For Sale By Owner
What is FSBO?
FSBO (pronounced FIZZ – BOW) which stands for “For Sale By Owner” is exactly what the abbreviation means. It is when a homeowner decides to sell his or her property without the use of a Broker. It is possible, but very tough, to negotiate the various aspects of selling real estate. It can be a very time consuming task to undertake. The author Michael Kloian claims that most sellers give up and hire someone to help sell the home after 30-45 days of trying to sell the property.
Why should I sell my own home?
If it is so difficult, then why do so many people try to sell their property on their own? Surely people have their reasons as to why they decide to sell their property, on their own, without any help from a real estate expert. The main reason is that real estate agent charges a percentage of the sale, usually 2.5%-3%, for the work that they have put into it. Since this is their full time job, they can put a full time effort into selling your property. You may want to note that the National Association of Realtors states that in 2018 a typical home sold by the homeowner was $200,000 and that of an agent-assisted sale was $265,500.1 That is an increase much greater than 2.5-3%, essentially showing that a real estate agent pays for his or herself.
Would a Realtor be better?
Yes, typically someone who does this professionally will be able to do a better job. That is not to say that it is impossible for a homeowner to successfully sell their home, but that they must understand they have a lot of knowledge and understanding about the market that they are missing, that a Real Estate agent has. A real estate agent will be marketing, networking, advertising, getting professional staging, photos of the home. Most importantly a real estate agent can negotiate the value of the home based on their market analysis, and work to get the top dollar for their efforts.
What do I need to know in order to sell on my own?
There are lots of details that might be missed or unknown to a seller. There are classes and online resources to help someone interested in selling their home on their own. The best advice to give is that google can be ones best friend for a difficult task like selling a home. If someone is interested in selling their home then it is important to know ahead of time and plan for the amount of money that you will be putting into this project. You will have to host open houses, schedule showings, work with real estate attorneys to get title insurance, read through contracts, and a host of other important things. This is why it can be so difficult to sell a home on your own.
If I choose to sell my home, why do I need an attorney as well?
If you decide to take on the daunting task of selling your own home one thing that can be infinitely valuable in making sure that the transaction happens smoothly is working with a real estate attorney. Essentially the buyer attorney has the most work cut out for him, that is not to say that the seller’s attorney has nothing to do. Your real estate attorney can look over the contract and talk you through it. They work with contracts for a living and know how to negotiate these contracts. They will help in drafting the initial contract for you as well as have useful advice on certain things you may want to look into doing with your property. Essentially a real estate attorney will be an invaluable asset to your team due to the extremely important and complicated nature of sale contracts. It can be valuable to talk with your real estate lawyer as offers come in. There are sometimes tax implications or other red flags that the real estate lawyer can point out for you as these offers come in. If there are any problems with the title the sellers real estate attorney is primarily responsible for helping to resolve these issues. A seller’s real estate attorney will help make sure any mechanic lien waiver is signed and proper, the real estate attorney will be extremely important in reviewing the settlement contract, the real estate lawyer will prepare a certificate of satisfaction, and represent the seller during the close. As mentioned before, a real estate lawyer is an invaluable part of your team and highly advised to contract one, even if you use a realtor.
1. National Association of Realtors https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics