Is it a good idea to be a FSBO (For Sale by Owner)

Updated: May 21


Selling your home is quite the journey. It may start with a realistic factor, such as relocating, but encompasses emotional, practical, financial and legal factors, as well as being complicated.


Once you have decided to sell, you have 3 legal options available to you: Sell it yourself (FSBO), use an online broker platform (iBuyer), or engage the services of a realtor.


Before you make your decision, take some time to consider all the factors involved in each alternative. This is a sure way to protect yourself from becoming embroiled in a costly, timely, and potentially legal mess. Ideally, try to spot the least complicated as well as most financially viable option

Let’s start with:


Selling your own home - FSBO


This alternative has been steadily declining in favor. Only 8% of sales were FSBO in 2017 as opposed to 14% in 2004. This is because selling your own home sounds much easier than it is.


The main reason people choose this option is to save on estate agent fees; normally 6% of the sales price. But statistics show that agent-assisted homes sell for typically $265 500 and FSBO at $200 000. This means, in trying to save around $12000 - $15000, you lose around $50 000 (the extra profit, minus the agent’s fee).


Additionally, the work that goes into selling a house may not be apparent until you either try it, or thoroughly research it. Here are the facts:

You need to price your home correctly


Even a slightly overpriced home will keep your house on the market for too long. Getting the balance right is a seriously complicated and risky exercise. Sharpen your research skills, and give it a try! How do you rank against your competition in terms of how new, modern, close to amenities and popular your neighborhood is? What are your home’s best selling points and how will you decide on the lowest price you will accept? We highly advise getting a professional estimate by an appraisal agent. It is also recommended to contact lenders in order to out what the average buyer can afford. No point in pricing your home out of their range.


Remember, emotions must take a backseat. As should pride. Just because a close neighbor got $50,000 more than you thought he would does not qualify you for the same selling price. Successfully counter negotiating low offers can be a huge challenge for private home sellers. Finding your middle ground is crucial in this stage of the journey.


You need to show your house


Showing your house is not as easy as taking a few pictures and placing it on a listing. Home buying is a personal process, and buyers take this part seriously. As would you. So, a good first step would be to place yourself in their shoes.


Take the following into consideration. You need to lead potential buyers to your house, so besides the listing, you need to organize ‘for show’ signs. These include directional signs as well as front lawn ones. And yes, those directional signs need to be placed strategically and timely.


Apart from cleaning, repairing and setting up your home with flowers, music, and being in an agreeable mood, there is a bit of paperwork involved as well. That is if you want to be successful.

How good are you at following up? Creating a contact list of everyone viewing your home is highly recommended. Following up on that interest is the key to selling your home in a timely manner.


You will need to do the proper legal paperwork


Although you don’t need a lawyer in the state of Florida to sell or purchase your house, the paperwork is still a legal aspect you need to get just right. You could purchase a ‘FSBO’ contract bundle, but we still suggest doing some research in avoiding possible complications at closing (or after!).


You may need to screen buyers.


If you don’t know the buyer personally, chances are they will be using an agent. In which case you won’t need to screen them. Where there are no real estate agents involved, and even if you know the buyer on a personal level, how are their finances? The buyer will need to have a good credit rating, be able to afford the monthly installments, and have enough to cover a down payment in addition to closing costs before they qualify.



With all of that taken into consideration, FSBO sounds like a full-time job where you stand to lose instead of gain. But there are always online broker platforms, right?


Going the online platform route - ‘iSelling’


A huge draw for this method of selling is convenience. You get to list, have an offer and close the deal without the hassle of negotiating and showing your home. Typically, offers are made within 48 hours, and closing happens quite fast. Sure, you don’t get your full value, but the time factor and easy sale weights favorably on the ‘pro’ list. But convenience comes at a cost. The financial implication does not stop at a lower offer than traditional selling. iBuyer platforms have service fees (or other clever terms that essentially mean a charge) at between 6 and 14%, the higher rates being for the more ‘risky’ ventures. Then there are the repair costs. They offer free home assessments to sellers where they will detail needed repairs. Sounds good. As does the cost deduction from your net proceeds, so you don’t have to pay out of pocket. Hang on.


Read that again. Understand that this means a possible surprise when receiving your final payout. Remember that you are not in control of deciding which repairs are necessary. You will also not have a say in the choice of contractor, and certainly not of the often inflated repair costs. If you are the kind of person that keeps a tight grip on your finances, the surprise factor may not be worth the quick and convenient sale.



Real estate agents


A real estate agent is immersed in the market. They network and use the latest methods in getting maximum exposure for your home. They treat the process as a highly personal experience and find the most unique solutions. This is their job, and you are not paying for it. Considering the possible loss of pocket and stress involved in selling your own home and listing it with a corporate-minded iBuyer, you may want to leave this in experienced hands and go on with your life.


In considering your options, schedule a free interview with one of our highly experienced realtors in making the most convenient and profitable sale.



Resources:

https://www.nar.realtor/research-and-statistics/quick-real-estate-statistics

https://www.nar.realtor/blogs/economists-outlook/selling-your-home-solo-to-save-money-you-ll-actually-make-less-than-you-think

https://orlandorealtysolutions.com/fsbo-guide/

https://www.investopedia.com/articles/personal-finance/071514/8-reasons-not-sell-your-home-without-agent.asp

https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers

https://www.respergroup.com/blog/hidden-costs

(Bad reviews - not included) https://www.yelp.com/biz/open-door-realty-las-vegas

https://www.reddit.com/r/RealEstate/comments/ao5o0r/opendoor_seller_review_orlando/

https://www.bankrate.com/real-estate/ibuying/

https://www.biggerpockets.com/blog/real-estate-ibuyers-versus-agents

https://www.opendoor.com/w/faq/what-does-it-cost-to-sell-to-opendoor

https://www.nar.realtor/blogs/economists-outlook/selling-your-home-solo-to-save-money-you-ll-actually-make-less-than-you-think

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