The National Association of Realtors (NAR) will tell you, a homeowner, that if you want to sell your own home, it would be wise to hire a realtor to get the job done. Not just a licensed real estate agent, but one who is also a member of NAR – a “Realtor”. And it does make sense. To handle what may very well be the biggest financial transaction in your life, you probably should hire a pro to handle that transaction.
But there’s no law requiring a homeowner (home seller) to do so. In other words, there’s no law preventing a homeowner from selling his or her own home, thus avoiding the use of a real estate agent, and avoiding the corresponding real estate commission expense – often in the 5%-6% range.
The practice is called FSBO (for sale by owner), sell by owner, selling a house by owner, sell your own home. And while for sale by owner sales encompass a fairly small percentage of total home sales (recent U.S statistics show 7%-9% for sale by owner sales), it seems clear that there will always be those confidant, even staunch, do-it-yourselfers who believe they can do a better job of selling their home… and save some money in the process.
That said, I decided to write a book to help these courageous do-it-yourself homeowners sell their home as efficiently and as stress-free as possible. The title: FSBO It: A Broker’s Guide to Selling Your Own Home and it contains insider tips, techniques and wisdom – fined tuned over my 31 years as a real estate broker and presented with some degree of lighthearted humor.
Put another way, the book offers down-to-earth, no BS real life strategies, tactics, and tricks that will get your home sold with the least amount of stress, effort and risk and for the highest price available in your marketplace.
It’s like having the wisdom of a seasoned real estate veteran at your disposal… without the 5%-6% commission expense.
But if a homeowner decides to become a FSBO home seller, he or she would be wise to decide early on if the work and risk involved is worth the 5%-6% savings. A home seller can spend a lot of time, make a lot of mistakes, put themselves in legal jeopardy, and cost themselves much more than the commission savings very quickly. Consider…
- Pricing your FSBO home. Have you researched market values thoroughly? Is your asking price and expected final price below market value? If so, your buyer will get a deal and you’ll have left money on the table. If your price is above market value, your home will sit on the market and not sell.
- Marketing your FSBO home. Are you truly getting the exposure necessary to attract a good amount of qualified buyers? Or are you limiting your buyer pool, thereby limiting your chances of extracting top dollar from the marketplace?
- Time. Are you really able to accommodate the buyer visits, buyer inspections, municipal inspections, appraisals, etc? Imagine making special arrangements with your boss to come in to work late because of a 9am buyer visit, only to have that buyer not show. Or call to ask if he can come at 1:30pm instead of 9am. Now imagine that happening multiple times, week after week.
- Contracts. Sure, you can download some generic set of papers and fill in the blanks. But do you really understand all of that verbiage? And are you sure you’ve covered all necessary matters? Who holds the escrow money? What are the ramifications if problems are discovered by the buyer’s home inspector? Who is ordering the title search and the title policy, and who is handling the closing? Do you have a handle on all of your mortgages, judgments and real estate taxes?
- Negotiating. Be honest with yourself. Are you any good at this? And what if your buyer is very good at this? That 5% real estate agent commission “savings” can disappear right here, real quick.
- Lawsuits. Even if you and your buyer get through the sale and settlement process, have you structured things in the proper way to avoid legal problems after the settlement?
As a licensed real estate broker in the Commonwealth of Pennsylvania, I’ve been conducting real estate transactions since 1988. 31 years in the real estate business. That’s a long time. And it’s also a lot of home sellers, home buyers, and homes. I don’t know exact numbers, but I can safely say that in all those years I successfully closed many hundreds of transactions and worked with thousands of buyers, sellers, landlords, tenants, loan officers, title agents, home inspectors, real estate agents and brokers, municipal authorities and other industry representatives.
One thing I do know, though: no two transactions were alike – different people and personalities, differences in homes, costs, timing, contracts, etc. Selling and buying a house is work – for the home seller, the home buyer, and any real estate agents and other parties involved. Problem solving and flexibility are the key to success when it comes to real estate sales – no doubt about it.
So if you decide to FSBO your own home, know that there will be work, there will be grief and there will be frustration. Stay flexible. And to help with the FSBO process, pick up my Kindle ebook titled FSBO It: A Broker’s Guide to Selling Your Own Home. You’ll find some great suggestions to help home sellers get their home sold. Home buyers and real estate agents can benefit from the book, too! Grab a copy at Amazon – FSBO-IT.com. If you like what you read, please give a review on Amazon. Thanks much!
Lastly, if you have real estate questions or could use a little help, feel free to contact me at www.RickSheppard.com. And of course, please contact an attorney, an accountant, a financial advisor if you have legal, accounting, tax, or financial related questions.