I keep seeing and hearing about "dirty little secrets" that real estate agents won't tell their clients. Most of them turn out to be pretty stupid points. However, today while going through my morning routine (dead-heading, so my brain needed something to do) I thought of the dirty little secret that FSBO companies don't tell their customers. We all know what it is, but many of us just might have never thought of it this way.
They don't care if you sell your house using their service.
That's it. It doesn't affect their business plan if you sell or don't sell your house through them. They only care if you list your house through them. Their business model is only dependent on you paying $499 (or whatever amount) upfront, and then going on your merry little way. They need as many people as possible to pay the $499 and go on their merry little way as possible.
Sure, they need somebody to actually find a buyer through their service occasionally, but as long as they have enough sales for a few testimonials, they'll be OK. And, they don't care if you sell in 6 day, 6 weeks or 6 months. In fact, some of the companies would prefer that you not sell right away, as they'd love to get another $499 out of you to list again.
Let's compare that to a traditional full-service, commission based real estate agent. No sale = no money. That's right, I don't get paid if you don't sell your house. Let me say it again, I don't get paid if you don't sell your house. I talk with you about pricing, we prepare a marketing plan, and we market your house. After we find a buyer, we help you negotiate the sale, and then we make sure that the buyer follows through. We also make sure that you (the seller) don't run afoul of any rules, or mistakenly breach the contract as we move from contract to closing. We are there to protect you, and help you. We are there to make sure that everything runs smoothly.
Where is the FSBO marketing company? They cashed your check, and they are hoping that you don't call, because it takes time away from getting $499 from someone else.
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Unless otherwise noted, all content of this blog is the property of Lane Bailey, ©2012 Lane Bailey.
I'd love to hear from you...
Great post ,I always wonder what their stats are
We know this all too well, Lane. Because when we list a house that was previously listed by a FSBO in the MLS service, the other company gets paid the same, whether it was successful or not.
RIGHT ON BRO!
I actually think they prefer that the homeowner NOT sell their home because then they don't have to do much and they aren't liable for anything. They also seem to make a ton of money on homeowners selling them extra stuff like open house signs and marketing flyers.
I think many of them will be going by the wayside soon...
Great post Lane!!! The stats I get from my corporate office say that only 2% sell.
Boy, I just realized that I hadn't answered all of the comments. I am bad...
Jason - Thanks. It just occured to me while talking with a FSBO guy. He had been advertising his home for a year, and paid about $6k including MLS listing and marketing... but he was positive he was saving money. BTW, on his $200k home, that is the three percent he wasn't paying to a listing broker.
John - We would have to rely on the numbers from the various companies. I know of a couple that have claimed a sale after an agent took the listing (but while it was still under their 6 month agreement).
Margaret - Me too.
Ardell - It is part of their business model. I have told a few people that I would give them the same deal...
Nicole - Let us know how it works out.
Melissa - Thanks.
Patti - There are companies that make ALL of their money on the extra junk.
Debra - When the market gets a little ugly, people come back to us.
Wayne - Maybe we should try to get this on the major media...
Brad - I'm with you, but the current studies are all pretty flawed... one way or the other.
Ashley - I have little hope that enough of the FSBO or unbundled service users will read this.
Donna - Thank you.
Keith & Robin - I see a lot of statistics floating around. None of them agree. More importantly, nobody wants to reveal their methodology, so we can't know how accurate any of them are.
Tania - Thanks
Zen - I agree. I hope that this will help someone, but I'm not hopeful... unless it gets picked up by Fox News.
Donna - Thank you. I have it on my other blog which is completely consumer oriented.
Hugh - One of the problems is that the media and all of the "objective" sources always are quick to mention one side of the equation, and a little slower on the other.
Man you are right on the money with this. I really feel bad sometimes when people dont understand why we are motivated to sell their house (its more than just the money) and why FSBO companies care less (it is all about the money and they already got your $!)
Shane - Thanks.