For Sale By Owner (FSBO), is it right for you?
Trying to decide how to sell your house? Before you jump into doing a For Sale By Owner (FSBO) I recommend you do a little homework so that you realize exactly what you are getting yourself into. I have recently been in the market for a new home myself and made an offer on another soldier’s home. When I made the initial offer via email, I got a very angry, nasty response stating that I had insulted him and wasted his time.
The problem was the same problem I had encountered when I
tried to sell my house FSBO a few years ago.
The seller had no experience doing a FSBO and did not really know what
to expect. That is why I am
including this page on my site; to help explain what to expect and to list my
lessons learned that might help make the process easier for you.
Luckily, in the scenario I mentioned above, we were both
professional enough to continue communicating and after I had shared with him
my experience of doing a FSBO, and explained that I had experienced the same
frustration, we both were able to continue dealing with each other and reach a
Please understand that I am NOT a licensed realtor, and
that this information is based purely on my own personal experiences.
Before deciding on FSBO I highly recommend you consult at least two
references: a book designed to
explain the process completely, and someone who has completed a FSBO before.
With that said, I hope the following information helps:
1. Initial Actions.
I consulted at least 5 realtors when I was trying to decide on how to
sell my house. I told each one of
them that I had not ruled out doing a FSBO and that I wanted to hear what they
had to say about the advantages/disadvantages of doing a FSBO versus using
them as a realtor. Their
responses were all very similar:
· Ease. It is much easier dealing with a realtor since most of the work and expertise are provided for you.
· Sale Price. Realtors have the experience, knowledge, and access to information (comparables) to fairly easily determine sale price.
· Advertising. Realtors already have a network (MLS) and are familiar with this process) (I must note that the lack of options for military to advertise was one of my motivations for this site).
· Negotiating. The realtor will act as your representative and therefore should know your bottom line and can then negotiate for you. As I stated in the introduction to this page, for most soldier’s this is the worst part of buying and selling a house.
· Assist with the closing. Realtors are once again the subject matter expert and can take care of a lot of things that the seller will have to otherwise (i.e. inspections, completing paperwork, etc…).
Remember I am neither a realtor nor an expert at doing FSBO’s.
This list was simply the result of trying to remember the process.
2. Deciding to do FSBO.
Obviously, the major advantage of doing a FSBO is to save money.
Most realtors charge 6% of the sell price, which on a $100K house is
$6,000 dollars. That’s a lot of
money to soldiers! BUT BEWARE,
you are taking on a major task. It takes time to sell a house, and usually we all have around
6 months from the time we receive an RFO and that may not be a lot of time.
I think it would be easier to list actions involved in a FSBO rather
than explaining them. Once again, remember this is off the top of my head and may
not be an all inclusive list (if you know I have missed something please email
me using the link below and I will make the correction/addition):
· Sale Price. I used the amounts the realtors gave me to determine a start point. Then as incentive to buyers, I listed a little bit lower because buyers realize there is already a savings incurred since I am selling the house FSBO.
· Advertising. This was a problem. Locally, TV, newspapers, and the Post Housing office were really all I could find (again, motivation for this site). Since then however, I have realized it helps to list at other posts, school houses (Basic training/courses, advanced courses, etc…), and of course pcsrealty.com.
· Time. Preparing the house to sell will happen regardless, but now you will be the one taking calls, setting up showings, giving/allowing walk thru’s, setting up inspections, arranging the close, etc…
· Feelings. This might sound crazy at first but believe me, if you do a FSBO you will experience a range of emotions! For instance, being insulted by a low offer, hearing comments about the way you have decorated your house, etc… You CANNOT allow yourself to take these things personally. After all, the buyer is trying to save as much as you are trying to make.
· Negotiating. In accordance with dealing with feelings, you need to have an understanding of what to expect when you finally receive an offer. Negotiating is an art, and you need to do your homework to understand the true value of your house and realize when a good offer is presented. Remember don’t take it personally!
· Developing the contract. This is very important that you understand this process. Once again, I had a bad experience taking another soldier at his word, and did not have our “understanding” put into the contract and as a result cost myself about $3,000 dollars. You also have to find the lawyer to draw up the contract, set up the time, and make it happen. This is often difficult for us because the buyer is usually located in another state. The contract can of course be sent through the mail, fax, or email, signed and returned, but be sure to read it carefully! Once again, educate yourself on this process as well so you know what to expect.
Closing. I have not closed
on a FSBO as a seller so I am not exactly sure about the process, but when I
bought my first home from a FSBO, my local lender set up the close through a
local law firm.
· It takes time. I recommend selecting a realtor after you interview at least 5 and tell them you are going to attempt a FSBO till a certain date, then get some help. My experience tells me it could still take some time after signing with a realtor.
· Be patient, kind, and courteous. Be thick skinned and be prepared to get your feelings hurt. Don’t take it personally and always be professional.
· Your dream home is not necessarily someone else’s dream home.
· Be realistic about profit. You can’t expect to make $20,000 if you have only owned your home 2 years.
· It is not an easy process. It may sound like a simple process, but it is not always.
· All in all it’s probably worth it because it saves you money. But don’t be surprised if your hair turns gray during the process. Just kidding, only you can decide if FSBO is right for you.
· Don’t be afraid to try it for a while you can always change your mind and go with a realtor, who knows-you might get lucky?