FSBO Sales

You’ve lived in your home for a long time. You know it the absolute best. So why would you hire someone else to sell it when the time comes to downsize your home? Why not sell it FSBO (For Sale by Owner)?

Selling your home FSBO is a legitimate sales strategy. Especially in a seller’s market when properties are selling quickly and there is pent up demand. Most people’s main reason for selling FSBO is to save on commissions, but there can be other good reasons to make this choice as well.

Sellers who sell FSBO usually advertise with a “For Sale by Owner” sign in the yard with their phone number on it. They might also advertise online (Facebook Marketplace, Craigslist, Nextdoor, etc). You could even consider advertising your home in your local newspaper, although that is much less common these days than it was in the past.

You can also hire a flat-fee agent to put your house on the MLS (Multiple Listing Service). Putting your house on the MLS gets it more exposure. The flat-fee MLS companies will charge you to place your house on the MLS and may offer some additional a la carte services. You can opt not to get any additional services so you can manage the process yourself yet benefit from the exposure the MLS can bring you.

So, what are the benefits of selling FSBO?

• You know the house best and will be able to fully represent all its features.
• There may be some commission savings, although you might have to pay an attorney and/or a buyer’s agent.
• You have more control over the process.
• You might get to meet the buyer earlier in the process, which can be kind of fun, if they’re nice ;)

What are the disadvantages of selling FSBO?

• Buyer Financing - Many buyers who target FSBOs will make you think that they are qualified buyers but they aren’t. You may feel excited about them purchasing your home and unfairly keep your house “off the market” while you wait “just 1 more week” for them to get their financing in order.
• Pricing - What you might feel your house is worth might not be actual market value. Pricing your house incorrectly can cost you time and money. Agents study the market and can help you get the pricing right.
• Marketing Time - I have watched many FSBOs list their home in peak season only to find they didn’t get enough exposure and didn’t find a buyer. Now peak season has ended, they need to sell ASAP, and they end up having to list at a time of the selling season where values are lower.
• Negotiation - Real estate agents study and practice negotiation. The good ones are able to emotionally separate themselves from the outcome and fight for their clients. Most non-agents might not even feel comfortable negotiating for ½ price at a garage sale, let alone for the sale of their home. Don’t lose money because of lack of negotiating confidence.
• Paperwork - You might not know all the disclosures you are required to fill out in order to market your home. Also, do you know what to look out for when it comes to protecting YOUR interests during an offer situation?
• Emotional Involvement - Real estate agents can provide a valuable buffer between their clients and the process. Buying and selling real estate can get very emotional, especially for sellers who have owned their home for a long time and have many attachments to it.
• Legal Risk - Do you know how to market in order to not discriminate against any protected classes? How do you properly disclose defects and challenges with your house? Don’t “save commissions” now only to find yourself in an expensive lawsuit later.

If you don’t believe me yet that hiring an agent might be a better fit, let me tell you a personal story that might help.

Before I became a real estate agent, I owned 2 former primary residences that I had kept as rentals for a few years. The real estate market was heating up, and my husband and I decided to sell both properties. One of the properties was about to be vacated by the tenant. At the other property, the tenant was interested in purchasing.

We hired our trusted agent to help us list and market the vacant property. We received several offers within days of listing it. The process from negotiation to inspection to closing went super smoothly. I don’t remember there being a single hiccup.

For the house we sold to our tenant, we hired an attorney to represent us for a flat fee. Neither party, buyer nor seller, was working with an attorney. Because we were “saving on commissions,” we gave the buyer a bit of a discount on the price of the house. Without any agents involved, we as the sellers made several mistakes during the process that made the financing approval on the buyer’s side more difficult than it needed to be. Because we didn’t know enough about the process and the protocols (even though we had worked with an agent almost simultaneously to sell another property), there were a few points during which we thought the transaction might not go to closing because of our mistakes. The process of selling FSBO was 10 times more stressful than the process of working with an agent and our lack of knowledge of the process ended up costing us some money in the end.

What’s the moral of the story? Do your homework prior to making the decision about how you’d like to sell your home. FSBO can work but it’s not always rainbows and sunshine. Working with an agent may be a better fit. Take the time to consider all strategies available to you for the process. And don’t forget to include Jess Lex Homes on your “Must Interview” list!