When homeowners go to sell their house, they either hire a Realtor, or attempt a For Sale By Owner (FSBO), or what we call in the biz, a Fizzbo. Some might wonder why a homeowner would attempt a sale on their own, and the reasons vary. Some have had bad experiences with Realtors, while for others it’s a strictly financial decision.
So, what’s the best route for you? Only you can determine that. Let’s examine the pros and cons of attempting a FSBO.
Advantages of a FSBO
1) SAVE MONEY—The primary advantage in selling your house on your own is that you will save money by not having to fork out a 6% commission.
A home sale can be quite costly on its own with escrow and closing costs, repairs, and price concessions all adding up. Subtracting another 6% from the sale price can really feel like you’re chipping away at the profit margin.
2) RETAIN CONTROL—When you are the primary point person in the sale, you call the shots. There’s no middle-person communicating on your behalf, which some people appreciate more than others. If you’re the type of person who prefers to be in the thick of it during negotiations, disagreements, and heated disputes, selling a home on your own certainly gives you that level of control.
Disdvantages of a FSBO
1) LACK OF EXPOSURE—Your FSBO will not appear on the local MLS (Multiple Listing Service), which is where EVERY agent in the community is browsing for inventory to show their Buyers. Yes, you can advertise your home on Zillow and several other websites that accept FSBOs, which will get some eyeballs on it, but it won’t go on Realtor.com (where only licensed Realtors are allowed to post) and all of its syndicated affiliates.
Even if Realtors do see your listing, many won’t work with FSBOs, and won’t show their property unless a client insists. Why is that? Because there are so many Sellers who ARE willing to hire Realtors to represent them, that it rarely makes sense to chase down a Seller who isn’t willing to hire a professional. (Of course, there are exceptions. Some agents view FSBOs as a primary source of leads).
2) LIABILITY—There are so many disclosures, forms, and contracts involved in a typical sale these days, even professional Realtors struggle to keep track of them all. I would never attempt to represent myself in a court case, I prefer not to do my own taxes, and I’m not going to diagnose and treat my own illness. That’s what lawyers, accountants, and doctors are for.
Sometimes, it’s best to hire a professional. When working with a Realtor, the brokerage typically holds liability in the event of a transgression. Regardless of the real estate industry’s dubious reputation, most Realtors are truly looking out for the best interest of their clients. When you’re dealing with something as important as selling property, it’s essential to be properly represented.
3) LIMITED PROSPECTS—Many FSBOs are seeking Principles only, which means they don’t even want to deal with a Buyer’s agent. Even if a Seller is confident enough to take on his or her own sale, the pool of Buyer’s who want to handle THEIR own end as well is going to be miniscule.
Selling a house can be a long, complex, confusing, and expensive process. With some experience, and a little chutzpah, a Seller can certainly do it on his/her own. However, Sellers should weigh the advantages and disadvantages before attempting a FSBO, to make sure it’s the best course of action for their situation.
Photo Copyright: feverpitched via 123RF Stock Photo.
Nikolas Allen is a Realtor® with J. Harris & Associates Real Estate in Mt. Shasta, California. He helps people through the complex process of buying and selling their homes. His first listing was a former FSBO.