For Sale by Owner or FSBO are attractive in a seller’s market. Weekly solicitations from eager Buyers are common. Technology has put selling your home yourself a few clicks away. Websites like Zillow allow you to post a listing. Pinterest and Google can give you pointers on how to stage your home. A brochure may be easily made using a word processor (or get a technologically savvy friend to do it).
There are upsides to FSBO and downsides, just as there are upsides and downsides of using a real estate agent. When homeowners hire a real estate agent to sell their home, the buyer’s and seller’s agent make a combined commission that can run up to 5-6% of your home’s sales price. This entire commission is paid out of the sales proceeds. This means that if your home sells for $300,000, the commission will be upwards of $18,000. Not wanting to pay that commission is one of the primary reasons people choose to sell their homes themselves. FSBO homes can sell quicker than agent-assisted homes. On the other hand, FSBO often sell for lower prices than an agent-assisted sale. This is likely due to the real estate agent’s expertise and in-depth knowledge of the real estate market.
One of the most common concerns with FSBO, is the Seller is responsible for making all the required disclosures and negotiating the documents involved in closing the sale. It is easy to get lost trying to navigate it all and miss something. That mistake could be costly down the road, and may even result in litigation. Reducing the seller’s exposure is the bailiwick of the listing agent. An attorney is essential for those without an agent. An attorney will draft and review documents before the Seller signs them and will make sure the i’s are dotted and t’s are crossed. An attorney will typically charge hourly for his or her time, not as a percentage of the home’s sales price. Attorney fees will also be significantly less than the commission an agent will charge, as the number of hours to represent a seller in a home sale do not exponentially increase as the price of the house increases.
The decision to hire (or not hire) a real estate agent is personal, depending on your own comfort level, confidence in your abilities, and time you’re willing to commit. If you do choose to go the FSBO route, however, you are encouraged to confer with an experienced real estate attorney.
