The Advantages of Selling by Owner When Selling Your Home
When spring is in the air, it not only means that summer is just around the corner, but that the real estate market is about to pick up and a large number of houses will be bought and sold in the coming months. The first question that often arises when someone starts thinking about selling their home is whether to use a real estate agent or try to sell it by owner. In this article, we’ll discuss selling by owner and whether it’s the right choice for your owner’s situation.
What does FSBO mean?
A For Sale By Owner sale is any type of sale where the owner will handle the process themselves. The house is not being handled by any type of real estate professional during the sale process. In the US it is not required to have a real estate agent during the home sale process, however some states require a real estate attorney to be involved to make sure everything is done legally.
The FSBO route can be done through a variety of methods. Most homeowners in the US use the traditional selling by owner process where they mimic an agent’s process but become the agent for their own home. However, that is not the only method. FSBO sellers can sell their home during a home sale auction, trade the home with another owner, or sell it directly to an investor.
The advantages of FSBO
The most attractive advantage of FSBO is the savings on a real estate commission fee. When they work with a real estate professional, they typically charge 5 to 8 percent of a home purchase at closing. This can be quite a significant amount for many homeowners. For example, if your home sold for $300,000 with a real estate agent, that would mean you would give up $15,000 with a real estate agent at the conservative 5 percent. That’s thousands of dollars, even tens of thousands for many homeowners, deducted from the proceeds of selling a home that could be used for vacations, college funds, and retirement savings. So why use a real estate agent if you don’t have to?
The Disadvantages of FSBO
The reasons most people choose to sell through an agent is because the home selling process can be very complicated, time consuming and tedious. If you are selling privately, you will be responsible for listing, marketing, showings, negotiations, and closing yourself. A buyer may ask you questions about the home or the home sales process to which you are not sure the answer.
Those wishing to sell this way must spend the time and effort to become familiar with the real estate process and be willing to do whatever it takes to sell their home. Sellers who can’t commit on time can have a home that sits on the market for months before the owner caves and turns to a real estate agent. So if you have a full-time job or business, a large family or a full life, or are going through a major life change, it will be difficult to sell your home on your own, not impossible, just difficult.
What FSBO does not mean
Just because you’re selling your home on your own doesn’t mean you have to do every step of the process on your own. There is more to the real estate world than just buyers, sellers, and agents. For a flat fee, a real estate agent can help you list your home. A home appraiser can appraise your home for the best selling price. A real estate attorney can guide you through the details of any offer through to closing. So you can still have professional help on parts of the sale that you are not comfortable handling.