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What is FSBO?

FSBO means For Sale By Owner is a real estate term that indicates property currently for sale (or previously sold) without the assistance of a real estate agent or a REALTOR. It can also refer to the seller of such property.

Why sell real estate as FSBO?

Home sellers are motivated to sell their property on their own because real estate agents typically charge 4-6% of the final sales price. That's a fee of $12,000 on a $200,000 home! It's easy to see how it would make sense to spend some time and money marketing one's own home if the potential savings are more than $10,000.

  1. You can advertise your home where and how you want to.
  2. You know your own home better than any real estate agent.
  3. You can sell your house faster. This is because you're able to offer a better price than if you used a real estate agent.

Why buy FSBO?

Done correctly and carefully, buying a home directly from the owner can be very favorable. This type of transaction has two major advantages:

  1. It saves you money. The 4-6% commission that real estate agents normally charge will often be added to the total cost of the property. Consequently, you will be able to find a better deal if you buy FSBO.
  2. It saves you time. You skip the third party (the real estate agent) and deal directly with the homeowner. The communication is likely to be more direct, faster, and to the point when you're buying FSBO.

Statistics

From the 2004 National Association of Realtors Profile of Homebuyers and Sellers:

  1. 30% of homeowners attempt to sell without an agent, two-thirds are successful
  2. 24% of FSBOs stated that "getting the price right" was the most difficult part of selling their home.

Ideas for a Successful FSBO

  1. Determine the fair market value of your home. Spend some money if you need to getting a list of comparable sales in your area. A kind real estate agent might provide a list for free. (They do it for buyers and friends routinely.) Listing your property too high will cause you to waste valuable time and get discouraged. Listing it too low might get it sold, but you'll leave money on the table.
  2. Make sure to tell everyone you know (your sphere of influence) that you are selling your house. One third of FSBO sales go to a prior acquaintance of the seller. Do this AFTER determining the fair market value of your home. At the very least you might try this approach for a month or so prior to listing with an Agent, especially if you are undecided.
  3. Advertise your home. Any real estate agent worth their salt will spend money to sell your home in newspapers, publications, websites, on the MLS/IDX etc. An agent takes 6%. If you're saving that money, spend some on advertising. Don't rely on just a yard sign.
  4. Investigate getting a flat fee listing with an agent on your local MLS. This means you pay them a flat fee ($250-$500) to put you on the MLS or IDX and you do the rest of the work. At this point you will end up dealing with other buyers' agents. Be ready.
  5. Be prepared to negotiate with a buyer's agent. Possibly plan on offering them some commission. Make sure you know the value of your home and plan on possibly tense negotiation.
  6. Know the details:
    1. Details about your home (sq footage / lot sizes / restrictive covenants)
    2. Understand contracts, offers, acceptance etc. Possibly consult an attorney.
    3. Get all offers and counter offers in writing
    4. Make your prospective buyer get pre-qualified within a week so that you don't lose valuable time finding out they can't finance the deal.

viaFSBO.com will help you find the best FSBO services available on the market, whether you're are buying or selling a home this way.