Traditional FSBO does not work

TANSTAAFL -- There is no such thing as a free lunch. If you want to skip using a broker, that's fine, but you can't skip the traditional broker duties of marketing your property and picking up the phone. (Unless you want to price it cheaply and sell it to the first caller, but then arguably you're cheating yourself out of the higher price you would get with greater exposure.)

The owners that have done FSBOs who have commented on this board seem to have had the most success when they priced realistically; could argue the merits of their apartment versus comparative apartments (above and beyond "well, I spent $8K on a Sub-Zero refrigerator"), and had professional photographs taken. In addition, many of the successful ones seemed to have created property websites and circulated those links widely (through their social media or whatever other channels were available to them.) As far as my last client who bought a FSBO, we found the property on nytimes.com .

If you're in a co-op, you'll also need to do tenant screening. There's been a recent thread about a board turndown in a FSBO situation -- and it's always tough to second-guess these things, but it's possible that could have been avoided with an experienced broker at the helm.

Speaking of which, if you have to field fifty phone calls from brokers and that yields one from Vickey Barron, you're actually doing pretty well. I've never done a deal with her, but as a teacher at REBNY, she's great.

ali r.
{downtown broker}

Well, we sold a co-op apartment in Manhattan, a house on Long Island, and just bought another house out west, all without our own broker. I would never use a broker for myself (can't stop the other side from doing so).

We saved many tens of thousands of dollars altogether. For the co-op, the other party didn't have a broker, either. For the house out west, we hired a lawyer instead, (in that state most people don't use lawyers) and we were SO glad we hired a lawyer and not a broker. Doing so also saved us, on that deal alone, 1% in commission, because the listing broker only charged 5% instead of 6%, because there was only one broker on the deal. Remember, buyers are the only ones with money in the transaction, and they write the check to the brokerage firm.

Regarding our co-op sale: Yes we had a turn-down of our first buyer. Their financials were sterling. They had a criminal complaint against them in another state that was dismissed, but it was for animal cruelty. I have never heard of a broker doing deep research on otherwise nice, affluent co-op buyers, and of course they lied on their application. I found out the whole story using deep background checking, but unfortunately, too late in the game. This kind of thing is rare.

Bottom line is, if you have business savvy and are willing to learn, you too can save many tens of thousands of dollars. If you hate to negotiate, you're scared, or you're too busy, then FSBO might not work for you. A flat fee broker is necessary in some markets to get your listing where it needs to be, and to prevent anti-FSBO discrimination by agents. You can negotiate with that flat-fee broker, too. We loved: http://www.ilistproperties.com/faqs/

Great article, I did in fact see it in the print version. However, to answer your own question, did you see this part of the article closer to the bottom?

"There’s at least one company trying to lessen the broker and FSBO tension. Hauseit is a website that offers an “agent-managed FSBO” service in which sellers pay a flat fee of $399 to list their apartment on the MLS and RLS database. The owner then handles open houses, questions and negotiations. Hauseit spokesperson Chris Oliver said one of the biggest reasons FSBO listings fail is “broker harassment”—brokers who are pressuring FSBO sellers to cave, or buyer’s brokers who ignore FSBO listings. Through Hauseit, the listing appears online in a way brokers won’t be able to identify as FSBO."

I would highly recommend these guys if you want more established, institutional approach to saving commissions. Plus, you'll avoid solicitation, harassment and boycotting from other brokers because Hauseit affiliates are traditional full-service brokerages and full REBNY Member Firms who don't openly discount and have their reputations intact (reputation is everything in real estate)! Good luck!

As the former real estate attorney, and Founder of RealDirect, I agree that the FSBO model has issues. That is exactly why we started RealDirect 6 years ago. Our Owner Managed program gives you all of the exposure (and more) of a traditional brokerage (broker databases, SE, Zillow, Trulia, NYT) as well as highly experienced brokers on the RealDirect team guiding you through every aspect of your transaction. And one of the very pleasant benefits of this program is you will not be contacted by agents looking to represent you. Since we are Licensed Brokers and REBNY members, agents are prohibited from soliciting you if you are working with us. We have done hundreds of deals, and there is no other company that is more active in this space. And for readers of this post, we will extend three months for price of one pricing.

Doug Perlson
www.realdirect.com

Kamby, I'm a subscriber to the Observer and did see that article. It's still on my coffee table! I'm glad folks are shedding light on the difficulty FSBO sellers have with harassment. Traditional flat fee MLS or FSBO just hasn't worked due to the harassment whether it's technically allowed by trade association rules or not. Great to hear innovative companies like Hauseit are doing something about it.

An interesting thing to note is how quickly after this article came out that the sellers gave the listing to Halstead to market: http://streeteasy.com/building/222-park-avenue-south-new_york/9d

Hey, they waited almost a month.

And they raised the price $300,000. If it wasn't for the huge commission they wouldn't have been forced to do that.

Not cheap at 1800k per stated sq feet for a coop and needs reno/reconfiguration!!

They raised it that much BEFORE giving it to the brokers. And the steep hike doesn't account for the commission even if it was Halstead that did the hike. It's 5% on this unit which comes to around $110k, not 300k.

Sarcasm is often lost on the internet.

I can tell by my Twitter feed.