I’ve been following the hopes, dreams and frustrations of a FSBO (For Sale By Owner, pronounced “FIZ-bow) in one of my favorite blogs for months.
As a broker always eager to list a property for sale, I must admit a large part of me was hoping that “Kathy” would be unable to chronicle in BrickUnderground a successful sale process.
Not long after they were married, Kathy and Rob realized they needed a bigger place than their studio on Manhattan’s Upper West Side. Having pored over books, searched on the Internet and visited open houses, they had a good understanding of what would be required of them.
In March, they priced their apartment at $439,000, having calculated that they could save $26,340 by selling the place themselves, and listed the unit online. Their first open house happened to be Palm Sunday. Seven brokers and five prospective buyers showed up.
No one from their second open house, on Easter, made an offer, but a neighbor made a vague suggestion that the owners didn’t feel quite ready to push.
At a subsequent open house a couple who were sweaty from cycling plopped themselves on Kathy’s couch, and she couldn’t think of a nice way to ask them to get up. Then, a woman wanted to use the bathroom, which Kathy suddenly realized was stocked with expensive makeup and perfume. She ultimately offered one off the lobby, a suggestion that couldn’t have advanced the sale.
In early May, her two adjoining neighbors said they would buy the apartment together and divide it between them. Unfortunately, it turned out that the board didn’t want that to happen.
Then came another offer the following week, and negotiations began. But the offer went nowhere after the prospective buyer vanished.
All this time, mind you, Kathy and Rob are fending off brokers eager to list the place, scrubbing floors and buying flowers for their open houses, and trying to find a new home in Brooklyn.
Now, four months after the couple put their studio on the market, they have decided that it might be a good idea to offer buyers’ brokers a commission; in their case, the amount is 2.5 percent. Here’s what Kathy wrote:
We didn’t want to work with buyers’ brokers because…
- We wanted control of our listing and how our place is represented online, in print, in person, etc.
- We’re comfortable with the amount of work that comes with selling the apartment on our own and we would prefer not to pay a commission
- We’re confident about the value of the apartment and believe that it’s just a matter of time before we find our buyer
We decided to offer a commission to buyers’ brokers now because…
- The added exposure during a slower season (summer) would be helpful
- We’ve been on the market for three months and hosting open houses every weekend is exhausting
- We realized that working with buyers’ brokers can only help us at this point. And just because we’re offering a commission now doesn’t mean a broker will be the one to sell it
In a way, I guess I feel sorry for Kathy and Rob, and I’m going to confine myself to mentioning the biggest mistakes that I think they made. Unfortunately for them, they realized perhaps too late that real-estate sales involving no broker at all – on either side of the transaction – are few and far between.
The key from the outset would have been to offer a commission to brokers who bring in a buyer who is ready, willing and able to close. Moreover, the commission needs to be tempting enough to have brokers prefer showing the couple’s apartment to others (although I abhor brokers who make such a decision based on the fee).
It also is important for Kathy and Rob to have attuned themselves to the market as it has changed month to month and week to week.
The apartment may not have benefited from a marketing campaign carried out by a broker, but I don’t think I’m going far out on a limb to say that the market has spoken: The price is too high.
All that’s left is a stale listing in the middle of the summer and a lost opportunity to sell at a fair price in a decent amount of time. Too bad for these FSBOs.
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022