For Sale By Owner or FSBO is a word that has been floating in increasing popularity among the real estate community. In the past, the only way you could sell your home was by using a real estate professional, such as a broker, real estate agent, or other real estate professional. However, with a real estate agent costing a significant portion of the sale price, more and more people are thinking about spending time and work selling the home themselves. This article will talk about what FSBO stands for, its advantages and disadvantages, and if it is right for you.
What is FSBO?
For Sale By Owner is a term that means that someone is selling their home without resorting to a real estate professional. In the US, there is nothing that requires a real estate agent to use when buying or selling your home. However, some states require a real estate attorney to read the contract and have one at the closing table when all paperwork is signed. Because of this, many people have started to resort to this method and that number has been increasing in recent years. For many people, an FSBO sale means they put up a sign in the yard, post a few listings online, and then do all the displays themselves until someone finally buys their home. However, this route can include other things like selling your home at auction, selling it directly to an investor, or even something as unusual as a home exchange.
Why, and why not, use FSBO?
Savings are the main reason people decide to sell for themselves. Most real estate agents take 5-8% of the total price the home is sold for. If you sell your house for $ 100,000, and even using the 5% fee, you will pay $ 5,000 only to the real estate agent in the form of commissions. This is a large amount of money that could be used for something like a trip, college, paying other bills, or even adding to your savings. Sellers sometimes think that the best person to market their home is the person who knows it best, which is themselves. Most good agents will typically juggle at least a dozen listings at a time, so the agent may not be able to devote the time and attention to your sale to get your home sold quickly.
The biggest downside to selling your home is that it takes a lot of work to do it. Although not required, it makes the home sale process much easier to use. They have all the contacts that are needed for the various professionals you need involved with a home sale, plus they will generally do all the showings. If you don’t have an agent, you will have to read up on all the state and local laws to make sure you are proceeding in the best way, and you will also have to study what type of marketing is working at the moment. You will have to list the home yourself and speak directly to buyers when it comes time for screenings and negotiations.
Who should use FSBO?
If you have a full-time job and other full-time commitments, then FSBO is probably not the route for you. If you’re going through a major life change, the extra work of an FSBO can only lead to more stress. If you are selling a home that is extremely unique or would generate a smaller audience of buyers, having a real estate professional will help you find the right buyers.
On the other hand, if you have the time and are willing to work, you can save thousands of dollars in the home sale process.