A Road Less Travelled: The FSBO RouteYour
Daily Tip List offers some pointers on what to consider when planning to sell your property on your own.
Home prices across Odenton and Gambrills are definitely depressed. Many sellers cringe at the thought of shelling out commissions to agents and opt to sell the home themselves. If the buyer is without an agent too, there's a lot of savings to be made.
Is it a good idea to sell the property yourself? The answer to that question depends on who you ask. Buyer agents, worried about having to negotiate commissions, might not favor For Sale By Owner (FSBO) listings, even though it is their fiduciary responsibility to do so. Sellers, on the other hand, are often enamored enough by the extra dollars at the end of the process and seem willing to try it.
This week the Daily Tip Sheet focuses on going down the For Sale By Owner route.
Here is our compiled list of factors to consider when planning an FSBO:
It's doable: It's just anecdotal evidence, but there are fewer FSBO signs in Odenton today. But contrary to what you might think of that, FSBOs (pronounced Fizz-bos by people in the know) might be the underreported real estate trend of 2010. More people seem to be listing their homes FSBO, according to Joanne Cleaver, senior content producer for the Tribune-owned ForSaleByOwner.com. States Cleaver, "In a year of declining sales, ForSaleByOwner.com has seen double-digit growth in listings and revenue. As home equity continues to erode, many sellers realize that the sell-side agent commission will siphon off their remaining equity."
It's all about the money: First the good news. FSBOs make better economic sense. The usual 3% commission on a $350,000 could potentially take $21,000 out of a seller's equity. An FSBO cuts down that value by at least a half.
The bad news is that you'll have to shell out money for advertising and marketing your property. Some of these costs could be upfront–for listing your property on various sites, printing flyers, getting your home photographed and staged professionally. If you went the traditional sale route, some of these activities would have been handled by your listing agent for free.
The agent commissions are paid after you sell, a crucial factor to consider. It really boils down to this: smaller upfronts and bigger learning curve, vs. a large post-sale commission biting into your equity.
Reading up helps: You're a homeowner, so you've done the real estate jig once already. Read up on real estate terms, go over your old contracts and appraisals, re-acquaint yourself with the whole process. It's also time to pore over real estate laws for your state or sign up for real estate classes.
Selling your home FSBO adds another layer of complexity to the already complicated selling process. Rosemary Taylor, an area real estate agent with Zip Realty, cautions, "If the buyer is also unrepresented, the situation could easily turn into one big nightmare."
Can you see a spade for a spade? Sellers and buyers alike need some objectivity when it comes to the decision making process, states Taylor. That's the vital ingredient an agent brings to the table. The real estate agent, who has also attempted to sell her own properties FSBO in the past, says, "It's very hard for people to take criticism of their properties from buyers. Even I, a real estate agent, had a hard time accepting criticism." Often the inability to see problems or make easy fixes to properties might prevent a crucial sale. Having an agent gives you an additional set of eyes. It was for reasons like these that Taylor opted to get an agent for her personal sales.
Prepare for work: Selling a home is hard work. Selling it FSBO is even more so. There's advertising and marketing to take care of. Homes can be listed on multiple listing sites (MLS) or on realtor.com for a fee. There's videos, photography, repairs, open houses to take care of. There's a lot of paperwork to go over.
If you're hard pressed for time and energy, selling FSBO might not be the right choice for you.
You're the boss: Selling sans agent is like freelancing for a living. It's all about choices. And it's also not for everyone.
Among the choices you'll have to make: Whether and when to hold open houses, where to list your property, how much to list it for. If the home doesn't sell, you decide whether to take it off the market or reduce the sale price. You're working in your own interest, minus the seller-agent drama.
An Odenton homeowner who had listed her property as FSBO two months back said she found the agents she spoke with less informed than herself, and in a hurry to sell her home for a loss (her property didn't sell and is off the market; she refused to give her name just in case she wants to use an agent in the future).
For some people, too much choice is a surefire disaster. The time and effort involved in going FSBO might be a big deterrent. It's really upto you to decide whether the savings offset the work involved.