What You Need to Know Before You Go FSBO
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What You Need to Know Before You Go FSBO
Selling your home means making dozens (if not hundreds) of decisions, starting with whether to work with a real estate agent. While the vast majority of homeowners hire a listing agent, others brave the world of FSBO – for sale by owner.
Many sellers venture down the FSBO path, confident they can manage the many aspects of listing and selling on their own. If you’re not careful, though, selling your home without an agent can become a full-time job. Here are a few pros and cons to consider before you make your decision.
Commissions
Pros: The most common reason to FSBO is to avoid paying commissions, which are fees paid to agents based on the final selling price of the home. Commissions average between 4-6 percent of the home’s purchase price and are usually paid by the seller from the proceeds of the sale. Typically, the buyer and seller have their own agents, with the commission split between the two.
If you choose to list FSBO, you can plan to pocket what would have gone to a commission or set a lower asking price to appeal to more buyers.
Cons: It’s worth noting that some buyers’ agents may choose not to show your home to their clients, reducing the pool of buyers who see your place. Or those agents may insist that FSBO sellers compensate them with a commission if they deliver a buyer.
Pros: You have complete control over your listing price, and researching the comps that go into making that decision. You’ll need to put emotion aside, looking at your home as an asset and honestly evaluating how it stacks up with the competition.
You’ll also be the one negotiating a contract with buyers or their agent, so think long and hard about where your bottom line is, how much you’re willing to give and if you’re up for the challenge.
Cons: Because you are in complete control of price, there is a risk that you may not be pricing it correctly. Agents have the expertise to study other homes in the area and have a good sense of where to list your home. One thing you’ll want to avoid is pricing too high, only to cut the price later if there’s not much buyer interest in it.
Buyer interaction
Pros: You have control over scheduling open housings and individual showings. You don’t have to worry about fitting in with the schedule of a busy agent who has other clients.
Cons: You will be the sole point of contact for potential buyers, and you’ll need to determine which buyers are serious. You don’t want to waste your valuable time showing your home lookie loos who have no intention of buying. You’ll also want to ensure the buyer is qualified to actually purchase your home.
Local knowledge
Pros: You know your home and neighborhood best. Sharing that knowledge can be a huge selling point with buyers.
Cons: Good real estate agents have expertise on homes, neighborhoods and cities, making them invaluable in selecting the best comps to determine the right price for your home and how to market it. They know what appeals to buyers in a specific marketplace. They also have access to the MLS, a multiple listings service used by agents to share listings information. Zillow’s for-sale home listings include feeds from MLS around the country.
There isn’t really a “pro” for FSBO here. Buying a home requires a lot of paperwork, and we’re guessing that you don’t often read legalese for fun. If you sell FSBO, you are responsible for making sure all of the paperwork is read, understood and accurate. If you’re not working with an agent, you should consider hiring a real estate attorney. Every state has its own requirements for real estate transactions, so if you go FSBO, make sure to do your research.
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