“FSBO Farming”- Common Realtor Tactics
It’s a common practice for realtors to contact FSBO sellers in an attempt to get them to abandon their FSBO project and list the home with the agent, often referred to as “FSBO farming.” As a FSBO seller in a heavily advertised venue, you can expect to hear from a realtor or two while you house is listed with FSBOMetroDenver.com. This is in spite of the fact that the “terms-of-use” of FSBOMetroDenver.com, which all visitors are bound by, explicitly prohibits the unwanted solicitation of our sellers for commercial purposes. If contacted by a realtor, you may explain this and be done with it if you wish. If not, this page is designed to prepare you for agent calls so they do not come as a surprise.
If one takes a few minutes to look through any website with information geared towards realtors, it becomes clear that a lot of thought has been put into convincing FSBO sellers to pay the large commissions that all FSBO sellers wish to expressly avoid. It is easy to find scripts written for agents to study before contacting FSBO sellers that instruct them what to say, sometimes word-for-word. We have found a few of these and wish to pass the information on to our sellers to give them the advantage over the visiting realtor. Here is what we found:
From Realtor.org (the homepage of the National Association of Realtors):
“Sellers make more money when they use a real estate professional. The median price of FSBO sales in 2004 was $163,000 compared with $189,000 for agent-assisted sales.”
This is the most popular point to bring up. However, these statistics may show nothing other than sellers included in this statistic who chose to use real estate agents had slightly higher-value homes to begin with when compared to those owned by FSBO sellers. Is this a misinterpretation of statistics in order to mislead FSBO sellers?
“The vast majority of home sellers in today’s market rely on (a realtor) to assist them when they sell their home...”
This one is confusing. Since FSBO sellers are already in the minority, why would they be compelled to list their homes with a realtor just because they are told ‘everyone else is doing it’? Those who choose to sell their homes as For Sale by Owner have already shown that they can think for themselves so why would this ‘argument’ (in the loosest sense of the word) mean anything to them.
Furthermore, it goes on to state that in both 2003 and 2004, 14 percent of home sales were FSBO. That means roughly 1 in 7 homes were successfully sold by their owners. This is actually impressive, and contrary to how agents view it.
“Since FSBOs don’t use (a realtor), they have to do their own marketing to attract potential buyers.”
To an extent, this is true. It is also one of the core ideas that FSBOMetroDenver.com was designed around. As we say throughout our website- “At FSBOMetroDenver.com, we provide a solution to the most significant challenge that FSBO sellers face: how to get the exposure they need to sell their homes quickly.” We advertise extensively to ensure maximum exposure for our listings. Please read our FSBO Exposure page which details exactly how far we go to accomplish this.
It is also worth pointing out that realtor “marketing” consists of little more than placing a few newspaper ads, putting the home on the MLS and maybe (eventually) finding a buyer from another realtor. It is also worth mentioning that rarely, if ever, will a realtor be marketing only your home. Usually they have several to attend to and will place their priority on whichever they think will sell the fastest.
“(Realtors) are experts in marketing who can sell a home for more money in less time.”
Disregarding the fact that the above statement is pure hype and devoid of any real facts, the operative word is “can”. If you haven’t already, please read about The lack of incentive for an agent to get the best price for your home in the About Us/Why FSBO? page.
Furthermore, one of the big advantages to selling your home yourself is that you are free to choose the perfect balance between getting top dollar and selling as quickly as possible, as the two almost never go together, regardless of who is doing the selling. When the home is listed with an agent, the agent will influence this choice. If the agent wants a quick sale, you may be advised (convinced) to take less than you think you should- it’s an easy trap to fall into.
The “complexity of the transaction process” is also frequently cited as a cause for the ‘necessity’ of a realtor.
Using this to convince FSBO sellers to list is essentially a scare tactic. It’s an effective one, but don’t fall for it! While the “transaction process” of buying or selling a home is complicated in comparison to that of buying or selling a car, it is by no means too complicated for any homeowner or prospective buyer to complete. In a recent New York Times article (please see our Seller FAQ for instructions on where to find it) titled, “Owners’ Web Gives Realtors Run for Money” (NY Times, Jan. 3rd, 2006) Wisconsin Department of Regulation and Licensing attorney William A. Black is quoted as stating that, “The majority of residential transactions are very simple: 99 percent can be done without a broker. And the 1 percent screwed up – the broker couldn’t have prevented it.” The Times also paraphrases him as saying “...he does not think consumers who bypass real estate agents are missing much.”
It is possible for a buyers or sellers to complete the transaction completely on their own by printing off the necessary legal documents and filling them out. However, we recommend hiring an attorney for this step if you aren’t familiar with legal issues. It should only cost about $600 to do this. Buyers or sellers may contact one of our Partner Law Firms, for more information.
PlanetRealtor.com- “Break Through 5 FSBO Objections” from FL Realtor Magazine:
The five major “objections” mentioned in this article were already covered above (they’re pretty much all the same wherever you go), but there are a few small things worth pointing out.
One realtor suggests helping FSBO sellers by doing (fairly meaningless) favors to ensure the sellers come to realtors first. He suggests that a realtor should “Spoon-feed them [fsbo sellers] the information slowly,” helping out “all in the name of being in front of the owners when they’re ready to list.” So, if you encounter a strangely helpful agent, be aware that this tactic may be being employed.
Another realtor uses an ‘analogy’ that he claims to “make FSBOs pay attention: ‘If you needed surgery...would you do it yourself or go to a doctor?’” This is so absurd that it really isn’t even worth replying to, but here it is anyway: To become a surgeon one must complete 4 years of undergraduate school, 4 years of medical school, and 5-7+ years of residency. Passing scores on rigorous examinations are required every step of the way. The learning that is required of a real estate agent is measured in hours rather than years, and any analogy between surgeons and real estate agents is spurious.
One realtor boasts: “I often beat out other agents who focus too much on customer service (such as the marketing, follow-up and feedback) and not enough on the services that [the other agents] provide.” So, apparently it is more important to show a FSBO seller that a realtor will have a sign-in sheet for visitors at the open house (mentioned earlier in the article) rather than market the property extensively. Of course, half the purpose of the sign-in sheet, as the realtor’s web site explains, is to supply the realtor with names of people to contact in order to sell the realtor’s other properties. Fortunately, that is just one realtor’s opinion but be aware that realtors may try to woo FSBO sellers with the minutia of selling a home rather than what really matters, such as marketing the home, in the case of this particular agent.
After spending a short while on a few for-agents websites, it is hard not to notice a trend in the articles and the authors’ opinions. The prevailing sentiment seems to be that homeowners are incompetent and the task of the realtor is Herculean and well beyond the capabilities of the average mortal.
However, the truth is that the choice to buy or sell FSBO is becoming more and more attractive and feasible every year, as the resources for fsbo buyers and sellers increase dramatically. FSBO is the way of the future.
