I think you would be opening yourself up to a lawsuit as some of these duties an unsavy seller/buyer could say that you were acting as a real estate agent as there are disclosures to sign on both sides. I would contact an attorney or the real estate commission and get some help.

What is the difference between what you did and what a realtor does? Seems the same to me, other than access to the MLS.
What would you be marketing your services as?

Plus, it's only a 6% savings IF the buyers don't have an agent either.

This post was edited by greg_2010 on Wed, Nov 12, 14 at 16:00

If someone won't pay for a realtor to do those services, what makes you think they'll pay for you to do them? Free, sure, you'd have several people take advantage of that. Ask those folks that you helped to do all of that how much they'd pay for you to do it if they had to pay. If it's under 1K, it's not worth your time for all of the hassle of the insurance and everything else. And that's assuming that this could even be a legal business. I would bet that it wouldn't be, as it is too close to what a real estate agent does, but without the training and liability.

You need to determine if it is legal in your state to collect a fee for these services-especially the negotiating piece. In many states one cannot collect a fee for real estate services unless one is licensed.

I would never pay for these services and doubt many FSBOs would. If I am paying you I might as well pay a discount broker a few hundred dollars and have my listing in the MLS.

I agree that the legal aspect of this would probably end up making it pretty unprofitable for you, since I think you'd have to have some kind of insurance similar to a realty. Since FSBOs, myself included, do what they do to save money, I can't imagine why they'd pay someone to help them FSBO. There are bargain realties that guide one through the process with similar services to what you mention for a drastically reduced fee, so I don't think there's much of that market to tap.

However, have you thought about just becoming a realtor?

I'm interested to see what the lawyer says. It doesn't seem like you're really doing anything different than one of the low cost/ minimal service realties, so I'm thinking the same laws would apply, but it will fascinating to see what they say about it.

In Texas, you cannot perform the functions of a real estate practitioner for money unless you are a licensed real estate practitioner, or unless you're performing those services for only one entity, such as working as a builder rep.

& calling a payment a "donation" won't get around it.

I think you were in an unusual position in regards to these people. They knew you and you didn't charge. And, this is a pretty specific group of people. I don't think there's many people unwilling to use a realtor and unwilling to do things themselves AND willing to pay some money to a stranger.

Also, I think this sort of person as your main client base would end up making your life miserable. If they didn't already know you, you'd have to do a lot of selling of yourself and handholding and discussion and (IMHO) dickering about prices.

You might be better off pitching your photos and descriptions to actual realtors or realty agencies.

Erin-- unless I'm misunderstanding your idea, it sounds like you'd like to perform most all of the services if a realtor without actually getting a license. That's why I'm skeptical that it will be outside the laws governing actual agents. Your family friends did not sell their own homes, you did it for them.

Would you pay for these types of services?
Many people do. And you know what the people who perform these services are called? Realtors.

You basically want to be a realtor, but you want to charge less than the norm and somehow avoid any of the liability that drives up your costs.

I'd like to perform surgeries, but I don't want to go through the hassle of becoming a doctor and paying for insurance or anything. Could you ask your lawyer if that's possible while you are there asking about your thing? I'd like to avoid lawyers fees as well. Thanks. ;)

Erin, in this state there is a list of duties you could perform while unlicensed if under the supervision of a licensed agent.

â¢Provide information about the characteristics of a real estate listing or the terms of a transaction, as written and approved by a real estate licensee.
â¢Pick up or deliver documents and keys (basically act as a courier).
â¢Follow up on loan commitments and pick up or deliver loan documents after a contract has been negotiated.
â¢Write and place advertising.
â¢Gather market analysis information.
â¢Perform normal clerical duties such as typing, scheduling appointments, etc.
â¢Transport people to properties and surrounding areas of interest. While performing this duty, they may only provide answers that are on preprinted material prepared by a real estate licensee.
â¢Obtain any public information from government offices, utility companies, title companies, etc.
â¢Make keys, install boxes, and place signs on the property.
â¢Greet people at an open house, distribute preprinted media material, and help provide security.
â¢Submit forms and changes to a multiple listing association.
â¢Check on the progress of loans, credit reports, etc.
â¢Receive rent payments and compute commission checks.
â¢Record and deposit earnest money and security deposits.
â¢Order or perform repair or maintenance.
â¢Conduct telemarketing or phone canvassing to schedule appointments to seek clients, provided: â¦Compensation isnâÂÂt conditioned upon receipt of compensation by the licensee or firm.

Unlicensed, you may NOTâ¦
â¢Show properties, answer questions, or interpret information about the property, price, or condition.
â¢Interpret information about listings, titles, financing, contracts, closing, or other information relating to a transaction.
â¢Fill in legal forms or negotiate price or terms.
â¢Hold or disburse trust funds.
â¢Perform any act with the intent to circumvent, or which results in the circumvention of, real estate licensing laws.

In other words, you may not interact with a third party (buyer) on behalf of the seller. You were fine with taking the house photos, helping with the wording of the listing. You were not fine showing the house or doing any negotiating.

Thanks morz8-that's exactly what I am talking about. I am sure there are things I cannot legally do and there are things I could do. Things I can take off the plate of someone who is wanting to sell FSBO. So a conceirge to the FSBO seller, if you will. The things I cannot legally do, I will not do. I will report back what I learn!

Please keep in mind those are regulations for my own state, Washington. YMMV

Morz and erin -- am I reading correctly though that the first list of activities are only legal while under the supervision of a licensed agent? So a freelance consultant could not even legally perform those services?

You might simply try googling:
"what activities require a real estate license in (your state)"

I got Florida's to pop right up to the licensing agency's website of activities NOT requiring a license, but they are mostly the same thing as what morz8 posted - for an assistant working for a RE corporation or a licensed individual.

Example: you can help out at an open house for security and hand out brochures, but you cannot answer any questions that are not spelled out in whatever you are handing out

Another: you can schedule showings, for the agent you work for to show the property

The idea is that you can be an assistant doing administrative type things. The problem with unlicensed folks doing real estate is exactly why we have laws and licensing - too many problems in the past.

So if you remove the interaction with buyers from your list of services, you are just left with taking pictures, writing a description of the house, and advising a fair market value.

I think there would be a very slim market for people who would pay for that. And even if they were willing to pay for it, it wouldn't be much.

Well, people pay for all kinds of services, which they could very easily do themselves. One thing that comes to mind is college 9admission) counseling.
In a way, it would be similar to giving a seminar or writing a "book" on FSBO, or not, just as a consultant?
(And sorry, the analogy to surgeons doesn't quite work, unless you compare it to DIY "medical" treatments.)

'The problem with unlicensed folks doing real estate is exactly why we have laws and licensing - too many problems in the past.'

bingo.

erinb....be very careful here. Even writing descriptions on behalf of the owner can potentially get you in very hot water. If you write a description that violates fair housing laws it is a big deal or if you have a simple error in the description. Both things can end really bad. When I first investigated becoming a real estate agent I was in a very similar position as you, I quickly figured out that I did not want to accidentally get myself in hot water. You are helping many folks in an expensive financial decision, and one that most folks only do a few times in their lifetime. With that comes a lot of responsibility. If someone's feels wronged, they are much more likely to get it legally resolved because of the amount of money involved in the transaction.

Erin,

I thought of what you're describing years ago.

I used to be a realtor and hated how the RE industry rips people off because the entire agent, manager, broker thing is sooo layered and the lowly agents have to feed the top heavy RE entity. Nobody should pay 5-6% commission to sell a house. Unfortunately THAT commission has a lot of mouths to feed along the line.

I have sold my own homes many times way before I became an agent. I despise the red tape and the RE laws . It's all a big business. As a realtor you work very hard with very little pay left over.

So, as some of the posters stated, many states have laws that will not allow someone like yourself to cut all the BS and hang up a shingle. This is good and bad....

The only way I can see a way to circumvent this heavily lobbied RE industry is to work with a RE attorney, and call yourself a marketing consultant or something. Maybe under a lawyer's wing you can get away with it. You would BOTH benefit marketing your services TOGETHER! Let the ATTY handle the contract.

I'm not sure if you want to show properties because of the possible dangers, and theft by lookers. People will blame it on you...Also, be careful with not breaking the law when marketing a property. Remember it can sound discriminatory, even though that is not your intention.

I'd like to do something similar, but I don't
want any lawsuits. lol

BTW- all of you are ASSUMING that realtors do all those things. I would like to tell you that VERY FEW are really talented enough to negotiate, stage, and truly market your property. Many are successful because they know peeps, and NOT because they are any good. I worked with hundreds of them, and honestly I have met maybe only 1-2 that I would trust, or that they were savvy enough to do an A+ job. Just sayin..

I suppose since you got out of the business, then you are including yourself as one of those "hundreds"?

It's too bad that your experience as a Realtor was so unhappy, but you indicted a whole profession as incompetent, greedy, etc...
yet then you say you hate the red tape & the very laws that tell us what we have to do & what we cannot do.

I just don't see how you can have it both ways.

If you don't need the services of a real estate practitioner, then by all means
market your own property,
negotiate & execute your own contracts,
make sure that you've complied with all those hateful laws,
proof your own documents & figures,
& accept the liability & the legal expenses that you may incur if you've done any of it wrong,
or if the buyer thinks you've done it wrong,
or if the buyer discovers something about the house that you didn't know about.

but don't sling mud at a profession that's bound by law to do all those things for the benefit of our clients.

I'm thinking that even taking pictures and writing descriptions may be a risk if you do not have some sort of business insurance.
One of these days the angle of the picture, or the written description, is going to leave out something than ought to have been disclosed. If it is a deal breaker, when the shtf, both the buyer and the seller will be looking straight at you.

OK NC and SYLVIA,

IMO, you don't need a realtor to buy or sell a home. If your too busy or can't be bothered, the status quo RE is fine. A whopping 6% is a lot of money. Most of it goes to management and propaganda. I call those people pimps. LOL

I sympathize with realtors having to do ALL this work for very little money. The reason realtors have to do a lot of work is because the industry is a huge red tape, pay the management, take BS continuing ed, pay all kinds of fees, belong to many unnecessary entities. The competition is stiff. Too many realtors... I can go on.

There should be another option for others without the realtors BOYCOTTING the FSBOs. There should be a service like the OP suggested, to function sort of like an Accountant, independently. Sort of guide, consult; No frills, no layers of management, no expensive 6%...

Heck, even an A La Carte RE consult/assistance would be nice. Customers can pay per service.
Example: if a seller wants to do everything themselves but needs a good negotiator, they can hire a RE consultant and pay them lets say $100-$500 depending on complexity of the negotiation. If they need a showing- $50...etc.

As a RE consultant, you can get RE information updated just like the other professions and be FREE to hang up your own shingle, like a doctor, lawyer, accountant, nurse....and you would get paid for your service on the spot. If you don't feel comfortable with being independent then maybe some of the current RE industry can stay for people who need to be led.

However, IMO, the service would be much better, because as a consumer, you would save money, the RE consultants would get paid on the spot. You can pick and choose WHO you want to utilize for different parts of the sale/purchase, because NOBODY is good at everything, nobody. As a RE consultant you can even specialize in marketing, negotiating, showing. The top heavy RE industry needs to go bye bye. Trim the fat. It's time for a change.

Notto,
You say that most of an agent's commission goes towards management and propaganda... If that was true for you, then you were associated with the wrong company. My commission split to my office is less than 20%. And what are you speaking of in regards to "propaganda"?
Boycotting FSBOS? If a FSBO seller wants to pay me a fair commission, I'll show their home. Simple as that. Maybe you are mistaking the fact that we agents just do not know where the FSBOs are located, as our attempt at a boycott.
Your suggestion for an A La Carte system already exists if that is what a seller wishes. Plenty of those guys around.
And do you really think a buyer is going to pay $50 / showing? I showed a buyer 10 homes the other day...

As a part time agent, my goal is to help folks buy and sell the best possible. While I can understand some people feel 6% is an extremely high cost to pay for services and really that comes down to the firm and agent working for you. Everything is negotiable. Also, some items appear to be 'red tape' but there are some very important 'red tape' items in that list; extremely large amounts of money exchange hands in most home sales, education is very important. Most people buy and sell a home only a select few times in their life, it should be happy and fun experience verses a stressful and unknown process.

Quick example... as a seller on your own would you have the buyer sign a form stating they had the option to get the house inspection and chose not to? Even if the contingency section of the contract clearly stated they did not opt for a house inspection, did you get them to sign an addendum stating they had the option for the inspection but declined. Guess what, if you said no then you could be in for a bumpy and expensive ride. I am knowledgable on this very case and the judgments were in clear favor of the buyer; months after the sale the previous owner was still on the hook to pay for repairs all because the buyer claimed they did not know they had the option even-though the sale was not contingent; they stated the seller urged them not to get the inspection and they did not know they were allowed this contingency.

I am not saying every case goes like this but there are many good agents out there who are not looking to rake in the money, they just want to earn a living and do a good job at what they do. Doing a good job requires education, experience, and a solid firm.

Good for you that you get to keep 80%...but I'll bet that 99% of the time is off the 50% commission. I would get approx.1%- 1 1/4% off a 2.5%-3%, it being a full 5%-6% commission. Then there were ALL the bills...the NAR, the local, the websites, ....the cont ed....etc. THAT ate a lot of the money.

My point is that the consumer can get the best help while NOT paying a whopping 6%.

Ummm, yeah, the realtors BOYCOTT FSBOs. I doubt that my experiences were unique...An example: as a buyer wants to see a FSBO, the realtor tells them that the FSBO house is a bad house(unless they pay a commission)...low and behold as soon as the FSBO gives a listing to a realtor, the house becomes "a gem" lol

"And do you really think a buyer is going to pay $50 / showing? I showed a buyer 10 homes the other day..."

buyer, seller how ever you want to structure the system. But see? If you got paid $50/per showing you would have $500 in your pocket, and YOUR time would not have been wasted. Only serious people would ask to "have the doors opened for them".

The 2 things that many sellers need help with is showings and negotiations. The rest is paperwork and babysitting. Oh, the elderly may need online marketing help.

If I were to pay 6%, I would EXPECT the realtor to take over the sale of my house completely. That means, stage, clean, WORRY about getting the best price, and actually negotiate THE BEST price for me, and not their commission. For 6% I want to be in Tahiti having Margeritas, while the realtor has "my headache"...lol

so, notto, what are you doing now?
Does is make you happier than real estate did?

I live in PA and hired a lawyer to advise me on exactly what I can and can not do.

Here, you would be considered violating the law, practicing without a license.

notto- I get 80% of comm/broker 20%. No office fees. It doesn't surprise me that you weren't a successful agent, since you cant justify sellers/buyers paying commission. A good agent brings value to the table. I'd never expect a seller or buyer to hire me, if I couldn't justify the cost.

I don't like the real estate agent system in the U.S. Having lived abroad I found many of the foreign systems preferable. The systems that I like the most split the costs of real estate into two distinct charges, a flat fee for listing the property combined with a percentage fee to incentivize price maximization. Unfortunately, this means that really inexpensive properties can pay significantly more in real estate fees but more expensive properties pay less. I also find the illusion that the sellers pay all realtor fees (something absolutely not true) really annoying. I think the sellers and buyers should negotiate their commissions separately, with seller commissions paid from proceeds and buyer commissions rolled into the loan similar to financing costs.

Now while I may feel these are sensible solutions the fact remains that in most markets real estate agents are necessary. On the whole buyers see FSBO properties as more risky and therefor want a better deal. And on the whole, they are right. You can clearly see a correlation between realtors and higher prices in markets where realtor use is typical.

"You can clearly see a correlation between realtors and higher prices in markets where realtor use is typical."

Can you direct us to these studies?

Hey folks, let's let this thread die. It only popped back up to the top because the OP posted a link to his/her website where s/he is offering these "non-agent" services. The next post states his/her justification for these services as advised by a lawyer.

I reported the first new post to GW since it was blatant advertising, which is why it's gone and why the next post about the lawyer doesn't make any sense.

The bottom line is that it is illegal in most states to perform certain real estate services without a license. Those services are readily available online with a simple google search. I do know that there have been some convictions in my area recently of people performing these services without a license. So if you want to set up a business of performing all real estate services except those that require a license, you'd better check with a lawyer first.

I have assisted several people in selling, but only as a friendship thing. I am quite accomplished at buying/selling/renovating and landlording, so they always ask.

You cannot perform these services as a business in most jurisdictions without holding a real estate license. (I had one once but let it go- not worth the hassle if you don't want to actively sell, or at least it wasn't at that time).

Oops, sorry. Just saw previous post to let it go. I would remove this post, but cannot figure out if I can edit here.

You are opening up yourself for a lawsuit. you should not be helping buyers and sellers in a real estate transaction without a license. as far as saving the seller 6%- how do you know that? Had they used a realtor, who would have put it in the MLS, had open houses and promoted the property, it may have resulted in multiple offers, potentially bringing in a much higher sales price. in addition you are not covered by error and omissions insurance or liability insurance should issues arise after the sale. Just because a lawyer prepared the documents does not get you off the hook or hold you harmless.