Step 1: Initial Considerations
Standard practice in the real estate industry that homeowners pay an average of 3% of the sales price of the home in commissions to each party’s real estate agent (commissions totaling 6% of the sales price of the home if both the seller and buyer are represented by a real estate agent). Accordingly, selling a home as a “For Sale By Owner” (FSBO) property (i.e., selling your home without using a real estate agent) has the potential to save homeowners tens of thousands of dollars in avoided fees. Prior to any decision to sell a home without the assistance of an agent and follow the remainder of the Nestseller Step-By-Step Guide, homeowners should give thorough consideration to the responsibilities and time commitment that the FSBO sales process will entail. The amount of time homeowners spend conducting initial research likely will have a significant impact on the ease and success of the remainder of the FSBO sales process.
Homeowners who are considering whether to sell their home without using a real estate agent should determine whether the commissions avoided as a result of the FSBO sales process will exceed the responsibilities that the process entails. In assessing the pros and cons of the FSBO sales process, homeowners should review each step of the Nestseller Step-By-Step Guide and understand the commitment involved before deciding whether they will have the time and initiative to take full advantage of the FSBO sales process. Homeowners who are unable to set aside sufficient time to the FSBO sales process might be better off hiring an agent to handle some or all of the anticipated workload.
Working with a Buyer’s Agent
Homeowners who are considering whether to sell a home as an FSBO property should consider whether they are willing to work with a buyer’s real estate agent. Even though a homeowner may choose to sell without using an agent, the FSBO seller should recognize that a buyer may decide to hire an agent to represent his or her interests in the transaction. As discussed above, standard practice dictates that sellers pay 3% of the total sales price of the home in commission to a buyer’s agent. Although this percentage is subject to negotiation (see Step 7: Offers and Negotiations), FSBO sellers should evaluate whether they are willing to work with represented buyers and recalculate whether the responsibilities of the FSBO process outweigh the potential for avoided commissions to agents.
Other Services Provided by Real Estate Agents
Homeowners also should consider the potential advice and experience that they will forgo by deciding to sell a home as an FSBO property. Many real estate agents have years of experience and are well prepared to handle all issues, however uncommon or unexpected, that may arise during the sales process. For example, agents often are able to provide assistance in determining the proper listing price of the home, negotiating offers, and advising on market conditions. Moreover, agents often provide services such as screening potential buyers, ensuring that prospective buyers are financially able to make an offer, helping the seller estimate closing costs, and offering advice on how to increase the home’s appeal. Real estate agents also will oversee the paperwork process and advise sellers on the meaning and applicability of certain documents that require signature.
Finally, homeowners contemplating whether to undertake the FSBO process should ask themselves whether they will be able to remain objective in their self-representation and detach themselves from any personal or emotional connection with the home. FSBO sellers should be prepared to handle criticism about their homes and deal with price negotiations in an impartial manner. Homeowners will have a better chance at a successful FSBO home sale if they are able to represent the home sale in the same manner as a real estate agent without taking negative feedback personally.
Step 1 Premium Content
• Do Agents Add Sufficient Value to Justify Their Commissions?
• Low-Cost Services Available to Assist FSBO Sellers (Flat-Fee MLS Services)
• Why do Agents Contact FSBO Sellers?