For Sale By Owner in Sacramento -- Part 2

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Sacramento FSBO - Part 2 of 3

Co-operation with Brokers

"No problem!" you say. I don't need all those buyers and all those agents and all that marketing because I'll say I "cooperate with brokers" -- which is a code phrase meaning you plan to pay one "side" (i.e., 1/2) of the commission for bringing in the buyer. So you put an ad in the Gold Panner or the Sacramento Bee and your ad says "will cooperate with brokers". Surely that's just as good as having the whole MLS on your side, isn't it?

Well, let's see. First of all, you're no longer selling it yourself. Woops, there goes $12,000 of the money you were hoping to save. Well, no matter. Now you're saying you'll pay half that money in the hope of attracting those 17,611 hungry agents. Let's see how these agents view your FSBO and the rest of the market.

A Buyer's Agent Looks at Your FSBO

OK, let's see how a typical buyer's agent sees -- or rather, how she ignores -- your $400,000 FSBO. Jane P. Agent has a buyer, John Q. Buyer. John's looking for something in your neighborhood of Maple Street, around $375,000 to $425,000, so your little castle is perfect for him. Jane's getting ready to take John out touring homes on Tuesday. You're at work, so your home isn't open. Jane pulls up 15 listings in the MLS that might be a fit for John, rejects seven as either on the market too long, too high priced, or too low a commission.

Jane doesn't find your home here because it isn't listed. OK, no problem, let's say she saw your Gold Panner ad. Let's see how she mentally compares it to the eight she has from the MLS ready to show.

MLS Homes	FSBO Home
Risk: Paperwork to get Jane paid is already done (Listing Agreement).	Risk: Paperwork to get Jane paid (Single Party Listing Agreement) is not already done. Jane doesn't know for sure that you'll agree to it.
Exposure: Jane finds all the MLS listed properties automatically within about a minute of starting to search for them, because the MLS system lists them for her.	Exposure: Jane might remember that your ad was in the Gold Panner a week ago. Where was that paper again? Oh well, maybe she threw it out.
Reward: Amount of commission Jane will be paid is known and already negotiated for her in advance. Average runs about 2.85%, because Jane has screened for the good ones.	Reward: Amount of commission Jane will be paid is unknown. Jane thinks, "Hmm...this person is a FSBO, maybe I can get 2 or 2.5% at most, since obviously they don't like spending money on services."
Difficulty: Jane knows that another Realtor® will be representing the seller and doing their paperwork, taking that half of the liability, etc.	Difficulty: Jane knows that for the smaller commission that she might get, she'll have to represent both the buyer and the seller. Dual agency creates an increased potential liability for her, and representing you both means twice as much paperwork, but the money she'll receive is less than it is in the case of the MLS listings.
Price of Home: Jane knows that the seller had professional help in arriving at a price. Also, Jane was able to spot check price while looking it up by checking listing details and comparable sales.	Price of Home: The home was priced by the owner. Jane can't easily check details on it, but guesses that it's overpriced, since the most likely scenario is that owner has priced it too high.

NEXT: Jane and her buyer tour, but another buyer drops by.

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