HAVEN Realtors

OK, everybody realizes now that the market is tough, competition is fierce and the bottom lines get hurt. So, what would you, as a seller, look to do? Cutting your costs, right? Wrong.

Why do sellers pay hundreds of dollars to advertise on websites like ForSaleByOwner.com? Exactly: because they don’t want to pay thousands of dollars in real estate commissions. And – I dare to presume – in order to make it as easy as possible for a potential buyer to access information about the property, its location and the seller’s contacts. In other words, the whole philosophy of selling “by owner” is to cut the middleman (middlemen) out. So, what’s wrong with that?

Nothing really – unless you are a builder selling your specs. Today, I went on the aforementioned website to look what else is available beyond our old good MLS. Usually, when you look up a property there, you almost always see the seller’s name and the phone number. I said “almost” because that site is also in business of trying to sell you their “find-all-foreclosures-everywhere” stuff (please, don’t waste your money on it) so, “foreclosure property” pages have no address and no seller contacts. Instead, you are invited to “click to sign up”.

But wait. What’s going on here? I open a page with information about a nice looking brand new million-dollar spec and realize that there is no address either. How am I supposed to find it on the site touting their “Lots of Help” thing? Let’s call the builder and ask for the address! I go to the phone number and… where have I seen it? A second later, the light bulb goes off in my head: I’ve seen it just now when trying to check out another new construction on this very website, offered by a different builder. Was there the property address? Nope. Hmm…

I checked 10 other listings: none of them had the property address but all had the same phone number to call. Is somebody representing all builders here? I thought the idea of this “Lots of Help” site was providing buyers with a quick, direct and unobstructed access to sellers… Puzzled, I scrolled down to “Contact Information” and clicked on the web link Inest.com.

Ha-ha-ha! Surprise, surprise! It is one of the Lending Tree’s “babies”! As always, they are standing by to be at your “service”, dear builders! That is, the service of helping you make less money! Because, you know, LT has to give a buyer a 1% rebate when that he purchases your house. And where does that rebate come from? Bingo - your money that you would have otherwise saved had that buyer had your direct contact information and the property address (you do have your nice big sign with your phone number there, right?)

Let’s forget about greedy agents for a second. Yes, they want that 5%-6% piece of your pie but at least you know upfront: they do want to be middlemen and they do want that Exclusive Contract. Instead, let’s talk about noble LT and ForSaleByOwner.com, its “No Commission, Lots of Help” ally.

Lots of help? Sure: if they “help” you sell a $1,500,000 spec, buyer gets a $15,000 rebate (coming out of your pocket) and, of course, plus an extra amount (there’s got to be something monetary in it for LT, too).

No Commission? Well, if you insist on calling it “referral fee”, then be my guest.

So, here is my completely free and no-obligation advice: Ever thought of displaying your direct contacts when going FSBO?

More wisdom to follow.

Technorati Tags: forsalebyowner.com, for sale by owner, rip off

 If you are going “For Sale By Owner”, there is a good chance you don’t want to list your home because you don’t want to pay a 5%-6% commission to a broker. Of course, there is always a small percentage of the homeowners who do everything themselves. And, truth be told, some of them actually do it successfully. But what about the others?

“And why would I want to pay to have my house on the MLS if I already have it on a bunch of websites?” – I hear this question all the time. There are 2 answers to it:  a short one and a long one.

First, the short answer. Imagine that one day you decide to go fishing. You know for sure you’re not going to be the only one fishing today and there are only 20 fishes available for catch. Where, do you think, you would have better chances to catch one of those 20 fishes: when fishing in a pond or in the Lake Michigan? That’s exactly the difference between having your home on several websites visited by thousands of people who look for homes everywhere in the nation and having it on the brokers’ MLS visited by hundreds of agents working with buyers who look for homes exactly in your area!

Now, the long answer. About 80% of the homebuyers nowadays begin their search on the Internet – this is true. But it is also true that about 80% of these buyers end up using services of an agent when purchasing their homes. Why? Because it is always better to be represented and they usually don’t pay for their agent’s services: the commission comes out of the seller’s proceeds at closing.

Do the agents know your home is for sale? No, they don’t. They don’t go on the websites to check the listings, they use the Internet-based MLS because a) the MLS provides them with the most recent information about available properties and b) the MLS listings guarantee their compensation.

Do you get calls from agents? I bet you get plenty of calls. Do many agents say they have a buyer who always wanted to buy only your home? Of course they do – this is how they set a foot into your house to pitch you that 6% full-service listing. I did it during my first year in real estate! Quite successfully, I should add.

The fact is, very few agents who do indeed have a potential buyer for your home would call you. Because, as I said before, if your home is not MLS-listed, it does not exist for them. You may be even offering them not 3% but 6% commission, so what? Who will know and how they will be sure about it? They have dozens of other properties to choose from. This market presents us all with constantly growing inventory of homes and constantly decreasing number of homebuyers – you do the math.

If you are a homeseller who offers a commission to a buyer’s agent, you MUST have your property listed on the MLS so the agents know you are selling and you are offering them compensation.