For Sale by Owner, or FSBO, is a method for selling your own home that can save you money as long as you know how to use it properly. Understanding all the details of how FSBO works will help you decide if it is right for you. This guide's helpful resources will steer you through the process of making an FSBO sale.
What is For Sale By Owner?
Of course every home sale will always include the owner, but FSBO refers to a very specific type of sale where the homeowner handles the sales process without the aid of a real estate agent. In 89% of real estate transactions, a homeowner will use an agent or broker to market the property and handle the paperwork. When you choose to go with the FSBO method, you are responsible for many things, including:
- Determining an accurate home value, gathering photos and other marketing information, and paying to list the house on real estate websites.
- Responding to all buyers' offers in a timely manner.
- Disclosing any potential issues, such as lead paint.
- Scheduling showings and appointments for potential buyers.
- Preparing all legal documents, like the bill of sale document.
- Meeting with inspectors, contractors, agents and other professionals during the inspection period.
The Pros of FSBO
The most common denominator of taking on the task of selling your own home is the interest in saving a significant amount of money on commissions. Usually, sellers pay a percentage of the final sale price to the agent who helps them sell the house. Commissions are typically 6% with the seller paying from the proceeds of the sale of the home. Three percent goes to the sellers agent and three percent to the buyers agent. On a $500,000 home your looking at potential savings of $30,000 by doing everything yourself. However, keep in mind that purchasers may be represented by an agent who will expect a 3% commission. As well, taking the lead in selling your property gives you more control. Control over pricing, marketing and scheduling of showings.
The Cons of FSBO
The downside of FSBO is that you are solely responsible for doing everything yourself. Granted, sites such as FSBO.com and Foresalebyowner.com will guide you through the process, but the work still falls in your lap. This can open you up to legal problems or delay your sale. You also don't receive advice from a real estate expert so you may miss out on ways to make more money from the sale.
Resources for Homeowners Interested in FSBO
To succeed at FSBO, you need to be fully informed on local home values, listing websites, and more. Here are some resources to get you started.
The Multiple Listing Service: The MLS is the tool most real estate agents use to share listings with each other. You can pay a flat fee through sites such as forsalebyowner.com, which is around $300 to $500 that will include placement on various sites as well as the MLS.
Realtor.com, Zillow, and Trulia: These are popular real estate websites people use to look at listings online. Signing up for an owner profile will let you provide details on the house and update contact information.
Eppraisal: Use this service to figure out how much your home is actually worth. Knowing about home values lets you list it at a reasonable price.
Canva and Snap Flyers: Use these services to edit your images and format them for flyers or online listings.
HGTV: For tips on updating your home, check out this popular DIY website.