For Sale By Owner or FSBO is a word that has been increasing in popularity among the real estate community. In the past, the only way you could sell your home was through a real estate professional, such as a broker, realtor, or other real estate professional. However, with a real estate agent costing a hefty portion of the sale price, more and more people are thinking of putting in the time and work to sell the house themselves. This article will talk about what FSBO stands for, its pros and cons, and if it’s right for you.
What is FSBO?
For Sale By Owner is a term that means someone is selling their home without using a real estate professional. There is nothing in the US that requires you to use a real estate agent when you buy or sell your home. However, some states require that a real estate attorney read the contract and that one be at the closing table when all the paperwork is signed. Because of this, many people have started turning to this method and that number has been increasing in recent years. For many people, a FSBO sale means they put up a yard registry, post a few listings online, and then do all the showings until someone finally buys their home. However, this route can include other things like selling your home at auction, selling it directly to an investor, or even something as unusual as a home exchange.
Why and why not use FSBO?
Savings are the main reason people often decide to sell themselves. Most real estate agents keep between 5 and 8% of the total sale price of the house. If you sell your house for $100,000, and even using the 5% fee, you’ll be paying $5,000 to the real estate agent alone in the form of commissions. This is a large amount of money that could be used for something like travel, college, paying other bills, or even adding to your savings. Sometimes sellers think that the best person to market their home to is the person who knows it best, which is themselves. Most good agents will usually juggle at least a dozen listings at the same time, so the agent may not be able to devote the time and attention to your sale to get your home sold quickly.
The biggest downside to selling your home is that it takes a lot of work to get it done. Although not required, it makes the process of selling a house much more user-friendly. They have all the contacts you need for the various professionals you need involved in selling a home, plus they will usually do all the showings. If you don’t have an agent, you’ll need to read up on all state and local laws to make sure you’re doing the right thing, and you’ll also need to study what marketing is working right now. You’ll need to list the house yourself, and you’ll need to speak directly with buyers when it comes time to show and negotiate.
Who Should Use FSBOs?
If you have a full-time job and other full-time commitments, then FSBO is probably not the right path for you. If you’re going through a major life change, the extra work of a FSBO can only add to the stress. If you are selling a home that is extremely unique or would generate a smaller audience of buyers, having a real estate professional help you find the right buyers.
On the other hand, if you have the time and are willing to put in the work, you can save thousands of dollars in the home sale process.
