The real estate industry has a good reason not to recommend people and homeowners towards the For Sale By Owner or FSBO path – they’re losing income and commissions when a FSBO is successful. But if you’re the type that doesn’t like to deal with a lot of people, answer calls that don’t seem to go anywhere, do cold-calling yourself, or be patient for a sale to happen, then being a FSBO for your own home sale is probably not a good idea either.
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What You Have to Accept as a FSBO
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The simple fact is, selling a home is exactly that – selling. There’s no way around it. But the FSBO aspect is highly appealing when one believe that he can save six percent of an avoided commission on his home. And that’s real money. After all, most homes go for at least $200,000 if not closer to $300,000 these days. Six percent is easily $12,000 to $18,000, and that’s before the IRS takes a bite out of the profit as well if the capital gains exemption is exceeded. So going FSBO can be extremely attractive at first.
In a seller’s market, the idea of a FSBO is going to seem a lot easier. But here are the things to consider as well:
- Do you have the time to commit to actively selling your home? The reason why agents are involved is because they can spend a good amount of time marketing and selling versus working a regular job and family.
- Do you have the right tools? Agents have industry listing tools, networks, and company resources to fall back on. You have to do your own research entirely as a FSBO and rely on Internet sites for trend information, which may not be correct.
- Are you a talker? Even if you don’t like selling, as a FSBO you will have to communicate with people, answer questions, return calls, and market your property.
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If you’re saying no to the first three questions above, it’s a problem, but that doesn’t mean that you’re on the rocks as a FSBO and it’s totally impossible. Here are six ways to get around the issue and still enjoy the financial benefit:
1. Be willing to work with buyer sales agents. This will mean that you will have to pay some portion of a commission to make a sale happen. Normally, when two agents split a sale, it’s a 50/50 cut of the commission the selling agent would get alone. You could as a FSBO offer 3 percent, which is the same value, to a buyer’s agent and let that agent do most of the work selling the home to his buyer. Keep in mind, the buyer’s agent represents the buyer, but if you know the real estate process well enough, the buyer’s agent could in theory handle most of the sales communication, letting you as the homeowner seller focus on the deal and closing it.
2. Have a spouse who is a good talker handle the communications and selling aspect. This is a bit of a team effort involved, but it’s usually the case that one partner in a marriage or relationship is a people person while the other is not. Take advantage of the different and let the partner do the talking to bring in the sale.
3. Work through an attorney. This is a bit more of an expensive route, and it could end up costing more than a commission to a sales agent. However, an attorney can easily be the combination of both a sales agent and broker all in one. The law provides an exception for attorneys given the fact that they have a bar license to practice property law in general. While the FSBO could be managing the final decisions, there are plenty of attorneys willing to speak for a client for the right retainer or fee.
4. Hire a family member to do the selling work. A younger family member is a good way to give some responsibility to a relative which can also be a bit beneficial financially as well. Younger often naturally do well in the selling environment given some liberty to show their stuff. Just don’t let the relative have too much rope or you might find yourself in an embarrassing agreement.
5. Photos are worth thousands of words. Work with a good graphic artist and you’ll be amazed at what such an artist can do with information and photographs. Being able to put this information up on the Internet as well as handing it out with a professional portfolio display can cut short a lot of questions and bring communication right to the point. This cuts down on the sales chit-chit and focuses discussion on what matters. It does require the seller to provide enough information in the handouts and portfolios, however.
6. Throw in the towel after a good effort. If you’ve been listing for a long time and nothing is moving, then it may be time to throw in the towel and ask for help from an agent. There’s nothing wrong with realizing one made a mistake and can fix it. Being FSBO is not an ego race. It’s a method of selling a home. And if one method doesn’t work, have the smarts to switch the game and try something different instead of banging one’s head against a wall. You don’t have to stick with a for sale by owner California seller just because your listing started as one.
