When you decide to sell your home on your own steam, you go into a category called “For Sale By Owner” (hereon referred to as FSBO).
Most FSBOs feel that removing the realtor’s commission from the cost of selling one’s home is a big win. On a residence of $300,000, for example, it represents an enticing dollar gain of $9000 (3%). Some, in their excitement, misconceive that it’s 6% (i.e., $18,000). The chances are nine to one against you that buyers will consider a home purchase unaccompanied by a realtor whom you, as the seller, must pay. Also, most FSBOs going in consider themselves able to do what realtors routinely do for their clients. Let’s see how logical this train of thought is.
How can I promote my home as an FSBO?
Well, these days, more or less the same way as traditional realtors – on the multiple listing (MLS). You can pay a flat-fee realtor ($200 hundred dollars or so) to give you an MLS entry. That realtor is not yours for negotiating or receiving buyer queries. Once on the MLS, you’re on your own.
What does the MLS fee buy you?
- A presence along with other listings on Zillow.com – the #1 real estate website. It reflects 30 million unique visits per month.
- Ability to follow the lead of traditional realtors who broaden the promotion considerably by including other sites, like Trulia, Craigslist com, Redfin, and Yahoo! Real Estate.
What does the data show about FSBO?
As an FSBO or a seller with traditional realtor representation, you’re likely to see a 7- 12% reduction in the offer price on the day the deal closes for various reasons (provided below).
- As an FSBO specifically, studies show that your offer price in the first instance is likely to be relatively less than a traditional seller – sometimes significantly so.
- The same studies show that an FSBO home takes substantially longer to sell than when a realtor gets behind the deal (by at least twenty days). It’s widely agreed that the longer it takes to sell, the more it works against your asking price.
So, it seems like the initial 6% commission saving incentive for the average FSBO seller is generally wiped out by the hard lesson that hiring a realtor indeed provides relative value for money. It’s the case most of the time for compelling reasons, with one notable exception.
FSBO’s best chance of success
It’s in a seller’s market, where buying prospects are stepping over one another to beat other bids to the punch. The seller dictates terms, thus eliminating contingencies or anything else that may bounce the offer down the line. As a rule, obstacles in the way of a successful closing go away when many buyers chase a limited residence supply.
FSBO in neutral and buyer markets – the majority of cases
The ones Zillow rates as “Cold” or “Lukewarm.” The mood changes quickly:
- Buyers’ realtors can see right away when the Zillow listing is FSBO. They tend to steer clear of these listings because many of the items that sell a home quickly are not ones that a typical FSBO likes to spend money on. Things like curbside appeal, decluttering, staging, and basic renovation go wanting when FSBO is on the other side of the transaction.
- Dealing with the owner directly is fraught with disruptive emotional reactions – the biggest drawback of an FSBO listing. Prospects criticizing your color schemes, furniture, room design, outside decor (and worse), frequently create negative vibes when you hear it straight from the horse’s mouth. These, in turn, have the power to snuff out buyer interest before it gets any traction.
- When the FSBO home disappointingly commands only a few showings, it may spur you to renovate and clean things up. With no professional advice, you could end up spending too much and often on the wrong things.
- Then there’s the flurry of communications and events involved in a typical real estate transaction at different stages, especially getting prospects through the door and the crucial follow up. Mobile calls, emails, texts, first visits, next visits, show days, dealing with untidiness, pets, and kids. Someone experienced and unflustered to keep a sense of calm, objectivity, and the ball rolling reduces seller stress. Competent realtors know how to do that.
- Now a biggie – who’s going to guide you, as an FSBO, through the rest of the process?
Rest of the process? What “rest of the process?”
As a start, you’re probably signing a sale agreement peppered with contingencies.
- The buyer’s home inspection is a notable one, and it may eat a big chunk of the offer price. It depends on what gremlins are behind the walls, inside the ceilings, in the plumbing, outside in the pool, and what have you.
- Another one is the home not appraising well. In such an event, even a mortgage-approved buyer can’t secure the loan envisioned at the offer submission stage to get the deal closed. Unless you are ready to drop your price, or the buyer makes up the difference, the deal goes south.
- Finally, FSBOs tend to flounder when the inevitable nickel-and-diming by a seller begins. Seller’s optimism close to critical deadlines along the way provide an opening for buyers to turn the screws by throwing curve balls at seller weaknesses. Realtors, as an intermediary, know how to deflect such disruption most of the time.
OPTION #3 for home sellers – Sell to a Home Cash Buyer
There’s a great third option that zones in on all the shortcomings highlighted above with the FSBO and traditional realtor alternatives.
For those readers living in Birmingham, Alabama, in a quandary as to the next big step in selling your home, here’s a solution for your consideration. Home Buyers Birmingham is a reputable entity geared to counter all the realtor and FSBO weaknesses with genuine benefits that make sense to anyone. Don’t move forward until you have spoken to them about the following:
- Double the FSBO commission savings – for sure. With Home Buyers Birmingham, there are absolutely no realtors involved. You save 6% right out of the gate not paying closing cost, and there are no promotional costs on MLS if you’re trying to transact your residence yourself.
- Staging and storage costs, moving furniture in and out, kitchen and bathroom remodeling can be extremely costly. Forget about tidying up, renovating, and curbside appeal – this home for cash buyer sees past aesthetic turn-offs without penalizing you.
- Unlike the realtor and FSBO routes, the company’s inspecting team surveys the real estate for possible defects before the offer is submitted, so there are no after-agreement shocks. The bottom-line number you see is the money you know you’ll get. You can elect to repair or accept the buyer’s deduction and shift the repair responsibility and hassle to the pros.
- What’s more, a legitimate cash offer will be in your hands within a couple of days of phoning home Buyers Birmingham. After that, if you want to close fast, the money is in your bank account within seven days. There are no appraisal contingencies or mortgage lender quirks to worry about.,
- The deal is clean, with no after-the-fact second thoughts or whittling you down on the number initially presented.
- The company, as a quick-close buyer, is there to make a profit. Its representatives are quite transparent about it. At the same time, the commission savings, erasure of significant “get ready expenses” commonly alongside realtor assistance, and speed of closure make the bottom line competitive and mutually fair.
- There’s another massive advantage in dealing with an entity like Birmingham. If it suits you to close later, you will find them flexible and sympathetic to your needs.
- Signing a contract with Home Buyers Birmingham will give you peace of mind unattainable with traditional selling and the average seventy-day treadmill you step onto. Seamless negotiations are consistent with no small print or comebacks designed to trip you up.
Seller reviews place Home Buyers Birmingham on a pedestal as one of the best real estate companies in Birmingham to get the deal done. They take stress, aggravation, and angst out of the agreement without removing your monetary benefit. You know you can trust them to always be on the right side of ethical integrity and customer goodwill.