For Sale By Owner or FSBO, is a popular trend. Is it worth it? There are many advantages and disadvantages. Here are things to think about.
What is FSBO? It’s a method where the owner sells directly to the buyer. There is no commission for the seller.
Pro: Lower Commission
If you’re selling a home, the money you take home after fees and taxes is one of the most important things.
For savvy owners, FSBO can be a great deal. This is because real estate transactions are fairly expensive. Each agent gets 3%. With FSBO, only the buyer’s agent would need to be paid.
The savings can be massive. For every $100,000 in housing price, $3,000 is saved.
Con: No pricing strategy
As an individual, you do not get access to market data like the professionals. Closing prices of homes are not required to be revealed to the public. To get around this, you can hire a real estate agent to price your house. They can use their expertise and look at the surrounding neighborhood. Alternatively, think about using an AI-powered house estimate tool.
Pro: Full Control Over the Sale
Some people just like being in charge. If you go FSBO, you have the final say on everything from improvements, to showings, to who you transact with. This is priceless to some people. Having a stranger handle such an important transaction might be unsettling to some.
Con: Inaccessible to Marketing Channel
If you work with an agent, you can get listed on MLS. MLS is the central database where houses get listed. You’ll need to think of alternative ways to sell.
Pro: Total dedication
It can be a mixed bag with agents. Some will spend a lot of time with your property. Others will spread themselves too thinly with other clients and you’ll get poor service. With FSBO, you can dedicate yourself totally to the cause.
Con: Lack of knowledge
There is plenty of real estate jargon that individuals will be unfamiliar with. The inexperience could be a big disadvantage.
Agents do a lot. They help with the pricing of real estate and the marketing strategy. Legal issues are dealt with and can give great advice on negotiating. They’ll have experience dealing with other parties such as appraisers, inspectors, and even lenders.
Con: Large Time Commitment
If you plan on doing FSBO, expect to spend a lot of time. There is plenty of work to be done. There are many advantages and disadvantages to FSBO. Do your research before committing.