The For-Sale-By-Owner Who Saved $10,000 and Lost $35,000

Today is story time. This is not fiction. This is not a made-up scenario. This is a true story from a real transaction, and hopefully, we can all take something away from it.

One of the agents on our team was helping a buyer locate a home. They found one that was being sold for sale by owner. We got permission from the seller to show the property, and in this case, the seller was actually present during the showing.

That’s not always the best thing for either party. Not because anyone is trying to keep secrets, but because you lose your negotiating advantage when you start saying things out loud in front of the other side. And that’s exactly what happened. Our buyer walked through the home and couldn’t contain themselves. “I love this home. This is awesome. I would pay this price all day long.”

As agents, that makes us cringe. You’ve just given away the shop. Our job as the buyer’s representative is to get the best value we possibly can. That kind of enthusiasm, expressed in front of the seller, takes cards right off the table.

The ethical dilemma. Here’s where it gets interesting. Our agent, being ethical, which is something we really strive to instill across our team, became uncomfortable that the seller had no representation. This was a for-sale-by-owner situation. Two sisters are selling the home together. No agent on their side.

Our agent came to me and said, “Listen, I’m a little uncomfortable. I know we represent the buyer, but I feel bad about this seller. I think you should give them a call.”

I agreed. I would have loved to represent them as the seller. And in that case, my agent and I would have actually been competing against each other, each working for our own client’s best interest.

The phone call. I called one of the sisters. She was very receptive. She was starting to realize that this was one of the largest transactions she’d ever been involved in and that she was out of her element. She said, “You know what, I think it might be a good idea to have you represent us. Give us a day to think about it.”

Next day, I called back. She was still very receptive. We got maybe a couple of sentences into the conversation when there was a commotion on the line. The phone was being grabbed out of her hand.

It was the brother.

He got on the line and said, “Hey, this is their brother. I want you to know that I know everything there is to know about selling a home. There’s no way we need to pay an agent. We’re going to save the commission. I can do all of this myself.”

I wasn’t going to argue with him. I wasn’t going to be rude. I said, “Hey, that’s fantastic. I actually agree with you. You absolutely can sell your own home. You can sell anything you want to sell without representation. The issue isn’t whether you can. It’s what the results are actually going to be.”

What we did next. I told our agent the situation. The brother was in charge. They weren’t going to hire us. So I said, “We do our job. We do what the law says. We represent our client to the absolute best of our abilities.”

Our agent said, “But our buyer already told them exactly what they’d pay. Right in front of them.”

I said, “It doesn’t matter. Let’s craft the offer.”

We asked for the sun and the moon and the stars. We lowered the price. We extended the due diligence period. We lowered the earnest money. Every single term in that contract, we positioned to give our buyer every possible advantage. Whatever we could ask for, we asked for.

Our agent said, “There’s no way they accept this.”

They accepted it.

He almost fell out of his chair. He came running in and said, “They took the offer.” I said, “Yeah. That’s why we do what we do.”

The math that tells the whole story. Let’s flash forward to closing. Everything went through. The buyer was thrilled. And the brother was at the closing table, bragging about what a wonderful job he’d done. “See? I told you we could sell this home without an agent.”

We didn’t dispute it. Why would we? We congratulated them and wished them well.

But here’s the moral of the story. Did he save the commission? Yes. He saved roughly $10,000. What did it cost him? We calculated that it cost him and his sisters approximately $35,000. Their sales price could have been that much higher with proper representation, proper negotiation, and someone on their side who does this every day.

So he saved $10,000 and lost $35,000. That’s a $25,000 difference. And the worst part is, the sisters will probably never find out. I hope they don’t, because they won’t be on speaking terms at Christmas.

Why this matters for every seller. I know real estate agents get a bad rap. People think we all fly private jets and live on islands and just show up at closing to collect a check. If that were true, every single person in the world would be a real estate agent. They’re not. Because this work is difficult, and doing it well takes years of experience.

Think about it from a practical standpoint. Can you imagine someone walking into your job and saying, “I know everything there is to know about what you do. In fact, I can do it better, and I’ll do it for free.” You’d think they were out of their mind. It’s no different in our profession.

There’s a saying: anyone who represents himself as his own attorney in a court of law has a fool for a lawyer. Would a doctor do surgery on themselves? Of course not. The same principle applies to real estate. We get good at what we do, and we’d love to share that expertise with you.

If you’re thinking about selling and you want to make sure you’re getting the full value of your home, not just part of it, reach out. Text me at (706) 540-0336. Say, “Hey Mark, I saw your video. I’d love to talk.” We’ll go from there. You can also email me at m.mahaffey@markmahaffey.com or visit blog.markmahaffey.com. We’d love to hear from you.