Petaluma, CA (PRWEB) May 2, 2006
A new website, FSBOPrimer.com, offers practical advice to real estate buyers and sellers about how to save on real estate commissions. The website’s author, economist Lori Alden, explains how sellers can save by taking over the duties of the seller’s agent, and how buyers in most states can get commission rebates—often worth thousands of dollars—by doing much of the work of the buyer’s agent.
The savings can be substantial. On a $500,000 house with a 6% commission, for example, the seller’s agent and buyer’s agent would split $30,000. The seller’s agent helps the seller with pricing, marketing, and negotiations, while the buyer’s agent shows the house to prospective buyers and brings in offers.
But Alden claims that the seller of such a house could save more than $10,000--and get better service--by skipping the seller’s agent and selling “For Sale by Owner,” or FSBO (pronounced “fizbo”).
Alden explains that while it makes sense for a seller to offer a generous commission to buyers’ agents, it’s often better to hire out most of the services performed by a seller’s agent. In most areas, it costs less than $5,000 to get full representation by a real estate lawyer, professional photography, quality signage, a virtual tour, a two-hour staging consultation, a professional appraisal, a webpage, flyer design and production, a Multiple Listing Service (MLS) listing, and flyer distribution to buyers’ agents in the surrounding areas.
“I think you can get much more bang for your buck by hiring a team of specialists instead of a jack-of-all-trades seller’s agent,” Alden argues. “For example, I’m constantly amazed at the amateurish photos that agents put up on Realtor.com to sell homes worth hundreds of thousands of dollars. A FSBO seller can hire a professional photographer for about $100.”
FSBOPrimer.com also shows buyers how to save money. The trick, says Alden, is to search for homes on the Internet and then find a buyer’s agent who is willing to rebate part of the commission back when the deal closes. One online broker will rebate as much as 75% of the buyer’s agent’s share of the commission. That would come to $11,250 on a $500,000 house with a 6% commission.
But buyers need to know what they’re doing. The website explains, for example, how the simple act of visiting a model home in a new development could cost a buyer thousands of dollars. If a buyer isn’t already working with a discounter, the agent on duty at the model home may be able to capture the entire commission.
Unfortunately, not all buyers can get rebates. The practice of rebating commissions has been outlawed in ten states, thanks, says Alden, to powerful real estate lobbies. The U.S. Justice Department and Federal Trade Commission are starting to challenge those bans, however, on the grounds that they violate antitrust laws.
FSBOprimer.com is filled with step-by-step instructions, whimsical photos, and personal anecdotes. Author Lori Alden has a doctorate in economics, and has taught at the college level for almost 20 years. Over the years, she has bought and sold several FSBO properties.
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