Selling Your Home: The FSBO Method
Selling your home can seem like a daunting task, especially when you’re a first-time seller. The goal, of course, is to maximize your profit. Most areas across America are currently experiencing a seller’s market, which means there are fewer homes for sale and sellers are able to command higher prices for their homes. If you’re a seller, your timing is excellent. And, you may want to consider selling your home using the For Sale by Owner (FSBO) method.
“FSBO” is a general term used to describe the process of selling property without the services of a real estate agent. To avoid any confusion, FSBO.com is also the name of a company that offers this type of real estate service online. But here, we explain a few different ways to utilize the general FSBO method of selling a home.
First, you’ll want to understand how FSBO can be a lucrative financial move. If you hire a real estate agent or a realtor to list and market your home, that individual typically receives a 5-6 percent commission for their services once the home has sold. If you decide to go the FSBO route, the listing fee typically doesn’t apply because an agent or realtor isn’t involved.
There can be obvious financial benefits when using the FSBO method. However, the absence of a realtor or real estate agent means that pricing, marketing, negotiating, paperwork and everything else involved in selling a home are the responsibility of the seller. Not surprisingly, realtors generally have way more experience in those areas than the average homeowner.
So should you go the FSBO route or the traditional route? Right now you may be thinking that FSBO sounds like a not-so-great opportunity to spend large amounts of time figuring out paperwork only to muck it up. But there is another option: Sellers have the option of utilizing a hybrid method; there is a way to go the FSBO route with the help of a real estate professional.
Here are some options to consider:
As a seller, you can offer to take on all the marketing and listing duties yourself and then negotiate with a realtor or real estate agent to pay them a lower commission, like 2 or 3 percent, to bring buyers to you. In these hybrid cases, the real estate professional will usually deal with details concerning the buyer’s lender, inspections, etc. Think of it this way: The realtor will handle the buyer’s side of things (for less commission) and you will be responsible for everything else.
Another alternative is to find an agent or realtor that offers the “flat rate realty” method. In these situations, the sellers are still utilizing the FSBO method, but agree to pay a one-time fee to a realtor or agent that includes help with small details like professional photos and a “For Sale” sign. The seller can also list their property for sale on websites like MLS.com, a website that offers multiple listing service listings.
When it comes to buyers, you may be wondering if there are pros and cons to buying a home from a FSBO seller. Opinions from real estate professionals can vary, but typically a buyer can also benefit when purchasing a FSBO property. Buyers want to get the most for their money and a FSBO home is attractive because buyers assume that the realtor’s commission has not been tacked on to the sale price.
Remember to keep in mind that using the hybrid approach has the potential to help you maximize your profit when selling your home. Paying a real estate pro part of a commission fee or an inexpensive flat rate to help you sell your house is not a bad deal, especially for first-timers not yet fluent in the sometimes complicated world of real estate.