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22 Feb Ep. 52 For Sale by Owner (FSBO)
In this episode, Realtor Adam Kruse and Realtor Shannon St. Pierre discuss why people decide to sell their home on their own (FSBO) instead of using a Realtor. Find out why For Sale By Owner sellers constantly get less money for their home than if they had used a Realtor.
Email questions to PODCAST@HermannLondon.com
WHAT’S INSIDE
1:11 What does FSBO (for sale by owner) mean?
1:38 Adam worked for a company that targeted FSBO’s to try and get them to list with him
2:23 How do you convert a FSBO to using an agent?
2:52 What are the 4 main reasons people try to sell their homes on their own?
4:21 Selling a home on your own needs to be approached with absolute caution
4:41 How much less do for sale by owner homes sell for compared to using an agent?
5:30 There is a time and a place for selling a home on your own
6:12 Shannon St. Pierre sold her home on her own before becoming an agent and has some regrets about it
7:23 Shannon did a ton of preparation before selling her home on her own which is more than what most people do
8:05 While learning about how to sell her home on her own she could have had the house on the market already if she used a Realtor
8:40 Why are FSBO prices often wrong?
10:05 Why are Zillow Zestimate prices always wrong?
10:54 Why do people sell their houses as-is? How can a Realtor still help out with an as-is sale?
12:04 What simple etiquette do For Sale By Owner sellers constantly forget about?
14:30 Why are seller lead tours a huge turn off for home buyers?
15:46 Why do For Sale By Owner sellers get mad when they don’t understand what contracts mean?
17:08 Why are some buyers agents sometimes scared of For Sale By Owner sellers?
20:03 What is an Authorization to Show form and how does it help clarify who is paying the commission?
24:25 For Sale By Owner sellers are not bound by a code of ethics like Realtors are
26:00 What is a marital waiver when it comes to selling a home and title companies?
27:10 What kind of marketing is a For Sale By Owner seller missing out on?
27:25 When Shannon did her own For Sale By Owner she paid someone to list her home on the MLS and scheduled an agent open house.
31:16 Why do For Sale By Owners panic when they actually receive an offer?
33:00 What does it mean to be a dual agent and what does it mean to take a neutral standpoint when representing both the buyer and the seller?
34:30 Why do For Sale By Owner sellers end up hiring someone in the end anyway?
37:50 How limited is a For Sale By Owner seller when it comes to marketing?
39:00 Why do For Sale By Owner sellers disclose so much information and how does it affect the sales price?
40:40 Contact Shannon St. Pierre at 314-583-0070 or email Shannon@LivingTowerGrove.com
41:00 Call the Hermann London offices at 314-802-0797
TRANSCRIPTION
Adam: live from the rooftop of the Herman London real estate group in beautiful downtown Maplewood it’s the st. Louis realtor podcast with your host Adam Kruse welcome welcome everybody to the st. Louis realtor podcast live from the rooftop of the Hermann London real estate group in beautiful downtown Maplewood Missouri I’m Adam Kruse broker owner of their Herman London real estate group and I’m here with my fabulous co-host
Shannon: hello
Adam: Shannon st. Pierre
Shannon: hi I am a real estate agent here at Herman London and I focus mainly on the city
Adam: yeah
Shannon: and I’d love doing these podcasts with you
Adam: and I love having you as my co-host my podcast you’re fabulous so today’s topic is all about FSBO and what is it FSBO
Shannon: for Sale By Owner
Adam: okay and so what does that mean what does that even mean
Shannon: so that means that the seller an owner of a home just attempts to sell their home on their own without an agent
Adam: okay and so I have a list of reasons why someone would do that
Shannon: okay
Adam: I don’t know if you know this about me but 10 I guess 11 years ago or so before I started Hermann London I worked at a company as a Realtor and our goal was targeting for sale by owners and we we were all focused on trying to work with list and sell for sale by owners homes so I have strong opinions
Shannon: so I do know that so you what you did is you targeted FSBO’s for sale by owners and to get them to list with an agent so you’re just like that was just your target
Adam: yeah I mean Realtors often choose a niche you know you said I like to sell in the city and I know you’re like the tower drove expert you know some realtors are focusing on foreclosures or investors or different types of business
Shannon: yes
Adam: and my time that my focus was working forth for sale by owners
Shannon: okay so I have questions about that
Adam: okay
Shannon: and so what would you tell them to try and convert them from a FSBO to using an agent
Adam: well all of the things we’re going to talk about today
Shannon: okay
Adam: but you know what was interesting to me is that there was a lot of different reasons why someone went for Sale By Owner
Shannon: okay
Adam: and so they’re not that’s why it was such a unique thing and you can be like a for sale by owner expert sort of but because they’re all different and to me there was I wrote down four reasons why someone would go for Sale By Owner
Shannon: okay so
Adam: reason number one I had a bad experience in the past with the realtor and I hate Realtors
Shannon: right
Adam: so I want to go for some builder
Shannon: do it on my own I can do no matter
Adam: I don’t need these dang Realtors right number two I know better so that’s kind of along those lines but it’s like hey I know what I’m doing I don’t need some realtor to tell me what to do you know I was a realtor 10 years ago or I’m gonna turn II or something like that like I’m just a smart person I sell things on my own all the time I don’t need a realtor
Shannon: I’m a salesperson
Adam: I’m a salesperson there you go I’m a master negotiator I don’t need a realtor because my house is gonna sell itself when I’m on a busy street and everyone’s already gonna see the home and so I don’t need the you know I don’t need the realtor to help give me exposure I can I can just
Shannon: throw a sign in the yard and people drive around looking for houses in my neighborhood anyway
Adam: yeah I’m gonna put it on on one of these websites online and you know it’s just gonna sell itself
Shannon: okay
Adam: number four is I want to save money I’m tired of these realtors are so expensive and I don’t wanna I can’t afford to hire a realtor I don’t have a ton of equity in my home and I want to save some money
Shannon: okay so all those four I think are valid concerns
Adam: sure in some ways
Shannon: yes yeah but I also think that being for sale by owner needs to be approached with absolute caution
Adam: well the you have some statistics there
Shannon: right
Adam: and I want would you mind sharing the one about the saving money you have statistics I think it’s up there about like the average price [???]
Shannon: yeah so the typical FSBO home sold for 200 thousand compared to two hundred and sixty five thousand five hundred for agent assisted home sales
Adam: so the person who says I’m not gonna hire a realtor because I want to save money I can’t afford a realtor what that statistic is purporting is that you’ll actually get more money if you use a realtor and that’s what we would try to say – right like yes if you use me yes not you’re gonna have to pay me but I’m also going to get you more money for your home
Shannon: I may pay for myself by bringing you in more money
Adam: yeah [???]
Shannon: you’re more right right
Adam: getting you more money and knowing when to negotiate kind of how we’re gonna sort of pay for ourselves right
Shannon: right
Adam: okay so I mean like you said there’s I guess there’s a time and a place for for sale by owners
Shannon: right so I don’t think this podcast is necessarily this complete bashing of for Sale By Owner FSBO or trying to get everyone to navigate away from it but I think that it is really important to look at it from all angles the disadvantages and the advantages of doing it on your own because I think that not everyone thinks through the entire process I think I’m in a really desirable neighborhood I could just take a sit a sign in the yard put it up on Zillow and I’ll just sell my home but there’s so much more involved in with it and as you know I before I became an agent and did a FSBO and I look back I didn’t at first I sold my first home on my own and I look back and think oh how naive I was really naive I don’t know that I made out better but I think it was a really naive way to approach it because it is but it’s not to say that we’re completely discouraging it I just think that there’s a lot to think through if you’re truly going to go this route
Adam: and one of like the promises or commitments I guess that we have to our listeners as part of this podcast is we don’t want to give kind of byres like a is sort of sales approach type of show right we actually want to give people both sides and all this all the information
Shannon: right the point of the podcast is to be an in for informative so they can make the best decisions for them and their families
Adam: so we’re gonna get into a little bit today talking about when you were for sale by owner right I do want to I do think it was interesting to for you to well you told me which is that you I think that you did a lot more kind of like work and preparation than the typical for Sale By Owner does you said you were reading books and about it and all sorts of stuff
Shannon: right so I think that that’s kind of one of those aspects of being FSBO is that you can’t approach it from a naive aspect and think of your just Thursday sign in the yard I read several books I tried to educate myself on the process even though I don’t think I could ever really truly once I got a contract I was really able to take it all the way up to getting a contract maybe but I think it kind of got a little murky from there but I did spend probably a couple months just trying to educate myself about the process where I could have easily had the house on the market
Adam: during that time
Shannon: and yeah so instead of putting it on and in winter I could have had it on in fall
Adam: so let’s go through some of the obstacles I made a list of obstacles these are things that I you know came across I guess in my time working specifically targeting for sale by owners but then it’s not like ten years ago like okay that’s my last for sale by owner I’ve dealt what’s for sale by owners a ton over the last ten eleven years or whatever still so
Shannon: right
Adam: okay so one of the things like you just mentioned in your statistic and that we’ve mentioned before on past podcast is that pricing is so important and I find that off the
Shannon: it’s essential
Adam: it’s essential and the pricing is often wrong not just for a for sale by owner but we deal with that with a seller who we come over to their house to list their home they’ve often kind of like made assumptions for what their home is worth based on like non facts I guess like here’s [???]
Shannon: me the guy down the street
Adam: yeah we have a lot of people who like build down the street told them what he’s selling his home for and he’s lying or whatever you know it’s not uncommon people are like well that home sell down the street sold for X and I’m like oh it’s the address let’s pull it up here oh no it actually didn’t it’s you know statistic number it sold for this
Shannon: so when we just go to talk to sellers about selling their house well someone saw this old the street and you know we’ll go back and we’ll look it up and like actually no that’s incorrect they sold for that just so you’re a little bit more informed to put in getting the price right is one of the biggest difficult tasks for there’s both sellers
Adam: and in most cases it’s probably too high but they don’t have the kind of the access to the data that we have you know they’re going on Zillow or something and looking at this estimate and they’re just using the wrong price from that
Shannon: right so Zillow does not so if an agent this is the one thing that drives me crazy about Zillow so if an agent doesn’t go in and actually input the sales price it is far from right that’s the same it missouri’s a non-disclosure state so it doesn’t automatically pull the sales records
Adam: but pricing sometimes could be too low I think we see that a lot you know we deal with wholesalers and stuff all the time you and I are both probably getting emails all day long from people who are trying to sell homes that they bought for from a for sale by owner for way too little because this for sale by owner didn’t have the information and now they’re trying to sell it to somebody else without doing any work
Shannon: right
Adam: so if that same for sale by owner would have called us and so a realtor instead of calling the person who mailed them the I buy houses for cash postcard
Shannon: yes
Adam: they ultimately would have ended up getting a lot more money
Shannon: even if you’re gonna do your sell your house as it so a lot of times people sell for cash or like the cash buyer those postcards or what are those companies but they the reason is that they just don’t want to deal with getting preparing a house for sale because if you’re gonna truly prepare a house for sale there is a lot of work involved but even if you’re going to sell your house as is you can typically still get more
Adam: get more because you then we can help you expose it to that many more investors
Shannon: yes
Adam: because just the one standing in front of you
Shannon: right so that guy that’s come in offering you a cash price it’s gonna turn around and try and sell it to an investor for ten fifteen thousand dollars more twenty thousand dollars more so that’s ten fifteen twenty plus on up we all know
Adam: you’re not getting
Shannon: that you are not getting as the for sale by owner that and that’s where that agent can pay for themselves and you still get more
Adam: there you go
Shannon: so you get more in your pocket and you get someone to help you navigate this this process a little better
Adam: so another reason why I think going for Sale By Owner can be tough is because I think a lot of times that for sale by owners don’t know what I’m calling like some of the simple etiquettes that your Realtor your listing agent would teach you for example you know when we’re as a buyer working with buyers and we’re showing homes and we go to five homes tonight or whatever four of them are vacant and we have a little home to ourselves where you feel comfortable we can talk we can say whatever we want we can walk around let me go look at that room again but then occasionally you get to the home and the sellers there you know whether it’s for sale by owner or sometimes the agent just doesn’t educate their seller either right and the sellers there and from my experience it’s awkward you know and so the for sale by owner might not know that it’s best if I’m not there when the buyer is coming to come and look at my home because it’s awkward
Shannon: right so for the FSBO you need to go buy a lockbox and so that the agent the buyer’s agent don’t show it can come and show it just like they would on a normal property that’s listed in the MLS
Adam: by a lockbox take a walk I mean you can if you want to it’s it’s still not ideal if you want to you can wait until the buyer gets there and then you can say almost nothing and leave and you know I’m gonna go walk the dog or whatever you know and just leave it’s still ideal that you’re not even there when they get there but you could still do that but what we see is they’re like oh I’m just gonna be here working or watching TV or whatever and the buyer just feels super uncomfortable
Shannon: it is uncomfortable I’m even uncomfortable as an agent walking through the cellar the haunt of the owner of the homes in and they like let’s just go ahead and take a look around and you’re like and they’re just kind of hanging out in the living room or the kitchen and you’re just like okay like and you just like it’s so uncomfortable to be in some stranger’s bedroom when they’re there
Adam: yeah
Shannon: all you do is you’re trying to just look at the rooms and get a feel for everything but you can’t do that in a normal scenario we would be doing that
Adam: yeah
Shannon: but if they’re there you feel very uncomfortable
Adam: then the realtor feels like we want to leave but is it rude to leave already we’ve only been here like yes you know
Shannon: and I am like yes [???] go ahead and tour this house
Adam: [???] even worse is where they walk around with you right and they want to give you the tour
Shannon: yes so that is a huge turnoff for buyers no matter what is seller led tours
Adam: yeah we had a this happened a lot but in most cases the buyer doesn’t want a new tour of them around and they don’t care that this was Timmy’s bedroom or they just don’t want to know all these details in fact no one wants to know all the details about you know whose office this used to be or whatever right
Shannon: right what all the repairs that you’ve made or exactly
Adam: yeah and so most likely the buyer is standing there thinking I want to leave I want to leave and the for sale by owner is standing there going oh and this is I did this and I did this and they don’t they’re not picking up on the cues of everyone being like it’s time to go like right you can look at their body language their feet are probably pointed towards the door but we’ve had for sale by owners be kind of rude to because they make people feel uncomfortable and they you know they’ll get insulted if the buyer doesn’t like the home you know this is their home they live there they put love into it and they get kind of insulted
Shannon: yes
Adam: and they can kind of act rude to the buyer and that’s never a good move either
Shannon: what else do you have
Adam: the for sale by owners in general that come across they don’t know what the normal processes are what the normal forms that we use are and what they say and what they mean and so they end up getting mad right so they’ll sign a contract and then you know a week later or whatever the buyer’s agent is calling them or emailing them asking hey have you got the municipal inspection yet you know can you send me over a copy of it and this for sale burner gets angry because they’re like I’m not doing that well what do you mean you’re not doing that check out paragraph 11 where you agreed to that exact thing you know I don’t know I didn’t mean to agree to that or whatever and and so there’s no one on their side advocating for them and to them telling them absolutely this is normal this is what happens this is the way the process works
Shannon: unless you’re selling as is then we need to request a special sales contract where you don’t have to do the minute
Adam: right the realtor would have had to tell them that right
Shannon: right so the so now the buyer’s agents just going hey we’re just gonna give them the regular contract
Adam: yeah
Shannon: and now they’ll have to do these things and the for sale by owner unfortunately just isn’t aware of this process
Adam: yeah so then because of these kind of weird experiences my next you know why the obstacles is that many buyers agents are scared of for sale by owners and I would say in many cases they’re wrongly scared of them
Shannon: the buyer’s agent
Adam: the buyers agents are scared and I don’t think they necessarily should be scared but but the buyer’s agent being uninformed to the buyer’s agent is the one who’s kind of like working with their buyer right and sort of has some input on the process if they’re scared of a for sale by owner they’re less likely to bring the client to the for sale by owner
Shannon: I don’t think buyer’s agency it scared the right word or is it just like exhausting because they now you have to educate both sides
Adam: well the we can use both words the reason I said the word scared is because I think a lot of buyers agents don’t know that most for sale by owners are willing to pay a buyer’s agents Commission for sale by owners generally are trying to avoid the cost of a listing agent
Shannon: right
Adam: but they’re in in most cases they’ll say I’m willing to pay a buyer’s agent
Shannon: okay
Adam: and so what I think a lot of buyers agents don’t know that and so they see for sale by owner and they think here comes an awkward situation or I’m gonna have to have an awkward conversation with my buyer about my commission and I don’t know this I’m assuming this guy’s not gonna pay a commission and so what do i do how do I handle this let’s just avoid it altogether you know
Shannon: right so in those scenarios where a what a my buyer says found say a for sale by owner online maybe through Zillow
Adam: yeah
Shannon: typically I think how they find it but they’ll call up and say hey can we see this house I think it’s for sale by owner absolutely I’m working for you so if this seems like and then I’ll go look it up on Zillow too because it’s not in the MLS and I’ll track down the buyer call them out I mean the seller yes pardon so I call up the seller and my first question is I have a buyer that’s interested in looking at your property do you or are you willing to pay a buyer’s agent I think for the most part like 99 percent of times yes they are and some are like no and I’m like okay like for one that buyer already hired me they want me through this process if you say no they’re not even going to come look at your house number one
Adam: or they’re gonna pay me directly and they’re just gonna want to pay you less for your home
Shannon: right so I’ve had that happen to where they have actually done a for sale by owner and I just acted more behind the scenes and the buyer did pay me and then I think it’s sometimes really difficult though it sometimes even get ahold of the seller so the sellers don’t call you back right oh don’t worry about you and we’re like well we’re kind of going out tonight or you know tomorrow afternoon and
Adam: there’s three works better for me
Shannon: yeah I’m like well I don’t really yes the whole scheduling thing is always been probably the biggest challenge
Adam: oh let me go back to something when we do call them for Sale By Owner Realtors should be asking the person by owner to sign a form called the authorization to show form
Shannon: right
Adam: and that form is kind of covering two things if you are for sale bond or you should expect this form because they form a I guess the the main point of the form is to disclose who the realtor is representing
Shannon: right
Adam: and they’re representing the buyer in this form discloses that so the seller the for sale by owner doesn’t have some perspective now that they have someone representing them because they don’t I’m representing a buyer in this form and
Shannon: so in the state of Missouri until they sign that or until that’s kind of dealt with is the agent representing both sides until there’s definition
Adam: I would say not
Shannon: okay
Adam: I just think that we as Realtors and being ethical we want to disclose to the owner essentially who were representing and that were not representing them
Shannon: right so the form does basically say that we are representing the buyer not you the seller
Adam: yeah
Shannon: and then it also states the Commission right
Adam: yeah so then they’re agreeing upfront to pay a buyer’s agents Commission
Shannon: which I already stated over the phone but now it’s just being done in writing that’s
Adam: you know it says this buyers name and it says you know if we close on the home and all that stuff there’s no tricks we’re not saying give us money today or whatever you know so I’m representing the buyer and if they buy this house you agree to pay me what is a fair commission
Shannon: yes and so there’s a great
Adam: yeah and so when I am working with a for sale by owner I send that form to them before the showings I like to make it easy on him and do DocuSign so they can sign it read it whatever and then we’re all on the same page
Shannon: right
Adam: but in my I guess my point of that was a lot of buyers agents haven’t had that experience and they don’t know how that’s all gonna go down and what form to use and all that stuff so there that’s why I said scared they just don’t
Shannon: okay yeah I mean and it is a simple process but now you need to get that for sale by owner to sign this document and the for sale by owner may be like well no I don’t want it
Adam: what a this form I don’t know
Shannon: I said to do that and well you can just email it to me and let me look / and so it becomes a quite complicated process when it’s so just what we’re just trying to follow the rules
Adam: so then other agents are scared because we’re scared what was the word you used exactly exhausted apprehensive whatever because they’ve had a bad experience with the Priscilla boner so I’ve had plenty of bad experiences with the Priscilla burner where the deals die like the thing I mentioned where the foresail burner goes I’m not doing a municipal inspection right okay but you did agree to it okay but I’m not gonna do it you know I’m gonna get my attorney whatever like okay please get someone to tell you what you’ve agreed to here and so you know you have these bad experiences over and over again and that causes you to not want to work with some for sale by owners now I’ve had plenty of great experiences too but you know you remember the bad ones I guess you know so agents don’t love working with for sale by owners because they end up doing both sides of the work
Shannon: they do so generally if we’re representing a buyer or I’d say I’m representing a buyer you’re representing a seller I’m handling my buyer and explaining things to them and checking on their stuff and their financials and their make sure they’re happy with the title work and all this kind of stuff right but you’re handling the seller and making sure they’re comfortable with everything and they’re doing what they need to do for inspections and they’re doing what they need to do to fix things and get in there home cleaned and get moving ready and all that kind of stuff and there’s one person helping them one person helping them and so that’s kind of what agents are used to but if you don’t exist and I’m dealing directly with the seller then now I’m doing both sides of the work you know
Shannon: right and it gets and then yeah and it does make it a very difficult process because you know trying to keep the sellers on track I mean your job as a buyer’s agent is to keep the buyers on track
Adam: yeah
Shannon: and to act in their best interest in the meanwhile you can’t sit here and tell the you know especially once I do inspect the buyers do their inspections and here’s a request for all these things that they want to have fixed and the seller isn’t sitting there going well what am I supposed to do with this
Adam: yeah
Shannon: i am like wow
Adam: you know here’s our offer well I don’t how do I even respond to this I’ll just tell you what my offer okay well there’s called the counteroffer form that we should be using in this case and then the sellers are not bound by the realtor code of ethics so the the realtors are generally going to be pointing out I forget the word we use but it’s like latent defects and the property right and some for sale by owners are not interested in being ethical or moral and they just want to sell their home and they might they might try to not give information
Shannon: right so they don’t have to this as a FSBO or any seller does not have to fill out what we call the disclosure form so it’s the form in which sellers fill out that just kind of goes through all the major aspects of a home and sellers fill that out to the best of their knowledge now a buyer’s agent is going to probably request one of those and it is once you start filling that out if you knowingly lie and a buyer is able to prove it you can you can be sued
Adam: very likely we’ll be sued
Shannon: yeah and that happens people do go to court
Adam: sure but beyond that you know there there’s situations where they don’t realize what else they’re going to have to disclose like I’m getting a divorce right no one they might not tell they don’t need to tell the realtor that like the buyer’s agent doesn’t need to know that but the title company needs to know that so that when the day of closing they show up and the title companies like where’s your wife and they’re like she’s not involved in this right and
Shannon: I I have had that
Adam: she needs to signing documents and they’re like oh shoot because she’s not she doesn’t even know I’m selling the home
Shannon: I have had that happen and the guy got really upset and said well why does this need to involve her eyes
Adam: this is my house that’s not really
Shannon: not really in the state of Missouri we are a marital state which means that property belongs to both doesn’t matter who it’s who it’s titled to it’s still so we had to do a marital waiver but
Adam: so that’s another
Shannon: very frustrating for the seller
Adam: he was frustrated but then it’s like now the now he’s like I’m not gonna sell then okay well what about the you know close to a grand or more that the buyer has spent on your home based on this like contract that you guys have you know so it gets it gets kind of nasty that’s what I’m talking about bad experiences but
Shannon: right
Adam: these are just some reason why buyers agents don’t necessarily want to work with a for sale boner well let’s talk about marketing so I would say that the first sale by owner is generally getting extremely less marketing exposure and you mentioned before that you’ve you when you went for sale by owner you paid someone to put your home on the MLS right
Shannon: so I did and when I was doing it FSBO I paid someone to do the list it on the MLS
Adam: did that person send out a professional photographer
Shannon: no
Adam: Did they give you Home Staging advice
Shannon: no
Adam: did they put you on a bunch of extra websites
Shannon: No
Adam: did they give you like professional flyers
Shannon: no no advice [???]
Adam: did they do open houses
Shannon: no
Adam: did they have good signage and directional signage for you
Shannon: none
Adam: did they give you social media presence and response to people and targeting and all these ads and stuff like that
Shannon: no but it was a while ago I don’t know that social media was as big then so in that defense that you know
Adam: did they put you in the newspaper though
Shannon: no
Adam: they didn’t okay so I mean we can talk about that a lot but it’s just a lot less marketing exposure the realtors are doing a lot of work I forgot some things did they call local agents in the area and tell about your home
Shannon: oh gosh no I mean it really was just let say it listed and then in the MLS but it was no agent advice there was no coming to my house and helping me navigate preparing my home for sale or even kind of what to do when someone calls and that’s interested putting a lockbox on the house it might have been a nice little suggestion
Adam: yeah did they use a super box which was able to track when anyone comes in and
Shannon: no
Adam: tell you when the doors open so you know kind of would know
Shannon: no there was no lockbox even provided
Adam: okay
Shannon: so that’s where I’m like that’s for sale by owners I think still have to provide their own lockbox
Adam: okay so
Shannon: [???]I left so I had some showings and so I did leave and I said I’ll leave the key on the back porch and here this is the location
Adam: and you’re just hoping that everything went well
Shannon: yeah
Adam: okay so let’s assume that somehow you get through all this right you
Shannon: so after all that reading of all those books now that I’m thinking about I’m like no one not wearing those books didn’t that say go get a lockbox
Adam: that’s interesting
Shannon: yeah so something so simple that made it something what should have been simple kind of more difficult
Adam: so let’s assume that that you kind of bump funnel through this right you have your own open houses right you are on a busy street so you do get a lot of calls
Shannon: to that point so in this book it really touted the whole you know so on Tuesdays is a big day that agents have open houses for other agents say hey say hey come look at this property I have listed for sale right so they really play this up in the in a couple of these books right so and they’re like and to get agents there
Adam: I have sandwiches
Shannon: have sandwiches have food right so I actually did that Tuesday did like an agent open house had like had him I guess put it in I can’t even verify that that MLS like listing it actually put it in the as an open house I just I guess I think a soon so I’m rushing around the house i’m totally was spot cleaning it i could have a cheese-and-cracker platter and some sandwiches and drinks and that like and I was thinking that all these ancients are gonna show up because that’s what it says in the book
Adam: did that
Shannon: not a one I mean crickets the whole time I was like oh my gosh not a one now as an agent now I’m like well duh
Adam: yeah
Shannon: that you can just put it in the MLS the reason we typically know about those agent open houses is because the agents themselves are emailing us saying hey let me buy you lunch come take a look at my house I had on listing
Adam: okay so all of this stuff happens and eventually somehow you miraculously get an offer right and the agent that represents the buyer sends you the offer well what
Shannon: well yeah so we did chat and I did call her and said would your clients think and she’s like well they think it’s priced too high I was like okay so what would they be willing what you know so we got to that point and then she was like well how are you gonna do this
Adam: yeah
Shannon: and am i I don’t know
Adam: so the agent sends you an offer and I from my experience it’s panic time because you think you know what you’re doing until someone emails you like 16 pages of legal documents
Shannon: yeah yes so they actual contract [???] 8 pages
Adam: the writers the disclosures like
Shannon: yeah
Adam: and other stuff
Shannon: that the contract the writers the contingencies and what the contingencies even mean I mean no and so she calls me and she’s like well now do you have someone an agent or a lawyer and like nope
Adam: so what’d you do
Shannon: I said will you do
Adam: it tell me what I am going to
Shannon: well then she first told me she goes well no first of all you’re paying the buyer’s agent way too much no one’s gonna come in and sell your house for that low and then so I think choose wine for the full three percent and so I was like like I think is what her rate was then I was like okay and then I said well you do the paperwork and she’s like well for an extra fee so we had to work that out
Adam: okay so that’s that’s what my experience was too is that they’re super confident and all these other aspects but then you get all these documents and it’s you just don’t know what to do it’s overwhelming and it’s scary like what am oh my gosh what am i agreeing to
Shannon: now I will say I look back on that because she did say well then that would make me a dual agent I have to go talk to my broker I’ll call you back and so she did call me back and says okay I had to get the buyers to agree to it and then she called me back and said okay big agree is the buyers agree to it well I look back now and I think through this situation how ours went and what that it was bad but she then had to take a neutral standpoint she couldn’t represent the buyers or me she just now was doing the paperwork and so now her clients who were entrusting her take them through this process she can no longer represent them because I put her in that position and and it wasn’t that she was I think trying to be greedy or do anything wrong I think she was just trying to help her buyers buy this house and help me get through the process so the buyers could buy through this house
Adam: yeah I don’t necessarily agree with how she approached it and the type of agency that she chose I think she could have still represented her buyer but still helped you with the paperwork personally but
Shannon: yeah so she we do agent and so she and then the buyers don’t have adequate representations because now she can’t help you both negotiate
Adam: yeah
Shannon: so it really puts
Adam: so in this case what a lot of for sale by owners end up doing is something they end up hiring someone right
Shannon: so hire an attorney you say that there’s someone named [???]
Adam: saving all this money by not paying a listing agent but are still paying a buyer’s agent but then they end up paying someone to help them with all this stuff anyway
Shannon: yes
Adam: they should because there’s a lot of [???]
Shannon: [???] doing anyway
Adam: right
Shannon: so we didn’t save it but so now I listed later in the year than I should’ve could’ve um you know like I didn’t really save money
Adam: because you were reading all the books
Shannon: yeah
Adam: okay
Shannon: I was trying to prepare it do it on my own like all these things that came into play I really do look back on it and I think you know go for it if you really think you can do this I can say from my perspective from my position it wasn’t a bad day the process was not horrible it wasn’t bad but I didn’t really it was a lot longer it was I had to really navigate something that I didn’t know I didn’t know about and I didn’t save
Adam: a lot of times I think that the the for sale by owner they’ve got a lot of grit man you got to give it to them right there I’m just trying as hard as they can but what they end up doing is kind of like I think they’re sort of assuming that everyone is against them right so they’re constantly fighting with the buyer’s agent about what they’re supposed to be doing they’re fighting with the title company about the things that they need and why do they need it and they’re fighting with the inspectors they’re just kind of like fighting with everyone because they don’t really know they don’t really know what’s right and what’s wrong and who do I trust and who do i not and who’s telling me the truth right so that I think that they end up having a really bad experience because they’re just they’re just fighting the whole time they don’t know who to trust
Shannon: yeah they’re going against the grain right and I mean like and this Emma Frost for for me to even say even say I wouldn’t advise it would be hypocritical I mean like I did it I’m not saying don’t do it I’m just saying learn from my mistakes
Adam: yeah yeah you’re
Shannon: as well
Adam: I don’t think you’ll do it but if you want to make
Shannon: take into consideration this entire conversation
Adam: yeah so if you want to make more money and you want to have a smooth process then you should use a realtor it you want to make
Shannon: home buying and selling it it’s a complicated process
Adam: okay so but end anyway I think it has some other statistics here a lot of times I think in most cases for sale by owners do end up listing with Realtors right because I know there’s a lot of realtors out there who do target the for sale by owners and so when you put your home for sale by owner on Zillow or sign in new yard or on Craigslist or whatever you’re getting calls from Realtors all the time you look at all these calls I’m getting these are not calls from Realtors wanting to show your house in most cases they’re realtors who are wanting to list your house right so now you’re having to kind of like deal with that right these realtors who are constantly calling you and they’re really good at these phone calls they take classes they’ve got scripts they practice right they do role play all this kind of stuff and they know how to handle every objection you’re gonna give them and so in most cases they end up listening with the realtor
Shannon: right but I think that the for sale by owners also end up listing with a realtor because it becomes a very complicated murky like process and people end up in over their heads yeah I mean ultimately like I did yeah I just somehow got through it
Adam: that’s all that’s all I have to say about for sale by owners anything else you want to share
Shannon: no I think that you know I think it’s a lot of work I mean there’s a lot of methods as far as marketing if you’re a FSBO how would you market your house to in today’s world I mean when I was doing it it was kind of it was different so how would you do it today don’t you feel like you’re limited because if you’re not doing the MLS thing just indicate to all these third-party sites I feel like it’s still very limited and the chances of finding your buyer are
Adam: well they’re a lot less and I’m gonna end up getting less money I mean I know that and yes I’m sure it’s frustrating for sale by owner who like if I could just get on this one website if I could just be on here or whatever but yeah you do have to hire a realtor to get on a lot of those websites
Shannon: right so the Association says that 49% when they I guess they did a survey of FSBO 49% didn’t know marketing I’m not sure so I’m not sure how you supposed to sell your house when it’s there’s no marketing
Adam: I don’t know if you’re thinking about being a for sale by owner then obviously we’re not we don’t think you’re the worst person in the world or anything like that I actually I’d love to talk to you about it and maybe do a pros and cons list with you and let us try to prove to you why we think our you know aspect is a good fit for you and you can decide if you think that’s a good fit for you or if you should just stay for sale by owner
Shannon: yeah and it does say like one of the the yard sign and open house seemed to be like the biggest way of the FSBO sell their house but I think I’ve gone to open houses with fist bows being before and they were they had an open house and they talked too much
Adam: yeah that’s the thing they’re following you around they’re talking too much
Shannon: I meant like disclosing probably more than they should about the holding their case they’re hurting their case they’re like giving buyers reasons not to buy it
Adam: that’s true so while I said earlier we don’t like it when the seller is like sort of cornering us and just over talking you know as a buyer’s agent I do sometimes like it when the other party whether it’s a for sale by owner or the listing agent gives too much information you know because a). we want the information and b). the more we know the kind of the better we can negotiate against you
Shannon: yeah so all your yeah so all they were doing was giving ammunition if if we were gonna make an off I did finding
Adam: their pain and their pressure points and all that
Shannon: yeah exactly I find that too with investment properties not that those are FSBO but you know when the renters are there and you’re trying to do inspections or you’re looking at the property they just spill the beans on everything that’s wrong and that the landlord hasn’t fixed I mean things that’s the way candid that it is just you know we just spill the beans too much you talk a lot just as human so because it’s an uncomfortable situation but well
Adam: how can somebody who’s listening or watching the show here get hold you
Shannon: so you can call or email phone number 314-583-0070 or my email is Shannon@LivingTowerGrove.com and how can they get a hold of us here at Hermann London
Adam: what we want is for people to call our office if they want 314-802-0797 but we really want to hear from PODCAST@HermannLondon.com and what we want to know is what questions you have what topics do you want what guests do you want us to interview and we just really like to hear from people if you’re liking the show if you liked any aspect of it we’d really appreciate it if you would go on wherever you got it iTunes or wherever YouTube and give us a positive review so that other people can know that it’s a great show
Shannon: yeah if it’s thanking us don’t worry about it
Adam: thank you very much for tuning in take care