Selling your own home can save you money. But there are trade-offs, and things to keep in mind. “For Sale by Owner” is often referred to as FSBO, pronounced “fizbo.”
People who sell their own homes without using a real estate broker or agent can avoid paying commissions. Commissions usually range from five- to seven-percent of the sale price, which would range from $12,500 to $17,500 on a $250,000 home.
You can subtract this amount from the sale price of your home, in order to sell more quickly. If the house sells for what you owe on the mortgage, you can avoid dipping into your own savings to pay the commission. Or, you can just keep the money.
For Sale by Owner
Eighty-one percent of home sellers use full-service realtors. Nine percent sell their homes with the help of limited service providers, including discount brokerages. The remaining nine percent sell their homes by themselves.
When Is FSBO a Good Idea?
If you can afford to wait for a buyer, are prepared to market your home effectively, and aren’t afraid to do the work and the paperwork yourself, it can make sense to sell your own home. Experts say this can be a good strategy when your home is in a good area, of a popular size that is in short supply, and is priced correctly and affordably.
Set a Price
Sites like realtor.com, zillow.com and homegain.com can help you review comparable real estate listings available in your neighborhood. You can also ask a realtor to provide a comparative market analysis. Realtors are usually willing to do this for free, even if they know you plan to FSBO. They know you will turn to them if you are unsuccessful.
Use the Internet
Eighty-five percent of home-buyers start their searches online. Take the time to create a good profile for your house that can be posted to free sites like Craigslist.com. Other sites will host your profile for a small fee, often offering home-selling tips and services.
The Multiple Listing Service (MLS) is a directory that targets realtors. Only realtors can list homes on MLS. However, there are limited services providers that will list your home on MLS for a fee. If an agent finds your home on MLS and the agent’s client buys your home, you must still pay the buyer agent’s commission of 2.5 to 3 percent.
Face the Paperwork
The forms required to sell a home differ from state to state, and are available on your state’s website. Although you may feel confident working with these forms, it is a good idea to have them looked over by a lawyer at each stage of the process. A lawyer’s services might cost you about $1,000 of the money you save by selling your own home.
A Real Estate Lawyer Can Help
The law surrounding the sale of a home can be complicated, especially when you are selling the home yourself. Plus, the facts of each case are unique. This article provides a brief, general introduction to the topic. For more detailed, specific information, please contact a residential real estate lawyer.