Hey Brian,
We sold our last house as a "for sale by owner" - FSBO. The people we bought it from, sold it as a FSBO to us. No agent, good or bad, was involved. As the buyer when we purchased it, we did most of the work. The sellers even used our attorney at closing. Showed me that we could sell it ourselves when the time came and we did.
I would recommend FSBO if (1) you are in a high traffic and (2) quick turnaround (desirable) area, (3) you have the time, both to show the house and to sell it and (4) you are OK with negotiations. The real estate agents get their commissions for a reason - as we can attest, selling your own home can get very time consuming.
You need to be comfortable giving total strangers a complete "tour" of your house, letting them wander through and listening to their feedback and comments. Not everyone will like decorating styles and some will let you know it. Got to overlook most of that. You also need to be comfortable with negotiations. In a lot of cases you may be dealing with a buyer’s agent that will be negotiating for the buyer. You need to be able to stand firm with them and anyone else for that matter.
Couple of things you should consider/do.
1. If FSBO classes are offered in your area, you should go. My wife and I went to one, was a couple of hours one evening. Answered almost all of our questions and then some. This will help you show what is specific to your area (property disclosures, reports, etc.) and show you where to get the forms. I think we needed (2) here in NC – property disclosure and “right to buy” contract for the buyers. Both were available on line. Once you have the contract to buy, the real estate lawyer will take care of the rest – at least here in NC.
2. Set a time limit and time frame – if the house is not sold by xxxx date, list it with an agent. We had 9 months to sell, so we gave ourselves 6 months as a FSBO then we were going to list with an agent. Having this time limit will also help when the agents start calling – and they will! Trust me. When the FSBO sign went up in our yard, the agent calls were 3 may be 4 to 1 over interested buyers. They will try to talk you out of selling it yourself and let them do it for you. They can be a pest but this is also a pretty good barometer – the agents know where the “hot” areas are and if you are getting more agent calls then seller calls at first – GIVE IT TIME – this is a good sign.
Having a time frame also lets you give agents a firm answer and will hopefully avoid persistent follow up calls. I told all the agents that called we had to have the house sold in 12 months – which was true – our time table was to have it sold within the next 9 though. But, I didn’t want to tip my hand and let them know that 9 months from now, if they got a call from me, I was going to be a desperate seller – blood in the water so to speak.
This time also gives you an opportunity to interview perspective agents as well. Keep in mind that if you have to eventually list with an agent, you may have to raise the price to cover commissions. You lose on a 2x whammy here – anyone who saw your price listed as a FSBO, will offer the original price which means the commissions will come from the original price you were asking WITHOUT paying commissions. Plus, if you house did not sell at the original price, it probably will not sell with the agent fees tacked on to cover the cover costs. You need to consider this when pricing to sell - this is why a good appraisal is crucial.
3. Go on-line and get several "on-line appraisals". There is a fee and usually takes a couple of days. This will also show you what other houses in your area are selling for. Google for house appraisals and you should get a couple. We used smarthomebuy.com and think it was like $100 for 3 months. Read the fine print on some of these though – we found some that were nothing more than front ends for real estate agencies.
4. Get a home inspection - with or without an agent listing. Lets perspective buyers know that you are serious and not just throwing the house on the market - plus, better for you to find what needs to be fixed than the buyers.
Hope this helps and good luck. It is a lot of work, but, I thought it was pretty fun – totally new and something I had never done before. If I think we can do it again at some point will definitely give it a go. However, We are not in a high traffic area with our current house. We will probably have to use an agent when this house is sold.
Eddie
