FSBOs and REALTORS® and Reality

Is it unethical for homeowners to ask a Realtor for a comparative market analysis (CMA) if they intend to sell the house themselves? That was the question raised on the Future of Real Estate Marketing blog recently. For Sale By Owner (FSBO) listings are always a hot topic, and there were some predictable answers given in the comments. One obvious response is, “No, it’s leading the Realtor on, and that’s not fair.” Or maybe, “Well, they do need to find out what the house is worth, but they shouldn’t pretend that they are going to sign with the real estate agent if they don’t mean it.”

As a real estate professional who makes my living by listing and selling homes, you might expect that I would agree. But I don’t.

My experience shows that, first, you are never going to get every listing you go after. It could be that the prospective client intends to pursue the FSBO route. It could just as well be that they like another agent better, or can negotiate what they think is a better deal from another agent. They might even change their mind about selling at all. As an agent you can choose to get upset about losing a listing, or you can move on to the next opportunity.

Second, we are not the only professionals who give free information and advice as part of our every day business. Investors ask brokers for information on stocks they never buy. People test drive cars that they end up buying elsewhere. It is doing exactly that – giving advice and the benefit of our experience – that can turn a FSBO to a client. When you spend one-on-one time with homeowners and give them honest answers and valuable information, that can open the door. When you explain all that’s involved in selling a home and following it through to settlement, and make it clear that what you do can put more money in their pocket, they may see the value and choose to list with you.

Even if the homeowner decides on the do-it-yourself route, that’s not necessarily the end. After being unsuccessful in selling by themselves, I have had people come back to list with me because I helped them earlier. FSBO’s believe they can save money doing it themselves, and sometimes that is true. But most of the time, they learn that buyers expect to get the benefit of the savings and so make low-ball offers even when the house is priced correctly. It also can take longer for an owner to sell a house, and the longer the house is on the market, the greater the perception it is overpriced. After a time of frustration, many owners are ready to hear that sellers who use REALTORS® generally end up with more money, even after deducting the commission, than those who do not.

Like anything else in life, it all comes down to how you treat people. If you go into a listing appointment with the attitude that the homeowner is going to take advantage of you or get something for nothing, then you probably won’t do well. But if you approach every meeting with a “what can I do to help this person” attitude, people recognize and appreciate what you do. When they are ready to list, chances are you are the one they will call.

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