Selling on your own as a FSBO (For Sale By Owner)

In a hot Seller's market, as like we're experiencing here in 2020, some people are wondering if it's better to sell alone. The temptation of saving the commissions that would be made on the sale of your home by involved agents can be alluring.

The problem is that most people that have made the quick decision to sell alone, have done so without being well informed as to what is really involved in selling a home. From the outside it couldn't seem easier, but once you've begun the process you're left wondering why the market isn't responding.

The truth is, there is a unbelievable amount of time involved in selling a home. An endless stream of phone calls from window shoppers (people that have no pre-approval), other agents wanting more information on the home, if you're a FSBO you'll have agents asking to be first in line if and when you decide to list with a broker, and just "strange" calls all together which come with listing a home for sale. Believe me, even to a REALTOR® who does this full time, they themselves can easily become overwhelmed with the task. Luckily more times than not, they have the help of others within their brokerage if they need it.

So that leaves the big question of how much time you believe you'll be able to dedicate to the process. Most people working full time jobs will find this a massive daughting task. The problem of time becomes an even bigger issue when it comes to scheduling showings for your home. It would be great if the people that bought your home were within the first couple of scheduled showings, but that's just not realistic. Most of the time it takes what seems as an endless stream of showings, because as a FSBO you may have a harder time attracting qualified buyers. So the problem becomes what many FSBO's encounter, which is that they have a large number of showings but with no offers on the table. Believe it or not, this is the better position to be in as a FSBO, but it just won't feel like it. If you're attract a huge stream of showings, even if they are not qualified buyers, you're at least doing a good job of getting the property attention on the market. Most FSBO's don't get this far.

Where most FSBO's fall short is marketing their property and gaining the exposure it needs to sell. They simply believe a "for sale" sign in the yard and a post on Zillow will do the trick. What they soon learn is that this just won't cut it with most home sales. You'll need to gain the attention of a market that is serious about buying a home, and most importantly "your home". If your home has special features, or attracts a certain home buyer, you'll need to know how to get in front of that buyer. Homes in golf communities will attract that golf enthusiast, just like homes on the water will attract that boating enthusiast. Social media outlets, forums, retail businesses, associations, and clubs, these are just some of the places to find these potential buyers.

Let's quickly remember why we are choosing to sell alone. The commission. 6% is about the average on the sale of a home. What we might either forget, or maybe not be aware of, is that this is the commission split between 2 agents. That means 3% goes to the Buyer's agent and 3% goes to the Seller's agent. As a FSBO you might be willing to go into the sale of the home without representation from an agent, but don't expect a serious qualified buyer to make the same decision.

A qualified buyer is more times than not, working with a real estate professional. These buyers will have a pre-approval letter in hand waiting to make an offer on the right home that comes along. These buyers know that in a real estate transaction, typically the seller pays the commision for their representation. So using an agent to buy a home is something almost second nature to a serious qualified buyer. So the money you might save is really your portion of representation, the Seller's agent 3%. Do the calculations and ask yourself if it is really worth it.

Now some FSBO's may say that they refuse to pay the Buyer's agent commission and if the buyer wants to purchase the property, they can do so without an agent. Or, the FSBO will say that the buyer can use an agent, but they'll have to pay for the commission out of their own pocket. Neither of these options will usually pan out for the FSBO. More times than not, the FSBO will accept the responsiblity of paying the 3% to the Buyer's agent which only saves them the remaining 3%.

When you come to the realiziation that you are most times only saving 3% of the commission on a home, you will have to wonder if the sacrafice was truely worth it. Did you really get the best market value on your home? Did you get the exposure you would have gotten through a broker? Rather than just Zillow, what type of attention would the home have gotten on ALL the real estate platforms? What attention would it have gotten from within brokerages and their agents? The web of agents and buyers that would have become aware of this home on the first day it was on market, what kind of response would it have gotten? Rather than the one or two qualified buyers that came your way, what would have been the number of qualified buyers you received through listing with a broker? Did you really get top market dollar??

Well...it's okay I guess. You did save the 3%!