Many folks are tempted to take the FSBO Sellers route believing they’ll save a bundle by not paying an agent’s commission. They may imagine it’s a simple as sticking a sign in the ground and watching a qualified buyer magically appear. While that may happen occasionally, the vast majority of that time it doesn’t work like that. At all.
FSBO Sellers Pricing It Right
Coming up with the right asking price requires doing your due diligence. Researching what comparable homes in the area recently sold for is key. You may also want to hire an appraiser to be sure you’re not over-pricing or under-pricing your property, as both will end up costing you. Also, beware: Those who’ve gone the FSBO Sellers route note that very often buyers are hoping for a deep discount knowing sellers aren’t paying anyone a commission. So even if you’ve listed it for a fair price, be prepared to negotiate.
When a seller prepares to put their home on the market, they have one of two choices: working with a real estate professional to sell their home, or attempting to sell it on their own (aka “FSBO” – for sale by owner).
The reason most sellers decide to go the FSBO route is to avoid paying a commission to a real estate agent. But turns out, FSBO doesn’t save money at all. In fact, in the end, it may cost you.
FSBO Facts To Ponder
According to the 2017 National Association of Realtors Profile of Home Buyers and Sellers, homes sold using an agent sell for significantly more than FSBOs. In fact, the study found that the median price of a home sold by an agent was $250,000, compared to $190,000 for FSBOs—an astounding $60,000 difference.
Will you avoid paying a commission fee if you go the For Sale By Owner route? Yes. But if your home sells for $60,000 less than it would have with an agent, it’s not worth it. The math simply wouldn’t add up in your favor.
The Takeaway
FSBO might help you avoid paying a commission to a real estate agent, but when you factor in the expertise an agent brings to the table and the higher price they’ll be able to get for your home, FSBO isn’t a way to save money. In fact, it’s the opposite.