Almost everyone has heard the term, "By owner". Synonymous to this and less commonly recognized by the public is the term is "FSBO". Pronounced "Fizbo", this term is used by many Realtors® and is the acronym for "For Sale By Owner". Relatively new to the scene is "By-Owner MLS". So, what do they all actually mean?
The term "by-owner" is spelled 10 different ways and can mean different things depending on who you are talking to. "FSBO" is often associated with a property seller displaying a generic red and white yard sign advertising their home for sale. Sometimes the terms refer to specific websites such as "by owner" or "BUY owner" (The "no commission, no kidding" people...we won't go into the deceptiveness of that claim right now). But universally, the term FSBO means selling real estate without the use of a real estate agent and without paying a commission. It's a person to person sale. No middle man agent.
If you connect the words "by-owner" with "MLS" you get a more powerful FSBO selling option. "By-owner MLS" describes the FSBO seller who wants to remain autonomous and have the ability to sell without paying a commission but who wants to still invite agents to bring buyers. In this case, the seller would the buyer's agent a commission, but not a listing agent commission.
Most of us have seen a "FSBO" yard sign that included the statement, "Brokers Welcome". When Realtors® see this message, they know the FSBO homeowner is inviting them to help sell their home. Or put another way..."I am cooperating/offering some type of compensation to an agent to bring me a buyer."
FSBOs that advertise this message have the right idea. It is smart to include the Realtors® since they are the driving sales force behind real estate. Typically, this For Sale By Owner is willing to pay just the buyer's agent a commission of say 3%. However, their message on the FSBO sign is not reaching the Realtors® because Realtors® search for homes using the MLS, not by driving around and looking for them.
Besides not reaching the Realtors® directly, the FSBO home seller also lacks in several other areas with this approach. First, the FSBO sign doesn't communicate what buyer's agent commission is being paid. The MLS clearly states this amount. Second, only the Realtors® that happen upon the FSBO sign will even get the message. Thousands of Realtors® belong to their local MLS. Third, the MLS protects the Realtor® by guaranteeing payment of the offered co-broke or buyer's agent commission. Without the MLS, there is no guarantee that if the Realtor® did sell that FSBO home that they would get paid the offered commission.
"FSBOs...If you are advertising on your yard sign "Brokers Welcome", then get that message out there to the Realtors® in masses, not just to a handful! List your home flat fee MLS...It is exactly the same thing you are doing now but with the following benefits:
- Every Realtor® in your county will see your flat fee MLS listing and what commission you are offering to them.
- Realtors® are guaranteed to be paid that commission if they find a buyer and are therefore more enthusiastic about showing your home.
- You save at least 3% over a traditional 6% real estate commission.
Get the best of both worlds, FSBO and MLSâ€¦And, list with the most trusted name in flat fee MLS...GetMoreOffers.com®.