Selling a home FSBO

[RadDoc6876]

We may be relocating soon and are considering selling our home For Sale By Owner--we have never done before this but prior (bad) experiences with realtors have provided strong motivation.  Our home is worth around $800K and we have $400K in equity.  We have no other debt and plenty of borrowing power and down payment at the ready, and would not need to sell this home prior to buying our next one, so we do not need to list the sale as a contingency for purchasing our next place.  At the expected selling price the "standard" realtor commission for our current home would be a lot and again I am just not motivated to hand over tens of thousands of dollars for some paperwork and phone calls.

Has anyone gone through the FSBO process and have any lessons learned to share--pros/cons compared to using a realtor, etc.?  Useful web sites to walk you through the process? (Zillow, FSBO.com?) I've known people who just said "I called up a real estate attorney and paid him to sign off on the standard contract and that was about it."  Sounds good to me...but I realize there's a process involved that's important to understand.  Thanks!!

[Dreamgiver]

I tried doing it in the past and it did not work out for me. The reason was that the market was still somewhat depressed (2012), house was in a standard area, and the realtors hired by the buyers either would not come to show my house to their clients or would want their 3% cut anyway. Based on my limited experience, the way it would work is if you are in a highly desirable areas where houses go like hotcakes (like the houses sell in 1-2 days with multiple offers). Just my 2 cents.

[VagabondMD]

I did FSBO many years ago, almost 20 years ago, in a supercharged Seattle market. My wife was not working at the time and handled all of the showings, open houses, negotiations, etc. Our house sold in two weeks in a competitive situation.

I am not sure the lessons from so long ago are still applicable. If so, I would recommend offering the buyer's realtor their cut (3%) as they will show your home, and there is a good chance that they will do all of the paperwork for you.

[Craigy]

Generally speaking, you will get more money more quickly with an agent.  This is what my father always told me and he is a commercial real estate developer and has also flipped dozens of houses in his lifetime.  Times may have changed since then but I still believe they serve a purpose.

An agent earns their commission by bringing you buyers and by acting as an intermediary to smooth the transaction.  You don't want to talk to the buyer directly, and they really don't want to talk to you either.  A buyer will be surprised by costs of this and that, inspections and whatnot and the agent walks him through all of that step-by-step and keeping him in check.  Making an offer and countering is a lot less personal when your agent tells you what the other agent told her.

It may be easier to try to seek out a smaller commission in general, which has to be worked out on the front end.  I believe my house was more like 4.5%.  On the larger value houses this is more typical and reasonable.  There will of course be some agents who won't take less than 6%/3% but most would be thrilled to make 2% of $800k.

[StuRedman]

In our area the commission is 7%...  The agents band together so no one sees fsbo or discount realtors.

[jfoxcpacfp]

I lean toward Craigy's advice. Almost any agent will negotiate the commission. You might also consider a flat fee buyer's broker agency like Surefield.

[abds]

I would use an agent. The last time I sold a house I wanted to do it myself for the reasons you mention, but at the last minute decided to use an agent just because I didn't want to spend my own time familiarizing myself with the paperwork (that I was uncomfortable with).

I was set on a certain price before going with an agent. I was willing to take a little less to save the 6% commission. The agent convinced me to ask >10% higher than that price I was set on, and we had 15 showings with 5 offers in the first 2 days, all over asking price.

It was a pretty hot seller's market but needless to say I was very happy we went with a realtor.

[barryt]

just before the first of the year I decided to sell my house in CA by myself.  I created a simple one page website with explanations, photos, a story, the site was very simple, just photos and fact as a single pdf file.

I got a site from Godaddy for about $12 I think, the site name was simply the address to the house, in this case '6440CrystalBlvd'., posted my PDF (a friend hosted it for nothing on his server), put an ad on Zillow referring  people to the web page.  Did this a week before Christmas.

Got 56 inquiries, had a neigbor open the house for viewing but not shows it, just making sure the viewers didn't steal the faucrets and light switches.  Got three hot buyers, picked the one with cash and accepted their full offer for my price in one week, closed in 3-weeks (they offered to do it immediately, I wanted to wait until 2017, the new tax year) Signed on Jan 5, got paid on the 20th, and it was over.   They did all the work, I had my attorney watch it all, they picked the Title Company, the buyer had the money and did not need a loan, the house is in El Dorado, CA, I am in TX.

Got what I asked, no hassle, little effort (biggest part was creating the pdf file, did that in PowerPoint set to 10" by 30").  I have the advantage of a lot of marketing experience, common-sense in explaining things, reaching out to people and getting them to dream.

Got 10 or so additional inquiries from realtors, glad I avoided them, in general they all had cranial-rectal insertion problems, lots of talk, are waving, chest pounding, and a general lack of understanding about the marketing I used.

Good Luck, it worked very well for me.

[jfoxcpacfp]

Maybe you should work out something with barryt.

[High Income Parent]

When we sell our house I am planning on FSBO if I'm retired and have the time. I've never done it before, but with the internet and more and more people searching for homes themselves, I think it is feasible.
I think you need a good product that is ready to be shown. You can't have a cluttered unkept house and yard and expect anyone to want to buy.
It's definitely work, but if you can save 60k on a sale, that is worth it imo.

[hightower]

StuRedman wrote:

In our area the commission is 7%…  The agents band together so no one sees fsbo or discount realtors.

Click to expand...

This was my experience as well about 5 years ago when we tried to sell our condo by owner.  We got very few showings and it was on the market for 5 months.  As soon as we hired an agent, it sold within like 2 weeks.

After that experience, I consider the 7% fee to be worth it.

If you have the time and patience and live somewhere in which the realtors don't shun you, it could be done pretty easily.  We did a great job with marketing it online, staging the inside, and took excellent photos (Photography is my hobby), but all of the buyers in the area were using realtors and none of the realtors were willing to show our house to their clients.  Its going to depend on your area I think.  I was in the same mindset as the OP when we started thinking "why hire a realtor for tens of thousands of dollars to just take some photos and do some paperwork?"  Turns out, in this area at least, they band together quite nicely and make it very, very difficult to sell by owner.  I have to give them credit for being so well organized.  It works.  Doctors could learn a thing or two from that industry (in terms of banding together and protecting ourselves from outsiders taking over our business).

[East coast]

For the folks stating that agents wouldn't show their FSBO - were you guys not offering a dime to the realtor as incentive? If you were, it was advertised accordingly, correct?

[PhysicianOnFIRE]

We bought our current home and sold our last home FSBO without buyers or sellers agents. Your local Title Company is probably your best resource. They helped us with paperwork and answered any questions we had.

It's up to you whether or not to have a RE lawyer involved. It might be a good idea depending on where you live and how much you think you can trust the party on the other end of the transaction. Since you'll be saving potentially $50,000, a couple thousand on a lawyer may be money well spent.

Best,

-PoF

[dwickline]

Can anyone recommend a book that reviews all important topics for FSBO?  Thanks for your input.

[ITEngineer]

I've sold two houses FSBO. In both cases, we were able to get buyers within 4 weeks. We offered the standard 3% commission but were willing to drop the house price 3% if someone came to the buy the house without the realtor. Unfortunately for the buyers they always brought a realtor with them. I guess saving $15k wasn't worth it to them.

The biggest issue that I have seen with FSBO listings in our area is most FSBO houses are drastically overpriced. I cannot explain why (except the owners have emotional attachment to their houses) but why even go look at a house when it's priced 20% higher than similar listings in the neighborhood? Getting an MLS number is easy and that is worth the expense.

Good luck selling. Price it fairly and you might even get more than asking price. And as I discovered the first time I bought a house, the Realtor(s) did minimal work (he didn't even find the house we bought! I did!) yet took a nice chunk of the sale price. Ouch.

This is an industry ripe for disruption. The 'value add' by Realtor's doesn't justify their fees.