For Sale By Owner. A Licensed Real Estate Agent Might Be Better?

The “For Sale By Owner” (FSBO) Challenge: Practical Advice for Agents
I. What is a FSBO?

For Sale by Owner sign
A For Sale By Owner can have negatives a seller might not think of.

A for-sale-by-owner transaction happens when a seller offers his or her property for sale without the assistance of a licensed real estate agent or broker. Usually this is because the seller wants to avoid paying a commission on the sale, but it also means that he or she has to assume all responsibility for completing the transaction without seeking the services of a professional with a real estate license.

II. Understanding the pros and cons

The Pros: Because a licensed agent is not involved in the marketing and selling of the property, sellers reap the financial benefit of retaining the percentage of the sale that would have otherwise been paid to a brokerage. In addition, many sellers enjoy the freedom of handling and marketing the transaction themselves, without the need for interviewing and choosing a licensed agent and brokerage with whom they can feel secure.

The Cons: Without a licensed agent, sellers must become real estate savvy. Pricing a home appropriately requires research and market analysis. An overpriced home can take months longer to sell than expected. An underpriced home devalues neighboring homes and, of course, leaves the seller financially short. And there are several reasons why agents are required to get a real estate license, including understanding the legal and financial risks, and how to best protect the seller through contract negotiation. This alone could be worth hiring a licensed professional.

In addition, agents are businesspeople who thrive on clientele – which means they have close relationships with potential buyers and know their desires in the real estate market. This advantage, along with custom advertising and marketing, can create the exposure needed to sell quickly and for the right price.

III. Approaching a FSBO seller:

For a new agent who has recently received his or her real estate license, FSBOs may seem like the ideal place to start drumming up business. However, be cautious in your approach. Typically, newly licensed agents are so eager to convince sellers to list that they unwittingly wind up using scare tactics: flashing intimidating documents, focusing on financial risks, and warning of the dangers of letting strangers into their home. It’s important to remember that while you may truly be more clever and knowledgeable, it isn’t professional to make a seller feel less so – your job is to empower, not intimidate. Granted, holding a real estate license does make you the expert, but being a straight shooter will garner more trust. FSBO sellers are smart, and they know why you came knocking on their door. They’ll see through intimidation attempts, and you don’t want to be “just another salesperson” in their eyes.

IV. How to be a professional

1. Be straight. Give an honest evaluation of the seller’s FSBO situation, be genuine in your offer to help, and provide authentic resources. Don’t just tell them what you think they need to hear.
2. Be eager, but not overeager. Don’t overwhelm FSBO owners in your effort to convert them. Persuade, don’t coerce.
3. Be flexible. A professional understands when the old adage “always be closing” isn’t appropriate. Sometimes it’s necessary (and professional) to take no for an answer.

Background checks for the WV real estate license are here

*Edit- we have an updated article on this content now that this is old news. Here's a current article on how to navigate Identogos site along with a video walk-through.

Like it or not, we have another step when we want to get through the application process to get our West Virginia real estate license. If there weren’t enough hoops to jump through to apply to test for your WV real estate exam, you can add one more.

Why do they want a background check now?

My thoughts on why they are requiring a background check is because historically, there a lot of applicants with not so serious charges that happened a long time ago. It was a lot for the commission to weigh without any sort of real facts of what these charges were. A lot of people had DUI’s from 15 years ago, etc. This allows the WVREC to be able to let people go through the system more quickly. I don’t know exactly what standards the commission holds on these results. My guess is this is supposed to actually help people who have previous charges get through the application system more easily. The commission doesn’t have to spend months looking into it on their own.

Where are the official forms?

The physical form that you need is located here: WV Real Estate License Application Background Check Form AND you will need to make an appointment with a company called Indentogo by calling 855-766-7746 or using their website: https://Identogo.com to register an appointment. The commission isn’t allowing any more real estate license applicants to test unless a background check is completed beforehand.

Criminal History Background Investigation
Background checks from Identogo are now mandatory

In order to get these checks underway:

1) Make an appointment with Indentogo by calling 855-766-7746 or using their website: Identego.com

2) Complete this form: WV Real Estate License Application Background Check Form and take it with you to your appointment

If you have any questions you can call the WVREC at 304-558-3555 (the WVREC are responsible for the requirement). You can also call Spruce at 304-744-1286. (*note- we are still learning what all this entails, just like you. We will try our best to answer your questions)

 

Taking the WV Real Estate Exam

Okay, I’ll be honest. A week ago today, I was standing over my sink with a pint of ice cream and a spoon, prattling on to my best friend about how there was no way I could be a real estate agent. I mean, all the best salespeople are smart and witty and charismatic and funny, and I’m rarely any of the above. (Unless I’m forgetting my keys on the cafeteria conveyer belt again and chasing down the kitchen attendants to explain why I need to rifle through people’s leftovers. Then I’m really funny).

But I do have a point, and this is it: the most important thing I discovered during my experience with Spruce School’s West Virginia online real estate class is that there’s nothing more empowering than being armed with the skill and knowledge that turns doubt into experience – which is why I felt compelled to write this article. Because despite my chronic forgetfulness and occasional episodes of self-deprecation, I am, indeed, a newly minted West Virginia real estate salesperson. And I’m off to a great start with a supportive broker and an encouraging team of coworkers.

So, backstory aside, whether you are considering taking online real estate classes or in-class sessions, I feel the most helpful thing I can address first is the one thing all students are most curious about: the West Virginia real estate exam. Held in Charleston every month, the exam covers four areas of real estate: Principles and Practices, Law, Appraisal, and Finance. You’ll have three hours to take the exam, which is 200 questions long.

But fear not – both online and in-class students will have taken all four sections during the preliminary final exam required to complete the course, and everyone has the opportunity to take Wade Caskey’s one-day review covering all four topics (optional, but I give two enthusiastic thumbs up for this session. It was lively and entertaining, and most importantly, covered a whopping 675 review questions to challenge our knowledge). The review I attended lasted until about 4:00pm.

Now, on exam day, there are a few things you should know:

1. DO locate the restrooms right away. You and pretty much everyone else will probably feel like you are about to throw up at some point. It’s an exam. You’ll be nervous. It’s normal.

2. DO NOT forget your coffee at the hotel like I did. If it weren’t for all the one-way streets, I’d have turned around. (Hey, a girl’s gotta have priorities).

3. If your exam is held at the Civic Center, DO banter with the parking garage attendants. Those guys made my morning. And a good-natured chuckle can make a person feel a lot lighter.

Okay, now for the really important stuff:

  • You will be required to bring a $25.00 exam fee and a photo ID. The fee (cash or check) is collected during the exam, so it’s helpful to have everything ready as soon as you sit down.
  • You should bring a calculator and a few number two pencils. You can bring your study guides and personal items with you, as long as you keep them under the desk and out of sight during the exam.
  • Arrive early. My experience at the Charleston Civic Center was seamless – parking was plentiful in the adjacent garage, and the room location was easy to find. However, there was a large event taking place at the Civic Center at the same time, and the traffic began to back up shortly after I arrived at 8:30am. This may not be the case for you, but better safe than sorry.

I can honestly say of all the exam experiences I’ve ever had, this one was the most organized and least painful. Just study hard, pay attention to the correspondence you receive in the mail from the West Virginia Real Estate Commission (especially the one with your seating assignment – you’ll actually need to bring it with you), and try to get plenty of sleep. If you knew me, this is like the pot calling the kettle black, but I do know that every little bit helps. And rest assured, if you’ve made it this far you’ve already got what it takes. Good luck and go get ‘em. You’re going to do great.

Buyer Misconceptions

Home for sale
Buyers often don’t know the seller is paying the commission.

A frequent misunderstanding I see all the time, even from people who have bought homes in the past and were simply in an information overload coma of sorts, simply don’t recall when they go to buy a house from an agent with a West Virginia real estate license 10 years later, or possibly never really understood the process is “Who is paying for this real estate agent?”… The answer is very likely, NOT you. When dealing with an agent with a West Virginia real estate license the buyer is really getting great services for free.

Question: I want to buy a house. How do I get a good rate when finding an agent with a real estate license?

Answer: If you are the buyer you don’t deal with paying for any of it!!! So fret not, your ride is most likely free.

The Buyer Doesn’t Pay

The buyer doesn’t pay ANY commission to an agent with a West Virginia real estate license. The SELLER pays for this service. Read more about this highly overlooked fact:

Overlooked facts when a buyer deals with an agent with a real estate license:

There’s a LOT of confusion on who is paying for what when dealing with a real estate agent. Let’s start by simply saying

the SELLER almost always is paying for the services of a real estate brokerage NOT THE BUYER Click to Tweet

How can this be? Why is this, you might ask? Well, stripped to the bare basics, the seller is using the real estate brokerage and their network of the agents with a real estate license as advertising for their property. Advertising costs money. Good advertising gets your home sold. So the SELLER pays a commission to the varying real estate brokerages for advertising their home and getting it sold. The buyer has nothing to do with this advertising cost. The buyer is just looking for a home and has enough coming out of their pocket, right? They’re shelling out the cash for a house! So let’s just let the seller deal with the bill for the licensed real estate agent, since the seller is the one actually getting a service. That’s hopefully VERY GOOD ADVERTISING through a network of agents and brokerage companies introducing the sellers property to thousands of potential buyers. Kind of beats a “for sale by owner” sign in the yard and yes, it’s costly to the SELLER for that fact. Go ahead and price good advertising some time and you will see it isn’t cheap. Also realize that a buyer wouldn’t need advertising. A buyer is simply looking for a property. So when they find one why would they pay for “the sellers advertising” . The obvious answer is they wouldn’t. You don’t pay NBC when you buy a pair of Nike shoes. You pay Nike for your shoes and Nike pays NBC for their glamorous ads. Start to make sense? BUYERS DON’T PAY A REAL ESTATE AGENT’S COMMISSION. BUYERS BUY A HOME 🙂 So if you’re looking for a home, don’t get all weirded out thinking you are going to have to pay some huge commission for finding a home with an agent holding a real estate license. Go on out there and look at some homes and don’t worry about your buyer agent’s commission. Chances are you’re not paying a single cent for it. The seller is most always paying the commissions and for good reason!