Is FSBO (For Sale By Owner) a good idea? Right now with sellers hearing about the shortage of homes on the market I have noticed a lot of FSBO signs going up but is this really the best way to sell your home? FSBO sales account for less than 10% of all home sales. About 40% of all FSBO sales are to friends or family members. Small towns have the most success with FSBO sales, while suburban areas have only about a 7% rate of success.
What are the advantages of FBSO? The main reason people try it is to save on the Realtor commission which is typically 6% of the sale price. The other reason is that you, the seller are in charge of showings, advertising and all marketing. These advantages sound nice but are they really advantages?
What are the disadvantages to selling your home FSBO? Most homes that actually sell do sell for about 16% less than homes sold through a real estate agent. People that typically by a FSBO are deal hunters looking for a really low price. Here you saved the 6% commission but you still lost 10% and that is not including your costs for marketing, etc. Over 80% of FSBO homes end up being listed with a Realtor eventually, but when the seller makes the switch they have lost months of valuable sale time. The majority of buyers are working with a Realtor and the majority of Realtors do not show FSBO homes because they end up doing the work for both parties for half the commission. You also need to know your contracts and selling a home is a legal process which means you may need to hire an attorney to help you out which costs you more money.
Selling a home on your own is always an option but before you decide to go that route make sure you do your research and make sure it will really be the best option for you in the long run. By listing with a Realtor you save yourself all the work of marketing, paperwork, negotiations, the closing, it makes everything much easier for the seller and in the end is well worth the commission.
*Statistics are from the National Association of Realtors