Press Coverage

The pros and cons of FSBO


Despite the glut of homes on the market, falling prices in many areas, and competition from bargain-basement foreclosures, plenty of homeowners still want to sell their properties without a real estate agent.

For the intrepid and value-minded homeowner, selling a home without an agent has some distinct advantages: saving the typical 6 percent commission, no conflicts of interest, and more control over the process.

But going solo also can be time consuming and mentally challenging. Sellers must research the market, advertise and show the home, negotiate with buyers and learn the legal and financial details behind real estate transactions.

“The majority of people that use our services are independent-minded folks,” said Greg Healy, vice president of “A lot of these people want to sell the property on their own for the feeling of being successful … They’re going to know the best features of their property better than some agent who is going to some in and ask them a million questions.”

One of his successful clients was Jim Seidel, in Miramar, Fla. With skidding prices and slow sales, Seidel wanted to avoid paying the commission.

He noticed a neighbor was being foreclosed upon and the house was for sale. So he found out the price, and slashed his asking price on his Internet listing by about $100,000 to $355,000, and sold his home in just five weeks.

“Obviously we wanted to save money in commissions,” said Seidel, a clinical specialist for pacemakers. “We wanted to sell it right away, rather than wait, because we figured the prices would keep falling. We did a quick price comparison and we priced it fairly.”

Of course, real estate agents have their benefits. They have access to the Multiple Listing Service, which advertises homes for sale to other agents, and contain property details and sales transaction data. The agents pay for advertising and marketing costs, and can often devote more time to showing the property than an owner.

The ideal agent also has a more sophisticated knowledge of the local market and contract laws, and can provide negotiation and screening skills that are integral to securing a buyer. The ideal agent also knows how to prepare a home for sale.

“The value that a Realtor brings to the transaction is helping a buyer sort through all the information,” said Walter Molony, a spokesman for the National Association of Realtors. “Buyers want negotiation skills … If you don’t have an intermediary, you can be at a disadvantage.”

Last year, 12 percent of sellers skipped the real estate agent, down a peak of 18 percent in 1997, according to an NAR survey. Why? The complexity of real estate transactions has increased, as has the time it takes to market a property, according to the survey.

But spending that time may be worth it for some sellers.

A study last year by Stanford University analyzed housing transactions on its campus over 26 years. It found that using a broker did not significantly affect either the average initial asking price or the average selling price of a home in the sample – indicating that brokers did not “pay for themselves by obtaining prices high enough to offset their commissions.”

However, the Stanford campus study did show that using a broker did lead to a quicker sale, suggesting that brokers can add value to the entire process.

Seidel’s approach was unique, in that his father-in-law is a real estate agent and had access to the Multiple Listing Service. He paid a 1 percent commission to, which provided an online listing and connected him with a title company.

Seidel showed the house just one weekend, and in the end saved about $17,000 off the standard agent’s commission. He also learned a key lesson in sales – remove emotions from the process.

Like, other online listing services – such as and – have packages that are priced differently, based on services provided.

For example, has packages ranging from $89.95 to $899. Basic features include an online listing with color photos, and printable flyers. Packages also can include yard signs, a report with data on up to 20 recent sales in the area, and even an MLS listing.

After researching the Internet, sellers then should learn about pricing in their area, realizing the tried-but-true cliches that “All real estate is local.”

Access to the MLS would be great, but daily driving tours of the neighborhood also are useful because sellers can pinpoint homes with for sale signs on their lawns and question the owners on how much they are asking and how much interest their are getting.

Then, it’s time for a key step: Decide on a fair price based on your home’s size, age, appearance and location. Choosing a price that’s too high could limit the amount of buyer interest, while pricing it too low cuts into profits.

Next is preparing the home for buyer visits. Small fixes, such as changing old doorknobs or musty curtains, rearranging or removing furniture, and cleaning the garage can improve the appearance of a home. An inspector should be hired to check for any needed repairs. Attend other open houses to learn tricks in showing the home.

“We talk to people all the time who put their home on the market and they are just not ready, they have not prepped their home,” said Healy of “People are just turned off by that.”

Marketing comes next, with newspaper advertising, flyers, yard signs and Web sites such as providing several options in addition to the “for sale by owner” Internet sites. Healy recommends that sellers live in or near the property to quickly respond to potential buyers who want to visit.

When a buyer is found, a price is negotiated. Sellers can hire a lawyer to help with negotiation and legal matters, and either hire their own title company or get one through one of the Web sites. The title company and/or the real estate attorney can help sellers dot the i’s and cross the t’s on the paperwork, and close the deal.

Copyright 2008 Associated Press. All rights reserved.