Hoping to sell your home without a Realtor?
Learn FSBO meaning, uses, and pros and cons here.
When you’re looking to purchase a home, working with a real estate agent is an easy decision. After all, it makes the process loads easier and costs you nothing out of pocket.
Selling your home, however, is a completely different story.
In most real estate transactions, it is the Seller who is responsible for paying both real estate agents’ commissions (about 3% of the sale price goes to each agent). If you decide to act as your own agent, you could be saving a pretty big chunk of change.
Another alternative is FSBO, meaning you keep more money in your pocket. But how does it work, and is it worth it?
What is FSBO?
FSBO (pronounced “fizz-bo”) stands for For Sale By Owner.
With a FSBO sale, Sellers do not hire a real estate agent to help sell their home. Instead, they take on that role themselves, doing all the work of taking photos, listing the home, hosting tours and Open Houses, and—ultimately—keeping a greater portion of the sale price.
Keep in mind, Sellers are still responsible for paying the Buyer’s agent, but many homeowners find that paying half of this amount is preferable to paying two agents.
For instance, if you sold your home for $350,000, that’s an extra $10,500 you could (potentially) have in your pocket!
How Does FSBO Work?
Selling your house For Sale By Owner means you are essentially stepping into the role of the Seller’s agent, so it’s helpful to know the many steps involved.
1. Prep the House
Many Sellers choose to do a bit of work in advance. This includes things like:
- Getting a pre-listing inspection
- Making repairs
- Staging the home
While these steps aren’t technically necessary, they can help your home sell quicker and for more money.
2. Set the Asking Price
Settling on an asking price is one of the most important steps in the For Sale By Owner process. Price the home too high, and it sits on the market for long periods of time. Too low, and you’re leaving money on the table.
Take a look at comparable houses in your area (i.e. ones that have roughly the same features, square footage, etc.) to get a better idea of what to expect.
Alternatively, you can hire a professional appraiser.
Appraisals often run just a few hundred dollars and can provide you with an accurate, unbiased asking price.
3. Market the Home
This next step is essentially just advertising your home so that Buyers will be interested.
Your first step is to create a listing, so other people know it’s for sale. Good-quality descriptions and photos will help with this, but where you list your home has a lot to do with how quickly it sells.
4. Host Tours
Once interest has been generated, it will be your job to coordinate showings with Buyers. Real estate agents often use tricks like baking fresh cookies and staging to make a home more appealing.
5. Negotiate & Finalize Price
Once the offers start coming in, you will negotiate a selling price with the Buyer’s agent.
This can often mean a lot of back and forth, especially in a buyer’s market. And, without an agent of your own, you will be in charge of deciding on a fair price.
6. Draw Up Closing Paperwork
Selling your home doesn’t end when you find a buyer. In many ways, it’s only the beginning.
Real estate relies on a lot of paperwork that you’ll have to sign on closing day—from deeds to mortgages and beyond. Even if you are interested in selling your home yourself, you will need to work with a title agency to complete the transfer properly.
Look for a title agency with FSBO experience, so you know you will be well taken care of.
Is FSBO Right For You?
- You don’t want to pay as much in commissions
- You don’t need to sell the house in a hurry
- You want more control over the process
- It’s a seller’s market
On the other hand, you might want to consider working with a real estate agent if:
- You don’t have the time, energy, or desire to do the work
- You’re content with a lower sale price
- You want your home to sell quickly
- It’s a buyer’s market
- You owe more on the home than you’re selling it for (known as a short sale)
FSBO Made Easy
Selling your home on your own isn’t always the easiest, but there’s a reason it’s still an option. Some people do prefer having the control and financial savings of acting as their own real estate agent.
Keep in mind that if FSBO isn’t working for you, you can always change your mind later and hire a Realtor.
And regardless of which avenue you choose, know that you always have the freedom of choosing your own title agency.
Leading Edge Title is not only experienced at successfully closing FSBO sales, but we also pride ourselves on offering affordable prices and top-notch service. We also have a real estate attorney on-site, so you can trust us for accurate, thorough title searches.
Call or stop by our Winter Park or Winter Springs location to see how we can help you.