Have you ever been frustrated as a home buyer or seller to the point you believe you can represent yourself? Or believe that by doing it yourself you could save a commission therefore enhancing your monetary position in a transaction? We call those who do this FSBOs, or “fizzzzbows,” meaning for sale by owners. There is no industry name for buyers, but we have comments regarding them that teeters on crazy!

In my years of being an owner, manager and senior level broker, I can tell you that each time I have encountered a FSBO or buyer with limited understanding attempting to represent themselves, their reasons are that they feel a real estate agent does nothing or has very little to offer for their compensation. And in most cases these self-appointed consumers believe they are educated enough to save the commission and “do it themselves.”

Let me explain something that has been a myth and misunderstanding for years. A real estate agent who has mastered their craft will not be eliminated by the Internet or by cut-rate companies with business models that undermine the fundamentals of our licensed professionals.

Real estate is a people business, and computers cannot transact without human intervention, therefore computers are only tools to information. Most who believe they are saving money end up in the long term paying more or costing themselves by unexpected turmoil or missed terms and conditions that could have saved them agony and aggravation.

Not all, but many who determine self-representation has value, have little respect for a real estate agent. Many have no idea what they do. Yet, the real estate agent has more to offer and deserves a better understanding of their service. Remember that price is not always the value in a transaction, and the contractual detailed terms and conditions sometimes have more benefits than expected. We do not merely fill in the blanks; we investigate the facts and assume the liability for the party we represent, which has far more implication than consumers understand.

I have asked those who do this why they assume their own risk in representation. And most believe that through their research on the Internet they have accomplished whatever the value of the licensee is. But the identification of a property for a buyer is only the beginning.

In most cases an agent eliminates, sorts and identifies a series of properties with the consumer’s criteria. This can take days, months and sometimes years. Buyers generally do not purchase the first property they see, therefore creating many hours of search and knowledge of the market to keep the buyer informed.

Once the buyer has identified a property, a real estate agent’s work is just beginning. From market comparisons to quantifying if the value is acceptable, the real estate agent is responsible for educating the buyer on the market and of their investment. Additionally, there are legal contracts and California mandatory disclosures that although they appear simple can create a magnitude of difficulty in preparation and liability. And liability or risk is far more expensive than commission. It only takes one missed disclosure to destroy any illusion of savings.

I have one legal suit that comes to mind that — without disclosing specific names and addresses — that the seller who was representing themselves would have gladly converted to a broker’s representation. For the alleged savings of $15,000 dollars, the sellers were so frustrated with the buyers’ request for simple repairs that after being in escrow for over a month, and being too close to the transaction, they attempted to cancel escrow.

They had no intermediate with whom to discuss their issues. Had they been properly represented they would have been counseled on their issues and probably eliminated the frustration and following suit. By the time they were completed with their attorney fees and damages for breach of contract, the sellers who represented themselves were liable for more than $30,000 dollars.

This is only one example.

There are hundreds of these stories.

An important fact to remember: Real estate agents work for free until the transaction

See VIEW, page C46