About For Sale by Owner (FSBO)
For sale by owner (FSBO) is a real estate term which describes the situation in which a property is offered for sale directly by its owner without the solicitation of a real estate broker. In recent years the term has been used more broadly to describe the process of marketing, buying and selling of real estate property without the representation of a real estate broker.
Advantages of (FSBO)
Many sellers who choose to sell through (FSBO) do so to avoid paying a commission to a broker which is typically six percent of the selling price but can range between five and seven percent across the U.S.
Selling your home through an agent can many times delay the sale of the property. Despite what agents say they all consider the common practice of inflating the price of a home to compensate for their commission. A smart buyer who knows you’re using an agent won’t pay an inflated price so they will reflexively offer less. This leaves you to choose between a smaller offer, (losing more equity) or waiting for a buyer to pay the higher price.
Greater Market Immunity
Having market immunity is the ability to price your property according to your own specific wants and needs, regardless of market prices. Greater market immunity makes financial and practical sense in a buyers and sellers market. In a buyers market it can be harder with lots of homes available, to sell a home because of the competition. FSBO allows you to be more price-competitive, given the fact that your surrounding comparables are being sold under a realtor, common sense economics predicts that the buyer will prefer the less costly home offered FSBO. For sellers it’s just not smart to pay a commission and sacrifice apportion of your equity. FSBO will enable you to retain the maximum amount of your hard earned equity.
When you sell via FSBO you are in control of your schedule and appointments. You don’t have to worry about keeping your house spotless incase of an agent bringing by potential buyers with short notice. You can also prepare your home accordingly and be ready to show your property at its best when buyers are scheduled to see your home.
Disadvantages of (FSBO)
- Properties aren’t listed with the Multiple Listing Services (MLS). Unless you list your property with the local MLS your property will not be available for buyer’s agents to access, but with the availability of a flat rate MLS listing service you now have the option to list with the local MLS listing service with out having to pay a commission.
- There is no realtor from whom to seek advice or go over the paperwork and legal documents. Hiring real estate attorney will be very helpful in this area when closing on a property.
- You are accountable if any errors or omissions occur within the contract. If you are represented by a realtor they are responsible if anything goes wrong.