Homes For Sell By Owner – FSBOs and Buyer Brokers
You’re selling your home as a FSBO (For Sale By Owner) in Ottawa and you get annoyed when real estate brokers call you, right? That’s a reasonable response when you’re doing all the work to market your property to save thousands of dollars in broker commissions. However, when a “buyer broker” calls, you might want to listen.
To understand why I say that, we need to understand the functions of “listing brokers” and “buyer brokers.” Real estate brokers can and do serve both functions, though some specialize.
Some brokers who call you are interested in listing your home. They want to market your home for you. The amount of commission charged for this service varies, but where I live, most brokers list homes for a commission of 6 percent of the sales price. When the home sells, if another brokerage firm has brought the buyer to the deal, the listing broker pays the selling broker half or 3 percent.
When you’re successfully operating as For Sell By Owner, you’re getting folks to come and look at your house, or condo, or whatever, and you don’t need a listing agent. However, what if you’ve been doing this for a while and none of the lookers has been converted to a buyer? What then?
Well, if a broker calls you and says he or she is working with buyers and they’d like to be able to show your home, maybe you should consider it. They probably only expect about half the typical listing commission. That still allows you to save serious money. Perhaps you can even negotiate down a bit from half. This is especially true if your home is appropriately priced above the average price for a home in your area. In my area where 3 percent to a selling broker is frequently acceptable, I’ve seen brokers accept 2.5 or even 2 percent. It doesn’t hurt to ask.
As a bonus in that situation, you get someone who is knowledgeable about the process with an interest in getting the deal to settlement. True, they don’t represent you. They represent the buyer, but the buyer wants your home and the broker wants a payday. In short, the buyer broker has incentive to put an oar in when problems arise.
Don’t misunderstand me. I’m not for one second suggesting that you pay more than is necessary to sell your home. At first, take names and phone numbers of “buyer brokers” who call you. Then, if you find you need to, call back the ones who impressed you.
There is a middle ground between going For Sell By Owner and listing with a broker. If you find you need to, this middle ground can be worth exploring through buyer brokers.