The advantages of selling by the owner when selling your house
When spring is in the air, it not only means that summer is right around the corner, but that the real estate market is about to pick up and a lot of houses will be bought and sold in the coming months. The first question that often comes up when someone starts thinking about selling their home is whether they should use a real estate agent or try to sell it by the owner. In this article, we’ll talk about selling by owner and whether it’s the right choice for his situation.
What does FSBO stand for?
A sell-by-owner sale is any type of sale where the owner will handle the process themselves. The house is not being handled by any type of real estate professional during the sale process. In the US it is not required to have a real estate agent during the home sale process, however, some states require a real estate attorney to be involved to make sure everything is done legally.
FSBO routing can be done through a variety of methods. Most homeowners in the US use the traditional selling by owner process where they imitate the process of an agent but become the agent for their own home. However, that is not the only method. FSBO sellers can sell their home at a home sale auction, exchange the home with another owner, or sell it directly to an investor.
The advantages of FSBOs
The most attractive advantage of FSBO is the savings on a real estate commission fee. When they work with a real estate professional, they typically charge 5 to 8 percent of a home purchase at closing. This can be quite a significant amount for many homeowners. For example, if your house sold for $300,000 with a realtor, that would mean you would give up $15,000 with a realtor at the conservative 5 percent rate. That’s thousands of dollars, even tens of thousands for many homeowners, deducted from the proceeds of selling a home that could be used for vacations, college funds, and retirement savings. So why use a real estate agent if you don’t have to?
The Disadvantages of FSBOs
The reasons most people choose to sell through an agent is because the process of selling a home can be very complicated, time consuming, and tedious. If you are selling privately, you will be responsible for listing, marketing, showings, negotiations and closing yourself. A buyer may ask you questions about the house or the process of selling the house that you are not sure of the answers to.
Those who wish to sell this way must put in the time and effort to become well versed in the real estate process and be willing to do whatever it takes to sell their home. Sellers who can’t commit the time can have a home that sits on the market for months before the owner collapses and turns to a real estate agent. So, if you have a full-time job or business, a large family or a fulfilling life, or are going through a major life change, selling your home on your own will be difficult, not impossible, just difficult.
What FSBO does not mean
Just because you’re selling your home on your own doesn’t mean you have to do every step of the process on your own. There is more to the world of real estate than just buyers, sellers, and agents. For a flat fee, a real estate agent can help you list your home. A home appraiser can evaluate your home for the best selling price. A real estate attorney can walk you through the details of any offer all the way to closing. So you can still have professional help on parts of the sale that you don’t feel comfortable handling.