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May 7, 2009
Broker or FSBO
Hello... any comments on how hard it is to do a FSBO? I am thinking about selling but in this market the brokers' cut could be the difference between losing a lot or maybe coming out even...
Comments
I think you need to provide more details to what type of property you are selling to get some answers here.
I am sure there are some people who have success with FSBO, but it depends on the location and quality of your property and how organized and informed you are about the current market. Also determine how internet savvy you are as maintaining your listing will require a lot of time and detail. I beleive that having a website or a listing on a FSBO server site is crucial to selling your house in addition to NYTimes ads and Craiglist.
Good Luck!
Posted by: gemini10 at May 7, 2009 10:26 AM
Thanks... its a one bedroom coop, Ditmas Park, good shape, nice building.
Posted by: coopfornow at May 7, 2009 11:06 AM
Good staging. Good photos. Good website. Good marketing skills. Good people skills. And lots of time.
Posted by: rh at May 7, 2009 11:23 AM
In this market it will take a fair amount of your time to show the apartment. That being said if you have the extra time and are able to show to people who can only see during the day or at odd times you will save a great deal of money. Try it for a few weeks and see what happens. I second the need for a good website, pictures and floor plan.
Posted by: PHfamily at May 7, 2009 11:50 AM
Ditto the above, and PRICE IT RIGHT! If it's priced wrong, people will be less likely to go see it, and the time spent that way will probably end up driving the price down. You should also consider marketing within your neighborhood...
Posted by: Minmin at May 7, 2009 11:57 AM
As a broker, you'd think I would say "hire a broker." In many cases, that's the right move. But if you choose to go FSBO and are willing to carve out 3% for a co-broker, you can save yourself a lot of time/money/hassle. Why? Because brokers will call you anyway trying to get the listing (annoying time wasters!), and if they actually DO have buyers for you, they are unlikely to steer them to your listing if they think they can't make any money doing so. The upside is a) lots of us do have actual qualified buyers for whom we do this legwork, and b) we take the buyers through the financing and board process, which is exhausting.
If three percent seems too high for your margins, consider a referral fee - a flat fee to the broker for bringing the buyer to you. But then you go through the board process with them yourself.
In either case, I think it makes sense to ask the brokers NOT to advertise your apartment. Too many agencies listing a place looks hinky.
Posted by: tina24hour at May 7, 2009 12:59 PM
As a buyer, I won't even know your apartment exists unless I can find it on a major service of some kind (nytimes, streeteasy, etc). I do not look at craigslist ads.
I also am comfortable dealing with brokers. They are salespeople and I know their pitches. The good ones have thick skin and don't take anything personally. I actually prefer not to deal with owners because you know they are going to be emotional no matter how hard they try not to show it. I'm not saying I won't look at an FSBO, just that I kind of prefer to deal with brokers. If I can find your place and it fits my search criteria, I will look at it.
Posted by: lechacal at May 7, 2009 1:19 PM
I sold a [cheap] place a few years ago, and it was easy. However, the market was much better, and my place was tiny and very low-priced. I think, the more expensive the place, the more you may need a broker. For cheap places (pretty much all I know, although "cheap" is now over 300K), I think buyers know to check craigslist & NYT. I think some sophisticated buyers may not want to deal with a FSBO, sorta how lechacal mentions. But, people looking for a bargain (or, an inexpensive place) probably don't care who they deal with.
Posted by: broadwayron at May 7, 2009 2:17 PM
I sold my one bedroom in Park Slope a couple of years ago as an FSBO. Here's what I learned:
1) The people who are looking in the one bedroom price range are usually younger people and therefore more tech savvy. They will definitely be looking in the NYtimes (to a lesser extent, craigslist, but listing is free on cl, so why not?). It's true, the more expensive the place, the more likely people will be relying on brokers to do the digging around. But that's not the case for your one bedroom.
2) Learn the market and price right. Look at listings and recent sales in NYTimes. Find places similar and price accordingly. You can also get a good idea about wording for your own ad.
3) Clean and declutter. Take down any personal photos, figurine collections, etc. No one cares or wants to see it. Don't forget the closets and cabinets because people will look in them. The fewer items you have sitting on shelves, tables, etc. will make the place bigger.
4) Definitely need a website with photos and floorplan. Save yourself (and other people) time by posting this information because you don't want people showing up and finding out it's too small or all wrong, etc.
5) Stage the hell out of the place. I rented a storage space for the duration of the sale and removed almost half my furniture and crap. I also moved furniture before open houses to give ideas of how to use the space, even though i didn't live that way.
6) Schedule open houses. Keep a sign-in sheet so you can follow up with people who are interested if you want. Also have a printout of the apartment layout with a few choice photos and pertinent info. Get some plants and flowers.
I managed to sell my place for more than I expected. It IS hard work, with scheduling, cleaning, decluttering, more cleaning, photos, website and ads. But I also saved myself almost $15,000. Good luck
Posted by: newhomer at May 7, 2009 2:51 PM
I forgot to add that you should check what qualifications your coop board needs for entry in the building. Generally, the percent down payment, how much in assets on top of that and salary requirements. Make sure you and your buyer use lawyers to do paperwork.
Posted by: newhomer at May 7, 2009 3:05 PM
A good thing when selling FSBO, is you should be able to answer many more questions than a broker would. Hopefully you know your apt and building very well.
A bad thing is, some people don't feel as comfortable poking around your apt while you are present... they are also more likely to present your apt's misgivings to a broker, than to you.
Posted by: broadwayron at May 7, 2009 3:17 PM
use a broker you cheap bastard.
Posted by: Xander Crews at May 7, 2009 3:34 PM
I second the very good advice of newhomer. We sold a brownstone in Bed-Stuy ourselves in Nov. of 2007 and had the same gameplan, including making a website. Good photos are key -- we had a friend of ours who's a professional photographer take pictures because a wide-angle lens really makes a place look big and impressive. Another tip: say "no brokers" in your craigslist ad, but be prepared for brokers to contact you anyway. I kept the brokers' information in case we got desperate and wanted to use them, but we were able to get a good offer (that led to a sale) within three to three and a half months of putting it on the market. It was a lot of work, but if you have the time and are a self-motivated person I feel like it's totally worth it.
Posted by: Kate at May 7, 2009 8:35 PM
I think you should definitely try FSBO before going to a broker--you have little to lose. In addition to all the great suggestions here, definitely make a nice flier that folks can take with them with photos, price, monthly cost less tax deduction, etc. (when I sold my Manhattan apt I totally copied one of the handouts from Corcoran or another big firm).
Also have a real estate atty lined up and let them know you're going FSBO so that they can be prepared to handle a sales contract and associated questions.
Good luck!
Posted by: tinarina at May 7, 2009 9:38 PM
We're in the process of selling our co-op FSBO, and if I had to do it all over again, I'd hire a broker. It's a completely different market than it was a year ago, and many steps of the purchase process are far more complicated than they used to be. We had a deal that fell through in January because of all of the different requirements that banks now have in place. The banks have been particularly hard on co-ops, mostly because banks don't understand co-ops. Not only is a broker able to bring in well-qualified, motivated buyers (as opposed to people who are "just looking" -- which is A LOT of what we got at our open houses), but they are also much better able to negotiate the ever-changing mortgage market than you are. We basically had to devote our lives to researching new bank requirements, and our deal STILL fell through. With all of that said, we have a new buyer, and I'm crossing my fingers that it goes through, but who really knows these days? If this one falls through, too, I'm running out and hiring a broker stat.
A few recommendations I would make is to require a prospective buyer to have 20% to put down (even if your co-op only requires 10%), to have adequate post-closing liquidity, and to have an EXCELLENT credit rating (720+). And I echo everything else that was said: de-clutter; stage the heck out of your place; make any minor, cosmetic improvements you can; and put together a professional looking website with great photos.
Posted by: jxc187 at May 7, 2009 9:49 PM
The responses here are primarily aimed at finding a buyer, but that's really only a portion of what a broker does. I just bought a brownstone, and found that connecting me (the buyer) with an appropriate property was only a small portion of what our broker did for us.
The financing process was hellacious. Fannie Mae changed its lending rules while we were mid-application, there was a weird situation with an appraiser being taken off an approval list mid-appraisal, the appraisal came back wrong, and many many other crazy unpredictable things, a number of which were caught by and handled (expertly) by the real estate agent. There were at least three steps during the financing process at which the deal would have fallen through if the agent hadn't been involved.
If you're not in any hurry to sell, and won't stress out if your first three buyers fail to secure financing in this ridiculous market, then FSBO might be an ok option.
May I also recommend our broker? Gabriele Sewtz at Prudential Douglas Elliman. I'm generally inclined to have a low opinion of real estate agents, but Gabriele was fantastic.
Posted by: UnprotectedWrecks at May 8, 2009 9:22 AM
I sold a place on my own once...and I actually bought my current home from a homeowner. And previous poster newhomer is right on. From my experience, the lawyers work out the primary details. Never felt the need for a broker.
Posted by: clintonhillgirl at May 10, 2009 6:44 PM
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