[quote=EconProf]
I’d like to ask again about another approach to the subject of commissions. Have any Piggs tried the ForSaleByOwner approach while advertising “courtesy to broker”, meaning 2 1/2% or 3% commission to a broker who brings in a buyer?
Two unusual elements of today’s San Diego market make this approach especially attractive: our extraordinarily low inventory combined with high prices. So a $1.5 million dollar newer house with plenty of close neighborhood comps (thus establishing a fair price), could attract realtors with a ready buyer and earning the broker around $40,000. Why would a broker turn that down? Of course the seller would be have to be knowledgeable because he/she has no one looking out for the their interests–perhaps hire a RE attorney to review the paperwork?[/quote]
I believe my dad did this once but to be honest I don’t remember which house or the outcome. It seems like it did work for him, but again I don’t recall the details which is why I didn’t respond to your initial question.
I think this is probably related to where he came up with his original theory that it is better to sell through a realtor and buy a FSBO without one. If you pay the buyer’s realtor you’ve already cut your savings in half and then when you factor in other costs such as MLS costs, lawyer fees, etc you really haven’t saved much. It seems to me he also stated that realtors like to deal with other realtors and are skeptical of working with FSBOs because they view them as inexperienced and troublesome which is another reason (beyond lack of commission) they steer clients away from FSBO.
That being said, he was doing most of these purchases/sales in areas where homes cost much much less than metro areas such as San Diego. In San Diego, 1% of purchase price can be $6K to $15K….multiply that to get 2-3% and you’re talking real money! He may have had a different opinion in that situation.
Hope that helps but I didn’t really add a lot of info.
