them to sign to conditions they don’t understand and will regret later.  For instance, some real estate investors can be very savvy in putting clauses into the contract that are unfair to the seller but which can be easily overlooked.  But when FSBOs work with real estate professionals work they seldom face these sorts of problems.

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Ambassador
716,650
Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495

Bonnie,

We've had three FSBOs on our street in the past year, and each one of them ended up listing with a REALTOR.

Mike in Tucson

October 06, 2011 12:14 AM #1
Rainmaker
603,083
Barbara Altieri
RealtyQuest, Fairfield and New Haven County CT Homes for Sale and Real Estate - Shelton, CT
REALTOR - Fairfield County CT Real Estate

Bonnie -- It's a VERY common misconception that navigating through a real estate transaction is easy. Many FSBOs are of that mindset and they think they will be saving a commission.  They quickly find out they're not the only ones who want to save the commission -- the buyer does also. 

October 06, 2011 09:43 AM #2
Rainmaker
244,274
Bonnie Vaughan
Re/Max Home Team - Scranton, PA
CNE SFR - Buyers/Sellers - Lackawanna & Surroundin

Mike:  Eventually reality hits them.  Negotiating is not a strong set with most people.  Negotiating on your own home can be very emotional

October 06, 2011 06:02 PM #3
Rainmaker
244,274
Bonnie Vaughan
Re/Max Home Team - Scranton, PA
CNE SFR - Buyers/Sellers - Lackawanna & Surroundin

Barbara,  The buyer also thinks he is getting a deal because the seller obvioulsy (in his mind) lowered the price of the house to reflect the commission he is saving.  Surprise folks.

October 06, 2011 06:03 PM #4
Rainer
137,431
Gabrielle Jeans
WebTech Dezine, Gabrielle Jeans Real Estate Coach - Toronto, ON
Real Estate Web Solution, Real Estate Trainer and Coach

Thanks for the re-blog Bonnie

October 07, 2011 10:48 AM #5
Rainmaker
244,274
Bonnie Vaughan
Re/Max Home Team - Scranton, PA
CNE SFR - Buyers/Sellers - Lackawanna & Surroundin

Thank you for the posting Gabrielle

October 07, 2011 11:58 AM #6
Rainer
63,823
Lang Premier Properties
Lang Premier Properties - Clawson, MI
Metro Detroit Real Estate Group

I just had a buyer the other day tell me they were going to go with a FSBO and didn't think they needed me...

I told my client the reasons to keep me and she was surprised with how much us Realtors actually do for our clients!  FSBO owners don't realize it either until they have their home listed for months with no offers.

Many people believe that a Realtor just shows a home and collects a check, they don't actually know all of the background "stuff" we do for them.  That is why when I meet with clients, buyers or sellers, I have a list and give them of all the duties that I am responsible when I handle their real estate transaction.  Each and every person is always so surprised at how much more there is to our business.

October 18, 2011 11:04 AM #7
Anonymous
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elizath

 Most people hate negotiating.  Many also assume that a FSBO won’t allow the buyer to have a real estate professional negotiating on their behalf, so they won’t even want to make an offer, even though they’re Clarks Shoes interested in the home.  They would rather look at homes where they can have a professional doing the negotiating for them.

April 25, 2012 12:19 AM #8
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Bonnie Vaughan

CNE SFR - Buyers/Sellers - Lackawanna & Surroundin
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