So I got an idea!! Lets offer ONLY a commission to the buyer agents! They are the imp
ortant ones right? They bring the buyer right? On to the second main options for FSBOs.
- Option #3: Just pay the Buyer Agent! Cut out the Listing Agent! Save $10,000
Quasi FSBO "Flat Fee MLS" for $200-400 (let me know if you want a reference. 
And yes for full disclosure I will get a $100 cut from them, hell I just lost a $10,000 commission after writing this 3 hour blog. Wait! Maybe if sign 100 people up, I'll make up for the $10k! Oh wait, that means I'd have lost $100k, and therefore would have to refer 1000 sellers to make up for it... oh wait... MS Excel circular reference error.)
If you are going to offer money to a buyer agent, you’d be a fool to not spend another $200-400 to get your house on the MLS via a “Flat fee MLS” service. This service’s main goal is to get you on the MLS for a flat fee, regardless of whether you sell it or not. Meanwhile a commission is published for the buyer agent and you get on the MLS and you get the exposure! Therefore wiping out 2 of the 3 hurdles 
above!
Ok, so maybe just pay the buyer agent! They have the buyers right? They are the only ones that really add value, right? Oh and don't let the listing agent fool you with their Realtor Trick; ads that say: "I have buyers, let me list your house." That makes NO sense! If you have buyers, you are the buyer agent (the important one right?), so bring your buyer, why should you also get a listing fee?
So how much do you offer the buyer agent (it must be disclosed up front)? Do you go with the local standard rate (In Virginia it is 3%), or heck, that is a rip off! Why not just pay 2%?
Well I’ll go on record saying you are an idiot if you don’t offer what is the norm in the area. I don’t care if it is bidding war season and you can sell your house in 3 days. You will get MORE with a larger audience of buyers. I know it might initially seem like a rip off, and agent compensation is an entirely separate 3 page blog, but the average Realtor in the US makes $17,000 according to NAR (I can’t imagine they would want to make themselves look THIS bad, so it has to be true.
I know from your perspective, heck you could give them $5,000 or 1% of your $500,000 and all you saw them do is walk in with a client for 30 minutes. That is $10,000 an hour. Well I wish. You miss the 20 homes that Realtor was schlepping the client around to previously, or the broker fee which is as much as 55% (45% to the agent) and another 25-50% taken out for referral fees or mentoring fees. I saw one agent’s $10,000 commission literally result in a $2,200 check to her. I know that it isn't your fault and you shouldn’t have to pay for the 19 homes they saw previously, but bottom line is your neighbors are all giving X, and if you give X divided by 2, you will disincentivize Realtors (I love these homes for my clients since I know nobody goes into them, we can get a better deal!! Hooray for idiots! Idiots= good deal, scratch that “better deal” see no good deals blog)
Ok so now you have mastered the above hurdles and you are all set with taking the flat fee option and paying $400 plus 3% to the buyer. I know the alluring $20,000 “savings” will now be cut down to $10,000, but heck that can buy you a nice 2 week vacation in St Thomas (insert vacation photo) and you might get much more traffic that will exceed the $10,000 that you saved and therefore NET you more.
Remember the goal is to get the highest NET.
So Frank, you are saying that Listing Agents are worthless, so just cut them out with Flat Fee MLS services?
Yes, exactly.
Well, not really. Actually "no." I just wanted to say yes to throw you and speed readers off (I read slowly, so I have to mess with you skimmers and fast readers, leave the good stuff for the detail oriented).
Here are some problems with flat fee MLS
Realtors hate FSBOs. Quasi-FSBOs that are on the MLS aren’t AS bad as regular home depot FSBOs, but they tend to be a major pain. Why?
In part because they tend to not understand the process.
Now you can be the best FSBO and sharpest “getting it” person out there, but the problem is the buyer agent doesn’t know that. Instead they get a pit in their stomach and subconsciously and they hope the buyers don’t like your house.
True story: I was showing a client 5 homes in one community. One was a Quasi-FSBO. Initially I had no problem with it. But then the hassle began. The MLS remarks said to call first. There were 3 numbers. I called all 3. No answer and no messages about the house being available to see. And then there was a car in the driveway, so do I go in or wait? Then the lockbox was old and jammed. So before I get into the house where I wonder if I am going to walk in on somebody in the shower, I was already praying that my buyers wouldn’t like the place. I thought to myself that this seller doesn’t “get it” and will be 10x the pain in the neck of a properly listed house with a listing agent. Sure enough the buyers also got frustrated before going inside and they didn’t like it. Oh and it was overpriced too, go figure!
So Mr. FSBO, you might be brilliant and savvy, but all those other idiots out there ruined your good name.
With no listing agent, the buyer agent does twice the work for the same pay. Given two identical homes at the same price, most agents will prefer to work with a listing agent.
I know you think all we do is push papers, but the job is about twice as hard without a middle man in the process. And not to mention, our liability triples. FSBOs who don’t get the process are more likely to sue and continue the headaches.
The buyer agent and the buyers will see that it is a Quasi FSBO and again (see above) the BUYER attempts to save the 3%. If I see a Quasi FSBO, the first thing that goes through my head is “this seller has already done the math and is thinking “if I get at least 97%, then I effectively have gotten full list since I saved by not getting a listing agent.” So my (and many agent’s) new baseline will be 3% lower and THEN the price drops (lower offers) start lower from that adjusted lower price.
My mother did flat fee MLS and Quasi FSBO and I saw the effects first hand. And she WAS one of those pain in the neck sellers that give all FSBOs a bad name!
Getting the highest NET is still out agreed #1 goal right? OK bearare with me.
The best way to sell a home is to put your BEST effort forward all at once. Ever heard the expression, “You only have one chance to give a first impression?” well that applies to house selling as well. If all of your marketing and staging and amazing photos all hit at once, then you can get the 2-4 buyers interested at once and that is what gets you top dollar. If you half ass it with those techniques above because you wanted to “lets just see what happens” you become a stale listing. The magic is dead. (this is more about doing the Flat Fee MLS and less about the yard sign, since virtually nobody sees that anyway)
Ok, so what now???
I guess you could find a great discount agent. Nothing is wrong with that! Hell, read my blog on rebating. I was the rebate and discount king… until I got good…
True Story: An old friend that I hadn’t seen in 8 years told me he was about to use a Flat Fee service. He was a doctor. He was very smart. Smart is good. I felt so bad for him, that I said I wouldn’t let him do it, and since I had free time and was fairly new, I offered to put his house on the MLS for free and offer him “full service.” The reason I didn’t charge was I wanted to use this as a test case (so years later I could write about it) and that was the ONLY way that he could 100% believe that I was doing it for HIM and not to make money.
We looked over that price he planned to list for, and we decided to list $10,000 higher. I brought in an interior designer (actually my mom, she was great, but my professional stager takes it to another light years higher level). I took amazing photos that made this TINY place look gorgeous! This was during the bidding war days. We ended up getting 8 offers! After 10 hours straight, just dealing with these offers, I was able to get the highest bid up to $495,000. They told me they would have taken $430k on day one if it was offered. They offered to pay me after the fact, but I turned it down. They walked with $65,000 higher because they got an agent. Now this isn’t NAR’s 25% numbers (see above), but it isn’t bad!
And no I don’t do free deals any more, I’m too busy. But I don’t think it is a bad idea for a new agent to get one under his/her belt. Again, I know I can get the client more, but if a new agent can find a FSBO that thinks agents are worthless, why not?
Ok so now what? Maybe you would be willing to net a little more by adding a discount listing agent to the dough mix. That way the house a) gets maximum MLS exposure and b) you don’t scare off the buyer agents! It might cost a little more (1 or 2% more), but our goal is to get the highest NET possible.
Agreed. But not all discounted agents are created equal (see rebate buyer discount blog). You might get a great one, but if he was so great, wouldn’t he want to try to charge more in order to outpace the $17,000 average annual salary of a Realtor? One great line I heard once was “If they can’t negotiate their commissions well, how good will they be at negotiating and maintaining the list price?” I normally hate all “big company” pitches, but I like that one.
Ok, maybe the agent makes up for the lower commission on volume? Um, ok, sounds great, but when they are faced with a possible 2 week negotiation, is that agent going to take the extra time to fight to get you that last $10,000 for the client? They sure as hell don’t do it for the $100 or $200 extra commission.
Ok, so what about a “full service” non discounted agent? Is that the best route?
Oftentimes NO!! Sorry, but even many of those agents suck (see blog). And what I love is when a brand spanking new agent goes after a $500,000 listing and tries to get a “full” (as they call it), commission.
REALTOR TRICK: One of the “big three” company training procedures is for the new agent to walk into the listing with the listing agreement pre-filled in with a 7%. They then dramatically slash the price and put 6%, as if you are getting a deal. What horse sh*t.
So how do you get the highest NET possible?
This exact question was raised to me by my best friend in Chicago. I couldn’t sell his house since I’m in Virginia. He called me saying how he needed the highest net for XYZ student loan reasons (EVERYONE has a sob story and NEEDS the money). He knew that I was the cheapest and non-rule abiding person that he knew. And as a Realtor, I would tell him how to “save” and do it himself.
I told him NOT to go FSBO for the reasons above. I then had to find him a great agent. I had him send me a couple of names of Realtors that he knew, so I could check them out. One I couldn’t find online, forget him. Another was a BS artist (include graphic). He had the add to the right, it made me feel nauseous.
So how did Frank find a GREAT agent outside of the DC area? I went to a STAGER! An interior designer that helps Realtors sell for top dollar. I figured an agent that uses a stager, now he “gets it.” He knows that people buy on emotion and $500-$2000 or minor changes can help the seller get $5,000 to $15,000 more.
The stager recommended 3 agents. I grilled them and found a great one. Believe it or not I didn’t even try to bargain him down. This guy was great and deserved his commission.
They staged it, took amazing photos and it received 3 offers in the first weekend (another similar unit sat for 70 days!) He walked about with $10k-$15k NET higher than what he expected to get FSBO. And not to mention he is a doctor that wouldn’t have time to deal with everything as a FSBO.
My sister in Seattle is about to sell… guess what I’m going to tell her? Find a great stager, that will find you a great agent, and net more.
So to recap, would you rather “save” $20,000 by bypassing fees, or would you rather NET $20,000 more and remove the hassle factor or doing it yourself?
Before I sign off, make sure you do two things.
cess, not a smug know-it-all looking after the agent's best interest.
Source Google Trends: 
This shows me: 
Ever heard the phrase "Hurry up and wait"?
he process is pretty stressful, and the faster you can unload the property, the better, right? Here is where the counterintuitive part kicks in... you sell it FASTER if you give your agent, stager, and sometimes painters and photographers the proper amount of time to get everything done perfectly straight out of the gate.
t of your efforts into the first "launch" of your product. 
there are a certain number of buyers waiting on the sidelines for a home to go on the MLS in a certain zip code. They have MLS email alerts set up. Once it hits, that backlog of buyers will see your house within the first 10 days. These are the best buyers since they probably have been looking for a while and are ready to act on the perfect house.
le I used to think staging was swinging past Target and picking up $100 worth of junk and plastic flowers, it is so much more (and now I'm learning that there is a huge difference between a 2-day certified "stager" and a design degreed professional. It makes a difference, that difference nets you more. Blog coming soon.). Actually we recommend taking staging a step further and oftentimes undergoing light construction and repainting. Each house is different, but it takes time to do it right. Expecting designers to work their magic in one day would overflow mental institutions across America! 
Last week 3 people texted me (or would that be "text me")
saying "Turn on 60 minutes," yet I missed it! (
So let's start with the latter...
You've seen the magazine headlines about selling For Sale By Owner and saving $20,000! Well I'm going to 
nowhere. Instead, just allow for my biases and opinions, you filter them out and do as you please with the information.
ll know what that spells backwards!... Wow, cool, I didn’t even plan that. Racecar! Anyhow, this bullet point. So pretty much the same Econ 101 example detailed above. If you are FSBO offering 0% buyer agent commission, you pretty much exclude 90% of buyers, even if they did a find you. (Note that good Realtors, like us, will show you everything (read 
"Gadfly," 1) a person who upsets the status quo by stimulating innovation by proving an irritant. 
ork for. (new blog soon)
paper? We can do that too.
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