Posted by John Merchant on May 19, 2007 at 10:49:25:
Thanks as I surely did not know that.
But every REA does have a RE Broker and that Broker has had to have some knowhow and experience to get his/her license, so should be consulted by his/her agents…and I’m always amazed by how often the REA never even thinks to talk to his REB!
Soliciting For Sale By Owners…Legal or Illegal - Posted by Heather Whittle
Posted by Heather Whittle on May 14, 2007 at 01:49:26:
I am new to the real estate profession and somewhat confused about the For Sale By Owner issue. I am a Realtor in NE MS. I read articles explaining “how to” approach FSBOs, but then I hear that it is illegal to solicit a FSBO. Which is correct? I spent a lot of time putting together FSBO packets containing an introduction letter, a brochure, business cards, selling tips, an offer for a CMA with a questionnaire and a self addressed envelope. I made these with the intentions of hand delivering them to the homes of the FSBOs. Legal or illegal? Ethical or unethical? Thanks
Agent needs to know his local law - Posted by John Merchant
Posted by John Merchant on May 18, 2007 at 10:49:37:
As a RE agent you should have learned your state’s RE laws and licensing regs to even get your license.
Ignorance of that law would be no excuse if you were the object of a complaint to your RE licensing agency.
Now, should be simple matter for you to go back and review those laws and regs pertaining to advertising and FSBO contact.
Further, since every working agent has to have a broker (and all business in his shop is owned by broker, not his agents), I suspect all you need to do is sit down with your broker and go over your advertising plans and get his/her advice and permission to execute your plan.
By the way, not legal or proper for you to say you’re a “Realtor” unless you’re a member of Realtors Association… because that’s a copyrighted term available only to its members and they’re rightly jealous of its use.
I’m thinking you’re not, because NAR has its own educational requirements and ethical standards (realtor must adhere to NAR ehical rules and standards which are quite high) and its members are normally quite knowledgeable on what they can/cannot do.
Re: Soliciting For Sale By Owners… - Posted by FSBO Seller
Posted by FSBO Seller on May 15, 2007 at 12:14:57:
I’m not sure on the legal side, but I’m not an attorney and I don’t play one on TV.
I don’t think it is unethical, you are simply advertising a service using direct mail and other similar advertising means. I would concur with Jimmy that trying to get FSBO listings will be difficult and success will come with those houses that have been on the market for some time. But you will also be competing with all the other realtors trying to get the same listings.
In order to get these types of listings, you need to show how your marketing plan is different from your competition and how it will produce the result of selling their house. They will be receiving lots of packets like yours as well as unsolicited phone calls. Your door to door approach will be less common, but you will need to learn to get past the pre-programmed “no thank you”.
Anybody can stick a sign in a yard, run a few ads, hold an open house and wait for the phone to ring, including the owner. FSBO owners are the type who say, "I can do that, " and then successfully do it and more. What service are you offering that they can’t do and aren’t already doing? FSBO service companies offer owners the opportunity to list on the MLS and decide whether to offer a buyer’s realtor commission in addition to other services that are cheaper than a realtor.
Some FSBO owners will pay a buyers realtor commission, others won’t. As Jimmy pointed out, there is opportunity by finding buyers for those who will.
Many FSBO owners do so either because of poor experiences like mine with mediocre members of the real estate profession or they do not see a realtor adding enough value to the transaction to justify the cost and therefore, don’t want to pay for it. Or both.
Without any prior experience, I sold my house in a week and had a list of potential buyers who wanted me to call if the deal fell through. My independent appraisal, advertising costs and attorney’s fees were significantly less than any commission rates offered to me at the time and I made a very nice profit on the sale. During this time, I had a plethora of phone messages, postcards and packets from realtors offering to list my house.
With the costly and lousy experiences I have had being represented by a realtor for other transactions, it would be a tough sell for any realtor to convince me to list my house with them or represent me during a purchase. Adding a middleman holds no value for me and I have had the experience of losing money due to realtor screw ups, yet they expected their full commission.
The reason I share this is to help you understand the mindset you will be dealing with for this particular market segment. It is very important to recognize that you will be fighting FSBO owner perceptions and/or experiences of realtors adding little or no value for the cost.
Bottom line: what do you bring to the table that makes it worthwhile in their eyes for them to pay you?
That said, Jimmy’s advice on building your reputation over time and good performance is right on.
Best of luck!
Not Sure - Posted by Jimmy
Posted by Jimmy on May 14, 2007 at 07:27:19:
not sure. would be a state-specific question. ask the broker with whom you hang your license.
don’t expect to be received warmly. people do FSBO’s on purpose. I never use realtors to sell properties. Realtors add no value to my deals. But see below, because I can make use of realtors in another way.
I predict the following:
you will have very little luck getting listings from these sellers, unless and until a property has been sitting on the market for 5-6 months. I would not bother a FSBO seller until several months have passed.
you could have plenty of success in another way. approach the seller and ask this question: “If I bring you a buyer, will you let me scrape off 3% for my efforts.”
Observation: I’m guessing you are fairly new to this biz. I say this because you are looking for an easy way to get listings. It doesn’t work like that. You earn you reputation first, and the listings will flow you way. You build your network of contacts, and that network pays dividends to you. It takes time and experience.
Re: Agent needs to know his local law - Posted by Natalie-VA
Posted by Natalie-VA on May 19, 2007 at 09:56:20:
John,
Just a clarification…NAR has zero education requirements. All you have to do is get a license and pay dues. They would like you to think there’s more to it, but there’s not.
–Natalie