Selling your Miami home For Sale By Owner, or FSBO, is a tough proposition if you go about it haphazardly. However, by avoiding these common Miami FSBO seller mistakes and by making sure your home has proper marketing exposure through the MLS, you can save up to all 6% in traditional broker commissions.
In this article, we’ll go over how to sell your Miami home FSBO and what’s wrong with the traditional method of selling FSBO without MLS exposure or proper marketing, as well as ways to remedy these typical FSBO seller mistakes.
Why should you bother dealing with buyers’ agents, or any agents for that matter, when you’re selling your property FSBO in Miami? Isn’t the point of trying to sell FSBO to avoid real estate agents and having to pay them a commission in the first place?
Well, as satisfactory as it might be to completely ignore all real estate agents, doing so would be extremely detrimental to your ability to actually sell your home, or to sell your home to someone who isn’t a vulture investor.
Why? Because buyers’ agents historically represent three quarters (75%) or more of all home buyers, and up to 90% of all buyers in competitive markets like NYC and Miami.
Why do buyers choose to be represented?
Because home buyers in major cities like Miami or New York always seem to have at least 5 real estate agent friends, and these agent friends are out there pitching their “free” services as a buyer’s agent day-in and day-out, at social gatherings and at the grocery store.
Considering that there’s 54,000 members in the Miami Realtors association alone, it’s no surprise that every potential home buyer in Miami knows an agent or two, and has been informed that it doesn’t cost anything for them to work with a buyer’s agent.
Technically, this is true since the home seller typically pays the entire real estate broker commission in a traditional transaction.
The listing agent secures a signed Florida listing agreement with the seller, whereby the seller agrees to pay typically 6% of the sale price in the event that a buyer is found.
Florida listing contracts then typically specify the co-broke (i.e. the commission split) to the buyer’s agent in the event that the buyer is represented by another agent. This will typically be half of the total commission, or 3%, per local Multiple Listing Service (“MLS”) co-broking rules.
However, if the buyer is unrepresented, the typical listing agreement in Miami will still award the entire commission to the listing (i.e. seller’s) agent, meaning the listing agent would get to keep all 6%!
Use it or lose it
As a result, agents constantly remind potential buyers that it’s “use it or lose it” when it comes to their right to free, dedicated buyer agent representation.
After all, if the seller’s paying for your right to have your own dedicated adviser who can help you schedule showings, discuss relative value, provide neighborhood overviews, explain the state of the market, negotiate and submit offers and generally be there as a guide throughout the process, why would any rational home buyer say no?
Moreover, if forgoing your right to having a buyer’s agent simply means the listing agent gets to keep all 6% of the commission, the seller doesn’t actually save any money by your noble act. The only person who wins in that scenario is the listing agent who receives an unexpected double-sided commission.
As you can see, ignoring buyers’ agents altogether is a terrible idea when trying to sell your home as the vast majority of buyers are represented by agents. Therefore, by ignoring buyers’ agents and selling FSBO your home is considered to be “off-market.”
So if it’s important to be inclusive of buyers’ agents when trying to sell FSBO in Miami, can sellers just offer commission directly, perhaps by even adding a sentence to their listing description like “buyer agents protected” or “will offer 3% to buyer’s agents?”
Buyer’s agents typically don’t have exclusivity with buyers
Unfortunately, as clever as this strategy may seem, it is totally ineffective for a variety of reasons. For starters, consider the fact that buyers’ agents usually do not have any sort of exclusivity agreement in place with buyers they are working with in competitive real estate markets like Miami and NYC (there are simply too many agents competing for potential deals).
As a result, each buyer that an agent works with is worth potentially 3%, or potentially 0% if the buyer ditches the agent. So why would any rational agent even send a FSBO listing to their buyer if the buyer could immediately look up the listing, realize it’s For Sale By Owner, and contact the owner directly?
They have zero assurance that you’ll pay
Then there’s the problem of guaranteeing payment. All they know about you is that you’re a Miami FSBO seller, which means not only are you actively trying to circumvent agents but that you most likely also despise real estate agents.
There’s nothing preventing you from removing your sentence about being willing to pay a commission from your listing description, and what’s to say you won’t deny ever even offering it? And if you simply “change your mind,” how can a real estate agent even enforce a claim to commission?
One-off commission agreements are tedious
Then there’s the clever idea of offering a FSBO commission agreement, or a one-time showing agreement to buyers’ agents to contractually ensure that they’ll be paid. While this is an improvement, it’s still extremely tedious for buyers’ agents to have to negotiate and have their managers sign a custom commission agreement for each FSBO listing they wish to show their clients.
Buyer agents won’t notice or care
The biggest problem with trying to offer commission directly as a Miami FSBO seller is that the vast majority of buyers’ agents simply won’t notice or even see your listing. Why? Because buyers’ agents typically only search the MLS for listings to send their clients.
Since only member agents can submit listings to the local MLS, and the MLS is governed by association rules, buyers’ agents know that all listings in the MLS are properly co-broked. This means that they are automatically, contractually offered commission on each and every listing in the MLS.
This greatly simplifies their life as they can show each and every listing without fear of somehow being cut out of the commission.
So think about it. Given the ease and assurance of sending listings from the MLS, where the vast majority of all listings reside, why would they bother scouring for the rare, occasional Miami FSBO listing where they risk losing their client?
Can Miami FSBO sellers list in the MLS?
While Miami FSBO sellers can’t list by themselves in the MLS, they don’t have to pay 6% in commission just to list in the MLS either. With Hauseit’s Agent Assisted FSBO listing service, sellers can pay a small, one-time flat fee to have Hauseit list their home in their local MLS. When inquiries come in, our call centers and server-level filtering systems automatically pass them on to you. Then it’s up to you to manage showings, offers and the rest of the process by yourself.
You save all 6% in commission if you find a direct buyer, and you’d only pay the buyer agent commission you chose to offer to buyers’ agents in the MLS if you decide to sell to a represented buyer. Furthermore, you’re in control of the listing and can decide whom to sell to or whether to sell at all. You can cancel and de-list at any time.
Skimping on professional photos in order to save a few hundred dollars is a classic, amateur For Sale By Owner move. Unfortunately for Miami FSBO sellers who go this route, being cheap in this instance will cost you magnitudes more than the few hundred dollars you save.
Think about it this way. The first thing buyers browsing online will see are a listing’s photographs. So while comparable listings in your area (i.e. the competition) will have stunning professional photography and possibly even videography, your listing will have grainy, tilted, poorly lit photographs taken from your grandmother’s flip phone.
Which listing do you think is going to attract the fleeting attention of that potential buyer? And what if that potential buyer was the one who could have paid the most? Each buyer counts in real estate sales, and it’s important to not lose out on a single one due to such an easily avoidable error.
Before
After
A picture is truly worth a thousand words. Did you notice that the before and after photos we included above are of the exact same living room in the exact same apartment?
The first photo was taken by a naive FSBO seller in NYC before she found Hauseit. The second photo was taken by our professional photography team. Which one would you want to go see if you were a buyer?
The danger of overpricing your home
Overpricing is one of the most common mistakes Miami FSBO sellers make. This is a deadly mistake as most of the listing views (i.e. “eyeballs”) come through in the first few weeks. As a result, the few buyers that do find your off-market listing will immediately be turned off by your overly optimistic pricing and will assume that you’re not a serious seller (being listed FSBO doesn’t help with the impression either).
Therefore, even if months later you cave and decide to reduce your price to something more reasonable, there’s a good chance that the buyers who noticed your listing at the beginning never even bothered to “save” your listing, meaning they’d never be notified of changes to a listing they’ve already mentally discarded.
This situation doesn’t bode well if you actually want to sell, or worse, if you desperately need to sell and this isn’t just a pricing exercise.
That’s because it becomes increasingly harder to sell as a listing gets more “aged,” meaning the day count or days on market count is greater.
Not only will you have squandered the initial wave (albeit a small wave since your FSBO listing is technically off-market) of interest, an aged listing naturally brings on suspicion from any follow-on buyers who question why it hasn’t already been sold yet.
Is your listing still on the market because there’s something wrong with it, or more likely, is it because it’s simply over-priced? These are questions and suspicions that will dog a stale listing regardless of how it’s listed.
Do I have to accommodate every showing request?
Yes. As we’ve discussed previously, every potential showing and every potential buyer is critically important in real estate sales because you never know who might be that special buyer that’s able to pay more than the rest.
As a result, the worst mistake that Miami FSBO sellers often make is to go into the process of selling their home half-heartedly, and haggle with potential buyers about availability for showings.
Perhaps you simply don’t feel energetic today, or you have a Zoom meeting you don’t want to reschedule, so you decide to cancel on your showing appointment. After a few of these cancellations, you suddenly find yourself without any prospective buyers, and the ones who had inquired previously have already moved on. Don’t put yourself in this situation!
