So...You Think You Wanna Sell Without An Agent?!

By
Real Estate Agent with Charles Rutenberg Realty

In today's tough housing market, some sellers are looking to cut costs by selling their property without using a real estate agent.  Sellers who skip the listing agent and offer their home as a "for sale by owner" - or FSBO believe they can potentially save themselves thousands of dollars.  But, FSBO sellers should be prepared to do a lot of legwork to manage the entire sales process, with no guarantee of a final sale.

Here are five questions homeowners should ask themselves before selling a home on their own.

5 questions to ask:

1. Do I know the value of my home in today's market?

A common mistake FSBO sellers make is to price their home too high.  As a result, the property languishes on the market. When a home sits for a long while, buyers start to wonder what is wrong with it. 

To market a home competitively, sellers should research the final sales price of similar properties in their community.  Updated sales information is available to agents through proprietary reports, but individual owners can also dig up sales data from public sources.    Online real estate sites may offer sales trend information for local neighborhoods, sales prices for comparable homes in the community, known as "comps," and the average length of time homes have remained on the market,.

It takes a lot of work to look at this data and figure how to price your home, but it's important in order to come up with the right value.  It may even be worthwhile to purchase an appraisal from a certified licensed appraiser, even though buyers eventually have to pay for their own. But homeowners who buy an appraisal before putting their home on the market can eliminate the risk of a pricing surprise when a buyer applies for a home loan.

Even if sellers think they've arrived at fair home values, potential buyers may still try to negotiate prices downward.  One strategy to sell quick is to price the home about 5% below the most recent comps in your area.

2. Am I ready to work with a buyer's agent?

In a typical real estate transaction, the listing agent represents the seller. But the buyer may choose an agent to represent his or her interests, too.

When a real estate deal is made, the seller usually pays both agents involved a commission based on the sale price of the house. That commission is negotiable, but it has traditionally been about 6 percent of the purchase price.  The buyer's agent and seller's agent generally split the commission in half.  As a FSBO seller, you may decide not to use a listing agent, but you can't control whether or not a potential buyer wants to use a buyer's agent.

If the buyer does use an agent, homeowners should consider offering that agent the typical commission, which would be about 3 percent of the sales price. Sellers who decide not to offer to pay the commission will probably shrink their pool of potential purchasers, because buyer's agents would not have an incentive to show their clients the seller's home.

3. Will I take charge of sales and marketing responsibilities?

Some FSBO sellers underestimate the amount of effort it takes to market their home.   Sellers should be prepared to keep the home clean, clutter-free and "show ready" at all times (inside and out).

Other steps sellers should take include:

  • Take good photos of their property and write effective sales descriptions.
  • Buy and install a "for sale" yard sign with promotional fliers that include contact information.
  • List the property in multiple classified ads and real estate Web sites.

Placing the home in the Multiple Listing Service, or MLS, is another important way to market the home.  The MLS is a database of homes for sale offered by brokers.  FSBO sellers can't submit to an MLS, but some companies have brokers who will list the seller's home in the MLS for a flat fee.  Sellers may pay a few hundred dollars for this service.

In addition to marketing their own property, FSBO sellers often need to find and hire people to help them complete the sales process.  These professionals include real estate attorneys (to review contracts and offer advice), appraisers and contractors (to make any necessary home repairs).

4. Can I bear criticism of my home?

The emotional aspect of selling a home is often overlooked, but it's an important part of the selling process.  Owners will probably hear a lot about their home's shortcomings from buyers trying to negotiate a lower sales price. Or worse, they may not receive any interest in their home, especially if the price is too high. You have a better chance of being a successful seller if you don't take negative feedback personally.

  5. Am I willing to screen potential buyers?

It may seem pushy, but FSBO sellers must be willing to screen their own buyers.  You don't want to take your house off the market to negotiate with someone who was never qualified for the home in the first place.

Before you sign a contract with a buyer, make sure the purchaser will be able to come up with the necessary funds.  Before accepting an offer, ask for a current pre-approval letter from a reputable lender. The preapproval letter should show that the buyer spoke to the lender and has been preapproved for the purchase price of the home.

It's harder to get a mortgage these days because the bar is higher.  Applicants need better credit, higher salaries and a bigger money reserve than they needed just three years ago.

 So there you have it...just a few things to keep in mind if you are considering FSBOing (fizz-boing).  Save yourself a few headaches and hire a professional, just as you would for a root canal or a tummy tuck.

 

 

 

Posted by

Sarah Maus
Realtor, GRI, CDPE, REOS, TRC
321-228-3448

 

 

Comments (3)

Clayton Bonjean
Mainsail Realty Company - Santa Rosa Beach, FL
Broker | Owner | MBA

Great post.  I think it is a horrible time to list without an agent due to current financing issues, short sales, and other distressed comps.

Mar 02, 2010 03:02 AM
Li Read
Sea to Sky Premier Properties (Salt Spring) - Salt Spring Island, BC
Caring expertise...knowledge for you!

Good post...very saavy questions and comments.    I think # 5 should be first in your excellent list.

Mar 02, 2010 03:06 AM
Sarah Maus
Charles Rutenberg Realty - Land O Lakes, FL
Your Florida Suncoast REALTOR®

Thanks for the postive feedback!  Clayton, I agree...it's difficult enough trying to determine a fair selling price for us as real estate professionals...with all the distressed issues at hand; how on earth can an uneducated individual make a determination is beyond me!

Mar 12, 2010 05:31 AM