FSBO May Not Be Way To Go
So Kristiana Heap at People says they finally decided to list “Tara” with an agent. The owners of this gorgeous hunk of a house thought the location was prominent enough to forgo an agent and all that marketing. I heard the other day about a home in Lakewood that has been on the market since last summer, and a less desireable property down the street sold faster because it was listed with an agent. Question: does MLS include FSBO time with all its information? If not, I think that’s a good question.
8 Comments to “FSBO May Not Be Way To Go”
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MLS only lists the days on market as the days that it is on the market in MLS. So even if an agent lists a property but doesn’t put it into MLS right away, the days on the market don’t count until it actually goes into the MLS.
If a property changes agents, the cumulative days on market appear. So it could be listed 180 days with Agent A, go off the market for a week and then listed 60 days with Agent B. The total days on market would appear as 240 days.
If the propery is taken off the market for at least 30 days, then the calendar starts over with day 1.
MLS does NOT include the days on market from when the listing was a FSBO. There is no data base that would be able to support that time.
Lydia is correct about the amount of days off the market for the ticker to start again. However, agents can still get the cumulative days on market through our archives feature.
The consumer that is going to buy a home like this (and their agent) will most likely know it’s been FSBO for a while thus making it a stale listing even before it goes into the MLS. Sellers underestimate a buyer’s market knowledge. And - thanks to your blog -the savvy consumer and agent will remember they were asking $2.25 million 1 month ago. Commission at 6% is $90K. What’s the $245,000 price increase for? Maybe they replaced the carpet? My prediction, %1.9 to $2 million sales price…or below. Every investor and top agent in this area knows about this house and they were unwilling to spend $2.25 million. So the market has already told this seller they are priced too high. Just my two cents. But I’m a Realtor so what do I know?
Leslie @ January 31st, 2008 at 1:57 pm
Jeff,
As part owner of the house on Beverly I have to say that you appear to not know what you are speaking of. It was far from a stale listing. After having the house on the market FSBO for 2 months we had over 700 calls and 3 contracts for full price. Apparently those who submitted contracts didn’t have the funds. The only thing keeping all realtors, like yourself, away was the fear of having to tell your potential clients that they would have to pay your commission. And, to top that off, many said we could get more than what we were asking. As the only owners of the property for 53 years and 4th generation “parkies” I think we know the value of this prestigious property. Do your homework, it appears you haven’t been in real estate for too long….
This is what I LOVE about blogs — it’s a huge panel discussion where everyone can pipe in with their story. Thanks for participating. Keep us posted on the home’s progress — it is gorgeous and if I win the lotto, I’ll pay cash!
(PS: Alas, the funding is the part of the equation we are all stumbling on.)
Jeff…this market just spoke. Did you hear it?
Jeff, You might want to get your calculator out and refigure the 6%!!
Having been a friend of this family for all of my life, I feel compelled to
speak out on their behalf, especially in light of the uninformed and erroneous
comments made here by Jeff Duffey.
The sellers have had a master plan for the sale of this property from the
beginning that was developed with the help of their team of experts. They
have the best law firm, the best investment advisors, and the best accountants
in Dallas on their side, and now they also have the best real estate firm and
team behind them also. They did not underestimate anything. The entire
family was raised by an entrepreneur who had extensive real estate holdings
back three generations, as well as 23 corporations. They know far more about
real estate and its valuation than any real estate agent will ever know.
Real estate agents are just commissioned sales people, they are not experts
in real estate investing, except in very rare instances. Some are excellent
at what they do, which is to sell property, but they know nothing of the
intricate world of residential and commercial property investing, as this
family does.
Their plan was to FSBO the house for a few months to get a feel for the
depth of interest and hopefully sell it to a teardown builder, or to the
builder’s customer without having to pay the ridiculously high commissions
that agents get on expensive homes, just because they are based on the selling
price of the property. I feel that the commission structure should be reduced in
percentage as the sales price goes up. If an agent sold a $15,000,000 home
he makes a $900,000 commission at 6 percent. Has he really earned it? Has
he really done any more work than the agent who sold a $150,000 house and
made $9000 for his 6 percent? Sure, he worked a little harder, spent more
advertising money, etc. But was all his work really worth $891,000 more than
the other agent? I hardly think so.
Then Plan B was to list with an agent after the first of this year, 2008, if the
house didn’t sell as a FSBO, and raise the price to cover all commissions. They
had offers of reduced commissions from several firms that were very anxious
to list this “stale listing”. The family was able to pick and choose from many offers
and they chose the best, as they always do. There was no carpet replacement,
as Mr. Duffey suggested (jokingly, I hope). The house is being sold “AS-IS, Where Is”
and there is no intention of spending one dime to improve it in any way. It is
a “Tear-down” or a complete gutted “Redo” if anyone has the money, time and
courage to attempt it. The price was not arbitrarily raised. It reflects the
advice of real estate agents who felt it was underpriced as a FSBO, and also
from other factors such as comps in HP and other proprietary factors.
There is no such thing as a “stale listing” when you have the ultimate premier
property in all the world (pardon the exaggeration to make a point). To use
many real estate agents own words, the most important factor is LOCATION,
LOCATION, LOCATION, and they have it. Beverly Drive and Preston Road
is jokingly referred to by “Parkies” as The Crossroads of the World. And it
is, if you grew up under the Bubble. This property will sell to someone with
a big ego who just HAS to live across the street from the Dallas Country
Club, within walking distance of the Highland Park Village, and wants to have good
neighbors such as Sam Wyly, Ed Cox (right across the street), Charles Pistor,
Jerry Jones, Carl Thorne, Doc Swalwell, Billie Leigh Rippe, Dr. Harvey Carter,
Mr. Muse, (need I go on?).
In conclusion, the family expects to sell to an ultimate user of the property, not
a “top agent” or “investor”, so it just doesn’t matter what they think of the price
or any other factor. And I do agree with Mr. Duffey on the fact that his opinion
is only worth two cents, and that he is just “a realtor, so what does he know”.
Maybe he should go back to sacking groceries at Safeway.