What is a FSBO?
FSBO is an acronym representing “For Sale by Owner” and provides an additional option for property owners. The premise is for the sales process to be controlled by the property owner instead of relying on a real estate agent. Homeowners are welcome to apply to marketing services but retain control over their home and listing throughout the process.
While property owners can choose to market themselves, it’s also possible to use a listing company (for a flat fee) or hire an agent on an hourly rate (no commission). A real estate agent selling a home at an hourly rate, however, is far less common
While real estate agents remain a “go-to” option for sellers, the FSBO (for sale by owner) market continues to intrigue. Property owners are beginning to recognize the intricacies of this option and how it works. Selling your home without a real estate agent isn’t for the faint of heart.
Fred Franks, a real estate agent from Central Florida states, “I am finding more FSBO’s for my customers that are looking for homes in Ocala FL.” This indicates the market’s diversity and willingness to adapt to change. When real estate turns to a seller’s market, you typically see more people trying to sell on their own.
However, does this mean property owners are prepared for what a FSBO entails? Several reports indicated mistakes are being made with regards to FSBOs. When you don’t have a real estate expert in your corner, it is easy to understand why.
It is important for homeowners to understand the pros and cons of selling without a Realtor before diving head first into such an important endeavor.
Benefits of Going For Sale By Owner
1) Reduced Fees
The main advantage is the elimination of commission fees. Most real estate agents will charge anywhere from 4-7 percent for selling a listing, and that can be expensive. This is particularly the case for those who don’t have a lot of equity and need funds for their next purchase.
Property owners use the FSBO route to eliminate these financial concerns and take the fees for themselves.
The reduction in fees also provides greater leeway in how the sale is made. There is greater room to negotiate, and the property owner can sell at a lower price while still taking home a good amount of money with their sale.
It’s a perspective shared by many property owners.
2) Greater Control
The control afforded with a FSBO is hard to ignore because each component of the process is in the owner’s hands.
The same doesn’t apply to a real estate agent who might have a conventional approach to how they market a house. While the hands-off approach of hiring a real estate agent is enticing, the FSBO route provides a plethora of additional options that do add intrigue.
It’s important to recognize these benefits before making a decision one way or the other. Those who are ready to jump into the for sale by owner path will know it’s time to consider what needs to be done.
If you are the type of person that needs hands-on control make sure you do your research first on how to go about marketing and selling for sale by owner.
Things to Consider with a FSBO
Understanding how to sell a house for sale by owner is essential before putting your feet into the frying pan. Following some tips from those who have done, it can be helpful, along with any advice you can pick up from a local real estate agent.
See these additional for sale by owner tips as well:
1) Inspections Are Important
According to Home Inspector Mark Barone of Southland Home Inspection Services, “It’s important to have your home inspected even while working with a FSBO. Most buyers forget that without an agent working with them.” This signals the significance of a home inspection and the value it adds to the selling process.
Ignoring this step can lead to considerable issues in the long-term and might even cause legal concerns. Please take the time to have an accredited home inspector come in and assess the property beforehand. This will help alleviate any underlying issues that might have been missed.
A pre-sale home inspection can be an important cog in making a buyer feel secure about the home they are purchasing. As a seller you can also feel confident, you won’t have problems that are going to cause your sale to fall apart at some point down the line.
2) Legal Expertise
A real estate lawyer is required to complete the transaction and ensure the sale goes through smoothly.
Ignoring the importance of this step can lead to legal trouble down the road. With a FSBO it becomes doubly important to find a good solicitor as any issues with the process can be stemmed immediately. The real estate lawyer will have invaluable experience when it pertains to this process and will help manage it.
Those who try to save a few bucks by not having a lawyer in their corner can find themselves needlessly in a wrong spot.
3) Writing Seasoned Listing Ad
How is the listing ad? Where is it going to be posted?
With a FSBO, it becomes necessary to recognize the value of a listing advertisement in bringing buyers in. If the word isn’t getting out, an excellent property can go without a single viewing. Take the time to work on building a robust marketing plan whether it’s through free resources or a listing company.
This is a significant step in the right direction and has to be focused on before a decision is made. Besides having great photography, your ad copy will play a major role in how buyer’s think about your property. You never want to leave out details that could entice customers to purchase your place.
For example, here are some features that buyers could be specifically looking for:
- An In-law suite or potential to have one.
- A three car garage.
- A luxury kitchen explained in depth – the kitchen is the most important room in the house.
- A swimming pool – some buyers will be specifically looking for one.
- An exceptional lot of landscaping.
- Unusual or extravagant features that set your home apart from others.
4) Detailed Photography
This ties in with the listing ad because photos are the biggest factor for creating positive first impressions.
The eye won’t get drawn in when your pictures are mediocre. Do not take them with a decade-old camera and make sure to spend time on this process. It’s the only way to help manage how the property appears as people do base their decisions off of the photos. Remember in most circumstances buyers will make their decision on looking based on what they see online.
Detailed photography can do wonders with a FSBO.
5) Know the Selling Market
What is the going rate for properties such as yours? Is the market doing well in the region? What is the absorption rate? What are the average days on the market? How close to the asking price are homes selling?
Consider all of these details and make sure your property fits in. If not, you won’t get a single viewing and buyers will continue to move away from the property. This is critical with a for sale by owner because you are the one who is going to make this assessment and put up the listing.
6) Build Accessible Information Sheets
Yes, these information sheets should be detailed and easily accessible. The property owner is responsible for this sheet and should be creating one as soon as possible. If potential buyers are entering the property for a viewing, it’s important to have this sheet available.
It will help shed light on the subject matter and is going to ensure they have something to read while making their decision.
Selling your home without an agent has become a path for property owners, but it continues to be mismanaged. Please take the time to recognize better what needs to be done before making a decision one way or the other.
A FSBO has considerable potential when done right and can alleviate some of the financial pressures associated with an agent. While real estate agents continue to remain a viable option for property owners, a FSBO can retain value when this information is kept in mind.
Sell with confidence and ensure the right changes are made to optimize your listing. Keep in mind that selling without a real estate agent is not easy. You may find that it is far more challenging than you imagined. Keep an open dialog with a few top notch local real estate agents in case your plans change quickly.
You may find yourself in need of going the old fashion route of listing with an exceptional Realtor.
Other Important Home Buying & Selling References
- What is dual agency in real estate via Storify.
- How does bad credit affect my home purchase via Joe Boylan.
- Are flat fee real estate brokers worth it via Debbie Drummond.
- More advice on going FSBO via Paul Sian.
Use these additional references to make sound decisions when buying or selling a home. Above all else keep yourself educated on the real estate market whether you sell without an agent or not.