For Sale By Owner (FSBO): Why and Why Not
If you’ve ever sold a home, it’s had to cross your mind as to whether you should hire a realtor or try to sell it yourself. I’m clearly biased, but I’ll try to represent the facts for both sides as best I can.
There are several advantages to doing a FSBO. The biggest factor that influences FSBOs is commissions. Though commissions are negotiable, they tend to be about 6% for the average home, with that being split between the buying and selling agent. If you avoid paying it, you have 6% of wiggle room in your selling price. When it comes to marketing, you have more affordable marketing options now than any time in history. The internet is rife with FSBO websites, including Craigslist, Trulia, Zillow, and ForSaleByOwner.com, as well as the traditional outlets such as newspaper classifieds and sign in your front yard. If you’re savy, you’ll also offer a buyer’s agent commission to help influence a real estate agent to help sell your home for you.
There are quite a few more reasons not to go the FSBO route. First, a fact: less than 10% of homes that are offered by owners actually sell. The reasons for this are many, but it’s primarily because a large segment of buyers are first time home buyers and will likely have an agent representing them. That means at best you can expect to pay 3% or more in commissions to gain access to them. Most agents are also members of a local board of realtors, so they tend to buy and sell properties for each other knowing they will be dealt with honestly and promptly. Think of it like buying a car: how many times have you bought one from someone’s front yard? Or more appropriately, how many times have you sold a car to someone other than a dealer? If you’re like me, never and never. Then there’s marketing your home. All local listing services (MLS) are syndicated and propogate sales information to countless websites. The majority of home buyers now start their searches on the internet, so unless you’re everywhere they are, you’re missing out. Do you have the time or expertise to post your home all over the web? Probably not. Finally, home sale negotiations can be emotional. If you can’t separate yourself emotionally from you’re home, you’ll probably fail. Whose not emotional about their home, the place you may have raised your children or spent countless hours and dollars upgrading to your liking? Maybe the most important reason is that agent-assisted real estate transactions sell for more than FSBOs. Not a little more, a lot more. Regardless of what source you believe, it’s higher than the 6% commission you stand to pay agents.
My friend Todd and Lane recently sold their home successfully as a FSBO. Todd swore it was one of the biggest mistakes he’s ever made, and HE ACTUALLY SUCCEEDED!! There are arguments to be made for both sides and I wouldn’t blame you for trying to sell your home FSBO. But as a Realtor, I’m also happy to sell it if you can’t.