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When deciding on a strategy for selling their home, one will often consider the option of selling it on their own. Selling For Sale By Owner, or FSBO, is not a bad idea as a home seller could potentially save thousands of dollars in agency commissions. But then again, they might not. There’s a risk-to-reward threshold that a home owner must completely understand, and be ok with, before going onto a non-multi-list website hoping to market your property. If a seller knows what you’re doing and does it right, they could save money and potential legal issues.
Firstly, if saving money is a seller’s primary motivation, keep in mind that most home buyers are represented by an agent. In rare cases, the buyer might be willing to pay that agent for their work, but again, it’s rare, and it’s not even allowed for VA loans. In most cases, you should presume that a buyer will make you an offer with their agent’s one-party commission agreement to have you pay the broker a commission even though they’re representing the purchaser. There are exceptions but with the standard listing agent commission at 6%, let’s say an $18,000 charge for a $300,000 home, even a $9,000 savings isn’t anything to scoff at.
But for that potential $9000 savings, what seller services does the listing agent provide that the seller will have to do by themselves instead, and what are the risks? At minimum, a FSBO will need to:
I won’t spend too much time on this next point because this blog post is getting too long as it is. But every prospective home seller should keep in mind that many websites who promote the idea of selling FSBO do so because they have a triple-dip business model. Their goal is to either charge sellers to post their home on the website or charge them for “legal forms” for sale on their website, wait for the sellers to get frustrated with the lack of momentum on the FSBO listing because their website isn’t connected to the MLS, and when the seller gives up, the website encourages them to use one of their agents who not only pays them for “leads” but also likely pays the website a 25-40% referral fee on a commission they charge the homeowner after all. This triple-dip business model makes a sucker out of naïve homeowners and the poor agents who can’t operate their business by referral, and have to resort to paying for internet leads.
But this is about selling your home by yourself the right way. If time is not an issue, going FSBO is a great idea. A home seller doesn’t have to worry about pushing out the listing to a maximum number of potential buyers as quickly as possible as an agent has an obligation to. Follow my 27-point list, do your homework and with a little luck, you’ll probably be just fine. Or call a good, reputable, solid, honest, caring agent who has the experience to do this for you. Yes, you’d end up paying them, but no one works for free nor should they. In all likelihood, you’ll end up paying more as a FSBO anyway.
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