I'm so sick of the National Association of Realtors. Today, it's not because of the $1.8 billion lawsuit they recently lost because their commission practices were deemed unfair and the trade group was found liable for conspiracy to inflate rates. And it's not because of the recent sexual harassment allegations. Today, I'm sick of the NAR feeding the public misleading statistics.
The National Association of Realtors (NAR) is the second largest spending lobbying group in Washington! They spend more than Amazon and Meta combined! Needless to say they are spending A LOT of money (more than $33 Million so far this year and more than $81 Million in 2022!) to get their policies and procedures green-lighted in Washington, DC. The statistic that is sticking in my craw today is this one:
When an aging parent decides it's time to sell the family home and move into perhaps an assisted living situation or a multigenerational home, they sometimes sell the family home to a child. They often sell the family home to a child for $1.00 as a technicality. More often than not, no real estate agents are involved in this type of transaction, making it technically a "For Sale By Owner". So goes on public record a For Sale By Owner transaction for $1.00. The National Association of Realtors has an interest in pushing out the message that For Sale By Onwer (FSBO) sales sell for less than agent-assisted homes. Because if FSBOs sold for just as much (if not more) than agent-assisted homes, why would anyone use an agent??? Do you think averaging in all of these non-arms length transactions between family members for minimal payment has an effect of the median price of "For Sale By Owner" transactions? You bet it does!!! In fact, a very recent study (independent of the NAR) found that For Sale By Owners actually sell for 1-4% MORE than agent-assisted homes! The moral of the story is please take all statistics and information from the troubled NAR with a HEAVY grain of salt. They are in the business of supporting their Realtor members and this includes discrediting any methods that pose a threat to their livelihood, like For Sale By Owner.
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Living in Arkansas? Thinking of selling For Sale By Owner (FSBO)? START HERE!
At FSBO Sherpa, we are big fans of Dear Monty! Richard Montgomery (aka Dear Monty) is the Founder of PropBox, the first advertising platform to bring home sellers and buyers directly together to negotiate and close the sale online. He offers readers solution choices for their real estate questions. Follow him at DearMonty.com.
Read a short article from him here: The Evolution of Home Sales is Here You have to keep in mind where this "data" is coming from. The National Association of Realtors (NAR) is the largest trade association and also the biggest government lobbyist in the United States. They have come under extreme fire recently for questionable internal ethics as well as losing a $1.8 BILLION dollar class action lawsuit claiming their practices were unfair to consumers. It is their ultimate mission to support their members (Realtors) and promote the concept that in order to sell a home, you MUST hire a Realtor. Obviously, their numbers and "data" will be tailored to promote their interests. When a mother sells her home to her son for $1.00 without an agent, that technically qualifies as a For Sale By Owner and that $1.00 sale factors nicely into their figures that FSBOs sell for less than agent-listed homes. Take all "data" from the NAR about For Sale By Owner with a HUGE grain of salt!
MoneyWise For Sale By Owner (FSBO) Article 12.05.23 BREAKING NEWS: Judge Andrea R. Wood has ruled that a pending lawsuit challenging the way real estate commissions are paid should be upgraded to a class action lawsuit, substantially expanding the scope and potentially dramatically impacting the way real estate commissions are paid.
Read the full article on Real Estate News here. Plaintiffs in the Moehrl vs. the National Association of Realtors, et al., (originally filed in 2019) allege that requiring home sellers to pay commissions to buyers brokers is a violation of federal anti-trust laws. Historically, when a listing agent charges a homeowner 5% (for example) to list and sell their home, part of that 5% (usually half) goes towards paying the buyers broker. The plaintiffs in this case say they were damaged because they paid a cost — the buyer's agent commission — that would have been paid by homebuyers in a competitive market. Judge Wood ruled today that in addition to the handful of people who originally sued in 2019, the outcome of the lawsuit will be expanded and cover home sellers "who paid a commission between March 6, 2015, and December 31, 2020" to specified companies and MLSs as well as "current and future" sellers engaged with those entities. That significantly broadens the scope to a pool of home sellers that sold their homes over a 5 year period and paid the buyers broker commission. Additionally, she expanded the language to include "current and future" sellers. This strikes a blow to the defendants, which include the NAR, many of the major real estate brokerages and major MLSs, virtually insuring this case will head to trial, according to an industry insider. At FSBO Sherpa, we have always contended that the current model of how real estate commissions are paid is broken. This ruling unquestionably supports our beliefs. Why should home sellers be asked (REQUIRED actually!) to pay the fee of their buyers' agent? Maybe that buyers agent has spent the last 6 months working with these buyers, driving them around to look at several houses, putting in several offers for their buyers, only to not have those offers accepted. Why should YOU, the home seller, have to pay for that agents last six months of work??? The buyers should pay their own agent for the work they perform. We are keeping our eyes closely on this case because it could have dramatic implications on how real estate commissions are paid. If you agree that the archaic way real estate commissions are paid is blatantly unfair to home sellers (and buyers alike), For Sale By Owner may be the right option for you. And if you want to list and sell your FSBO like a pro, please contact us at FSBO Sherpa. We recently came across a great website and resource for any For Sale By Owners and wanted to share it with you. DearMonty.com should be immediately saved as a favorite in every FSBOs web browser! In fact, here is a link to search results on DearMonty.com for articles related specifically to For Sale By Owner: For Sale By Owner (FSBO) Articles on DearMonty.com. Skip the first four results. Those are paid advertisement placements (Hey, Monty's got to pay the bills, too! Cut him some slack, ok?). Start with the article entitled, "Does for-sale-by-owner (FSBO) work?"
Monty consistently gives great, no-nonsense advice and spending some quality time perusing his website is only going to make you a better FSBO! I also bought Monty's book "House Money" and I am now considering it REQUIRED READING for any of our For Sale By Owner clients! I bought the Kindle version and for $5, you can not make a better investment in your home selling (and buying) education. Get your copy now! Knowledge is power and this book is full of knowledge. I've never met the man, but I can tell Richard Montgomery (aka Monty) is a man after my own heart. Like me, it seems like after working many years in the industry, Monty saw that the current real estate system is flawed and not as consumer-friendly as it could and should be. His no-nonsense approach really resonates with us here at FSBO Sherpa, and I can not recommend diving into his website and book enough! (This is not a paid endorsement. These are not affiliate links. I get nothing from mentioning Monty except the hope that we get to work with better educated clients. Because a better educated client is the best client!) When you're ready to list and sell your home professionally ON YOUR OWN, and pocket all that extra hard-earned equity by NOT paying expensive real estate commissions, please contact us. Empowering homeowners and saving them tens of thousands of dollars is what makes us tick! I get Google alerts everyday for the word "FSBO". Any time an article is published online containing "FSBO", Google tells me about it. Today's find was eye-opening! Not so much the article itself, but the comment section. 1,045 comments and counting at the time of posting! I haven't read them all (because... you know, life/work, etc...) but the general consensus seems to be that Canadians are NOT happy with the current way the real estate market is working.
The article is definitely worth a read (check it out here), but the comments are also worth browsing! The readers make some good points. What other industry has enjoyed a pay raise equivalent with the rising prices of real estate? Real estate attorneys, appraisers, home inspectors, professional photographers all provide the services a real estate agent provides, but NOT BASED AS A PERCENTAGE OF YOUR SALES PRICE! There is a strong argument to be made that the commission-based model of paying real estate agents is completely outdated and flawed. Hourly rates or salary might make better sense for paying real estate agents, but good luck finding that (I know, Redfin is addressing this issue, but they are the exception, not the norm). Browsing through the feedback in the comment section of this article just got me fired up about what FSBO Sherpa offers to homeowners! If you feel that paying 5% (or more) of your sales price to a real estate agent to list your house for you is simply not fair, please contact us! We agree with you 100% and would love to show you a different way to sell your home. "It’s true. Selling a home by owner is not nearly as difficult or complicated as most people assume. I speak from experience, having done so 4 times in the last decade including twice in 2021."
This is the first line from an article we read today. It's always nice to hear real life success stories that others are having going the For Sale By Owner route! The author here details how they saved about $50,000 in real estate commissions by selling For Sale By Owner. These home were also in much lower price point parts of the country than we have here in the Northeast, so your savings theoretically would be even more around here. He gives some good advice about going about it, but if you want a professional guide in your corner, teaching you step-by-step what to do and providing you with a complete marketing program, give us a shout. We'd love to help you write the next FSBO success story! The Wall Street Journal published a nice (and visually appealing!) little piece on the case for getting a home inspection done BEFORE listing your home. We highly recommend this practice as it helps uncover any items that your potential buyers will discover in their process of inspecting your home. Also, providing this pre-listing inspection report to your potential buyers shows a deep level of transparency that builds trust with your buyers. It lets them know you've got nothing to hide with your home. It also demonstrates a level of thoroughness that most buyers will appreciate. In their minds, buyers will say, "If these sellers went to the trouble of inspecting their home BEFORE listing it for sale, they are probably pretty adamant about the details of maintaining their home well!"
If there are issues with your home, it is FAR better to address them voluntarily before they come up at a Buyer's inspection and you are FORCED to deal with them to keep the transaction together. Some home inspectors (we're looking at you Patriot Property Inspections!) will perform a pre-listing home inspection and if everything looks good, will deem your home as "Move-In Certified" which can help smooth over the process with potential buyers. If your home is in good shape, this is a great option and a strong marketing tool in your For Sale By Owner journey! Read and enjoy the article here: https://www.wsj.com/story/heres-why-you-should-consider-getting-an-inspection-before-selling-your-home-4d3c41d3 Interested in exploring your options for For Sale By Owner? Contact us and let's have a chat! We keep getting hints of potential good news about the housing market. No one is ready to definitively say, "Yes! Houses are back, baby!!!" but we are seeing some potentially positive economic indicators. Here's a little blurb I read today from one of my daily tech and business podcasts, The Hustle Daily: https://link.thehustle.co/view/5f3b6e4c2c81bf631409f4a1i471a.923/4c99d740
We'll keep passing on the housing news we hear and see. Real estate is historically resilient. Tides ebb and flow, but over the long haul, real estate has always been a good investment. With interest rates easing off their recent spike, we should see a strong market emerging in the coming weeks and months. |
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