News

Brokers Are Not the Enemy – Six Percent Commissions Are

Talk to Brokers but don’t pay six percent commissions.

FSBOS don’t want to talk to brokers. That’s a mistake. A broker exante review is your best source of information. FSBOS avoid brokers because they don’t want to sign a listing agreement.

Definitions:
* 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.
In this article, we have used the term broker for all references to licensed persons.

Accept as fact, brokers have information you need. Ask them for a free market evaluation. If later you decide to list, use a broker who has been helpful. Ask them to include recorded sales because a recorded sale is a fact.

The Brokers Are Coming!

The sign is in the yard, your ad is running, your neighbors have all been over to ask why you’re moving, and the brokers are coming. You will 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 green flag that says, “I have a house for sale! Help me.”

Decide if you willing to pay a reduced commission or a co-op fee. A co-op fee is usually 2.5 – 3% paid to the buyer’s agent; however, it can be anything. Don’t let anyone tell you the rate is fixed. Many sellers offer a flat fee rather than a percentage. If you don’t want to offer any co-op to brokers then you must learn to say “No.”

Why Brokers? Because They Have 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 co-op fee to a broker, you’re still saving thousands of dollars.

Here are a few tips on how to work with brokers if you decide to co-op:

* 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 co-op.
* Encourage showings.
* Do not try to steal their buyers!

Remember brokers are not the enemy.

There are alternatives to Full Service.Times have changed and today many brokerage houses will work with a FSBO in some manner other than the traditional 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 co-op 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 and the selling company.

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 in your area for brokers who offer alternative listing plans. Programs that let you stay in control

We have found that people who sell by owner do so 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.

Red Flags Alert: When you meet with brokers there are Red Flags that warn you a broker is in violation of the Realtors Code of Ethics. Be aware of these unethical practices.