For Sale By Owner

     It was almost impossible to buy a house in Hainesport twenty-five or thirty years ago.  This township was like the Hotel California - you could check out, but you could never leave.  If you wanted to check in, you had to wait for some old timer to die.  Then you could buy the place ... unless one of his kids moved back into the house.  Thanks to a couple of developers (and a couple of retired or dead farmers) we had some spurts of population growth.  When the housing bubble broke around 2007 there were some houses, but it was difficult to qualify for a mortgage, and the properties sat, and sat, and sat.
     These days I see lots of for "For Sale" signs.  When I go to Realtor.com I see that the properties don't last long on the market.  Unless a place is tied up as a foreclosure or short sale, or it is priced too high, it sells pretty quickly.
     As Mike and I ride our bicycles around town, we see that Weichert, Remax, Century 21, Keller Williams, Long & Foster, and Berkshire Hathaway hold most of the listings.  Those guys are getting about 5% of the sale price of every piece of real estate that's sold.  That's $15,000 on a $300,000 house.  You can buy a Ford Focus for that kind of money.  Why don't people sell their houses on their own?
     Before Mike and I moved into our current abode, I sold my former home as a For Sale by Owner (FSBO pronounced fizzbo).  It didn't take long for me to figure out that the professionally lettered sign I planted in front of the place was only drawing some local looky-loos.  I sent emails and flyers to all the local real estate offices.  I got a bunch of offers to sign up and list the house from various agents.  None of these agents wanted to bring anybody over.  I could have placed advertisements in the local papers and hosted open houses, but newspaper ads are expensive.  Besides that, most people were shopping on the internet.  The answer was to get the house on the MLS which would get it on Realtor.com.
     Thanks to my sister-in-law, I learned about Realmart Realty.  For a flat fee of about $395, Realmart put my house on the MLS, which meant that the house was also on Realtor.com.  I decided to offer the buyer's agent a small commission.  Suddenly real estate agents were trooping through, and I had a contract in two weeks.
http://www.realmartrealty.com/Default.aspx
http://www.linkedin.com/in/jackyao

     I just got an email from Realmart.  They have an interesting new option called the Buyer Rebate Program.  Instead of going to Remax or Century 21, buyers sign up with Realmart.  They travel around to open houses until they find a place on which they would like to make an offer.  Then they contact a Realmart agent who handles the sale.  When all is said and done, the buyer receives a rebate from the commission paid by the seller.  They can use the rebate toward closing costs or to reduce the purchase price of the home.  All of this happens because Realmart is a transaction broker.  Transaction brokers remain legally neutral, working for neither buyer nor seller. They have to act honestly and fairly within the law.  They often work for a flat fee.  Here's an article about transaction brokers: http://smallbusiness.chron.com/transaction-brokerage-750.html

And here's a video:
     
         


          Working with a transaction broker is not the way it's usually done.  From the seller's side, a transaction broker is an attractive option because the costs of selling are reduced.  When I sold my house five years ago I had two options.  I could pay just $395 to get my house on the MLS and hope buyers came my way.  I could also offer the buyer's agent a commission of 1% to 3%.  I offered 2% thinking it was neither so cheap as to insult the agent nor so generous as to hurt my pocketbook.  These days the seller can't get out of paying a commission of 2% to 3% to the sellers agent - unless you are lucky enough to find a buyer without an agent.  Even with paying a 2% to 3% commission, the costs are smaller with a transaction broker.
     From the buyer's side, there may be more disadvantages than advantages to going agentless. You have to find your dream home by yourself by researching on the internet and going to open houses.  Since a transaction broker doesn't have a fiduciary responsibility to anyone, you won't be suing your agent if something goes south.  You could hire an attorney, but that would eat up your Buyer Rebate.
     Still, a transaction broker could be the way to go for those with an independent streak.  You won't find smaller commissions or rebates to buyers anywhere else.