Anyone in real estate knows what “Fisbos” are: For-Sale-By-Owner properties. Fisbos are great farming prospects, they own property and it’s for sale. Moreover, statistics indicate that they will usually do better using the services of a Realtor than they will on their own, even after paying for the commission (which they never believe). Mr. Fisbo’s is usually a nice enough person and his problem is simple: he hates to pay a commission!
New agents are often tempted to attempt to show ands sell Mr. Fisbo’s property for him without first obtaining a listing. If you’ve been in real estate more than a week, you’ve probably heard the usual dialog:
- Mr. Fisbo: Well…I won’t list it with you right now but I would pay you a commission if you can sell it…just let me know and I will let you show my property
- New Agent: Oh…OK. I’m sure I can sell it for you…
Now any agent in his right mind would never, ever, ever respond like that. Why?
- If you tell him he does not have to sign a listing agreement with you to obtain your services, why should he ever do so? His whole problem is that he doesn’t want to be made to sign something so why encourage him in this?
- If you don’t have a listing you can’t put the property in the MLS! So you are telling him you will do a job for him (selling the property) but denying yourself the tools to do it.
- If you are foolish enough to spend money advertising it somewhere, you will get calls from prospects who end up having their own broker etc., and you will not be able to insure that you will be compensated!
- Very frequently your prospect will end up buying the property from the Seller without your participation. Despite the notion that they teach you in real estate school that you can collect a commission in such a case, it is very, very unlikely that you will. Why? Because your only remedy would be to sue the Seller. All costs of doing this would have to be advanced out-of-pocket and are considerable The sale will be over, the Seller will have been paid by the Settlement Agent and he may or may not have any assets that you can locate so even if you won a judgment you might never collect Seller may be out-of-state, hard to find, or otherwise impossible to track down
So if you are foolish enough to offer to show and sell his Fisbo property, the most likely outcome is that:
- You will never obtain the listing
- You will never actually sell the property
- When he does list it (and they almost always do finally), you will have proved to him that you are not “good” enough so he will list it with a “real” professional (someone who would not play along with him about showing it without a listing)
- On occasion you will even produce a full price offer for a FISBO and find that he/she will not sign it. (If you think I’m kidding, ask Susan Weitz). With a valid listing you would get paid…probably. With a FISBO you will embarrass yourself with your customer and end up without a cent.
- Fisbos will often try to chisel you on the commission when they actually do receive an offer…then what? Both parties have probably met and talked it over, how can you resist?
So here’s how the dialog should go:
- Mr. Fisbo: Well…I won’t list it with you right now but I would pay you a commission if you can sell it…just let me know and I will let you show my property
- Experienced Agent: I would love to sell this property and I know I can do it, given the right tools. But I must have the listing in order to place your property on the MLS and market the property.
- Mr. Fisbo: But, if you get someone who really wants this property why won’t you sell it? I promise I’ll pay you.
- Experienced Agent: Because I am not an amateur, I am a licensed professional and work in real estate for a living. I sell property to my customers and I sell the property of the people who employ me.
In order to protect you from falling into the foolish trap outlined above, and in order to protect the reputation of our company and its agents, please do not show or discuss Fisbo property to your prospects unless they are willing to sign a Buyer Brokerage agreement with you and have done so. Occasionally, a Fisbo is willing to sign a listing agreement for a single prospect. This is a regular listing agreement that is valid for the named buyer.
Do not, under any circumstances, accept keys or other access devices to a property for which you do not have a valid listing. Our listing agreement protects us against claims for loss and damage which could come up. We cannot accept the responsibility of having someone’s keys without a written listing contract.