More For Sale By Owner Than Ever?
Not quite, say local Realtors
By Ross Boissoneau | May 5, 2018
With what is undeniably a seller’s market, it seems like this would be an ideal time for a seller to forego the cost of a Realtor and sell their home as a FSBO (For Sale By Owner, pronounced FIZZ-bo). And when you look around, both on the street and online, you do see signs of an increase in the number of FSBO’s. Or do you?
“I think it’s the same (as it’s been),” said Laura Sielaff, a Realtor with Century 21 Sleeping Bear Realty in Empire.
Mark Knapp agreed. “The market is hot. We have a shortage of listings, yet I’m not seeing an increase in FSBOs,” said Knapp, the sales manager of the Charlevoix office of Coldwell Banker Schmidt Realtors.
Maybe it’s just the fact that in years past, those looking to sell their own home would put a sign in their yard and maybe run a classified ad in the paper. Today, they can take advantage of many of the same tools Realtors use. Sellers can take digital photos with their phones, post the information on their own Facebook page, Craigslist and even real estate sites like Trulia and Zillow, and put a sign in their yard. In other words, FSBOs may be no more prevalent, they’re just more visible.
So if the market is hot, then why aren’t more people taking advantage of personal selling, eschewing the cost of paying a commission? Knapp said he thinks the reason might be twofold, and one of them is the fact the market is particularly strong right now, as is the rest of the economy. “They think, ‘I’m too busy. I can do it and save some money, but everyone is doing fairly well.’”
Knapp said some believe that if their home can sell for a several thousand more dollars now than it would have in the throes of the recession, letting someone else do the work for a small portion of that might be a good tradeoff. “People are just too busy” to do all the work marketing and doing the transaction themselves, he said.
For those who don’t mind the work, however, selling their home does have appeal. David Berg is in the process of selling the home belonging to his mother-in-law, Jacqueline Kidd. “It was her decision not to use a Realtor. That’s why I chose to help,” he said.
Berg has experience in facility management and had previously bought and sold homes, so as he said, “I have a lot of experience in facets of real estate.” He started by researching a couple different title companies and got forms and necessary paperwork from the one he selected.
Berg researched prices online for properties similar to his mother-in-law’s. He then took photos and posted the home for sale on sites such as Craigslist, Facebook, and Zillow. “We had two showings within a week,” he said. “The response has just been incredible. It’s really a pretty simple process.”
Adam Sevensma would agree — to a point. He just sold his Lake Ann home, which he’d been renting out since he moved to Massachusetts. He was contacted by his renters, who said were interested in buying the house. That got his mind going in that direction.
The renters eventually changed their minds and bought elsewhere, but they told their best friends, who decided they wanted the house. All parties agreed on a price, and then it was just a matter of doing the paperwork. Sevensma enlisted the aid of Pam DePuy, a family friend and Realtor with the Martin Company who agreed to act as a transaction coordinator for a significantly lower cost than acting as a Realtor. “She gave me information and said when we agreed on a price, she would draw up the purchase agreement,” he said.
For her part, DePuy said she has occasionally acted as a transaction coordinator. But like Sielaff and Knapp, she said she hasn’t seen an increase in the number of calls for just that small portion of her services. She said the advantages of using a Realtor include bringing the most and right buyers to the table. In fact, had Sevensma’s deal not gone through, she had another buyer lined up.
All told, it worked great for Sevensma. “I decided to sell in mid-February and closed April 25,” he said.
For those looking to sell high-end homes, the Realtor’s commission will mean an even more significant amount of money. Six percent of $250,000 is $15,000. For a home priced at $600,000, the amount is $36,000. While that’s a lot for the seller to give up, marketing those homes is not as easy, particularly if it’s a vacation home where the buyer is likely to not be from the area, or even from Michigan. “The buyer may be from California or Texas. My last transaction, the buyer was from Houston,” said Knapp.
Sielaff also warned that what might seem a smooth transaction might come back to haunt the parties at a later date if the title work and other paperwork was not properly done. “People watch HGTV and think they know everything, but there’s a lot to it. Points on the mortgage, appraisal — there’s a lot of things going on that most people don’t understand. What I worry about is if they don’t do it properly, the next time it’s sold, it’s a mess,” she said.
Still, there is that cost of doing business with a Realtor — and as shown above, it’s substantial. Choosing FSBO vs. real estate agent depends on the situation and how motivated a person is to take on the process. The tools and technology are there for those who want to do so. But for those who don’t want to take the time to market their home, do showings, and process the paperwork, but who want to make sure they reach the largest pool of qualified buyers will probably still want to go through a Realtor.