Does For Sale Buy Owner Work?
I’m not a realtor or an expert, but I’ll be honest, I wanted to try it several times during my past selling experience. My wife and I even contemplated doing FSBO after we took our home off the market in December 2006. We thought about it and did some research, but we’re not gutsy enough to try it, especially in this real estate market. Thus, we’ve consulted with several real estate agents and will choose one to list our house for a second time.
One of the biggest issues people choose to do FSBO is due to the fact they’ll save a lot of money not paying commission costs to one or both realtors. Remember as a seller, you pay both commissions, one to your agent and one to the buyers agent. Buyers pay nothing in terms of a commssion.
Let’s use this scenario if you’re using a realtor:
Contract Price: $300,000
Commission Base: 5%
Total Commission Paid at Closing: $15,000 ($7,500 to your agent and $7,500 to the buyer’s agent)
Net Profit (before closing costs/taxes, etc): $285,000
The reality is that $15,000 is a lot of money (at least to me it is). If you didn’t use a realtor (and the buyer’s didn’t have a realtor), you do not pay any commission costs and net the total profit. Easy and tangible math right? To me, not so true. Unfortunately, many sellers look at this simple equation and list their home as FSBO. Selling FSBO is much more than putting a sign up in front of your home and waiting for buyers to call or walk up to your door. In a lot of cases, sellers who opt for FSBO eventually acquire an agent who then finally sells their home. At this point, a seller has wasted valuable market time, wasted their own time, and costs to list the home on the MLS system and any marketing they’ve done plus now are forced to pay the commissions to both agents on the sale.
So am I saying it isn’t worth it? No. It really all depends on what type of seller you perceive yourself to be. If you don’t mind handling all the correspondence directly with a buyer in terms of phone calls, emails, etc., understand the negotiating process, have a good lawyer, and live in a popular area, it may be for you. It also helps if you understand the marketing process of selling a home and can delve into advertising your home on several outlets including CraigsList.org. Also, keep in mind that when a showing is to occur, you are the one who shows it. There is no lockbox and you must be at the home when they arrive. If you have a flexible work schedule or work close to home this may be a non-factor.
In my honest opinion, its not about just saving money not paying commission costs. One of