To FSBO or not to FSBO? That is the Question
So you need to sell but you don’t have the equity to cover a 6% real estate commission, or you WON’T pay a commission. For many home owners, the choice may be Short Sale with an agent or FSBO. In any event keep in mind a few important nuances of selling without an agent, “FSBO”, for sale by owner:
1. many buyers expect you to discount a FSBO home since they know you are saving 6%! They won’t consider the deal a win-win unless you sell to them for under 97% of market value . . . .share the 6% 50-50.
2. There are helpful agents who will sell on a discount listing basis, e.g., a flat fee listing in the Multiple Listing Service. This can substantially expand your advertising market. So don’t rule out all agents.
3. Even if you FSBO your property, be aware that you can substantially increase the traffic to see your home if you make it clear in all of your advertising and on your For Sale Sign that you will pay a 3% commission to any agent who brings a successful and qualified Buyer. Many FSBO’s sell without paying a penny in commissions, but my experience is that most that sell in under 3 months do so with at least 3% to a “selling agent” to draw more traffic.
4. Consider advertising and writing on your For Sale sign: “By Appointment Only” so that you have time to make sure that you can be there when potential buyers show up. If you have a vulnerable spouse or young children, a pre-set appointment is crucial for screening potentials for: (a) loan pre-qualification; (b) a chance to google the potential and see if you can find some intel on them before you invite them into your house; and (c) making an opportunity to show your house as safely as possible for your family.
5. Consider deadlines for your FSBO. e.g., if you do not have great traffic or interest in the home within 2 weeks, step up the listing to a discount listing for a month. If that doesn’t generate traffic, then consider upgrading the listing to a full service listing. Know that most listings do have a negotiable duration. Many real estate agents demand 90 day listings or longer. So shop before you list for an agent that will accept a shorter listing period but make sure it is not so short as to make the agent less likely to invest advertising money into the service.
6. Be prepared for kooks to knock on your door.
7. Be prepared for agents to solicit your listing.
Among the best articles I’ve seen on agent strategies for convincing you to give up your FSBO quest and list with them, check out this article entitle “How to Talk a Seller off the FSBO Ledge”. Although the article is written to realtors, it definitely raises some valid concerns for homeowners to consider such as the ones above. So if you are committed to saving 3 to 6% of your equity, read and consider these concerns carefully and use them to help you prepare for the effort and planning required to sell your home FSBO.
But also keep in mind that a good and experienced real estate attorney can also be an invaluable resource for a successful FSBO adventure as well. We are like a Farmer’s Insurance agent, we’ve know a thing or two because we’ve seen a thing or two . . . and instead of a flat 3 to 6% to help you sell your home, we often render FSBO assistance for a small flat fee or even at an hourly rate that will rarely, if ever, reach the 3% mark!