4 Questions to Ask Yourself Before Trying “For Sale By Owner”

4 Questions to Ask Yourself Before Trying “For Sale by Owner” (Image Source: Wikimedia Commons)

Say “FSBO” out loud, and it sounds eerily like “Fizbo,” the clown Cameron plays on the show Modern Family.

But this FSBO -- “For Sale By Owner” -- can turn out to be anything but funny.

In today’s market, with homes selling quickly and prices rising, many homeowners are opting out of using the services of a real estate professional in favor of “For Sale by Owner.”

People who decide to go this route believe it’s a simple process. It’s probably just numbers crunching, and you’re good at math. You need a lawyer, but your cousin is a corporate attorney who must know real estate, too.

But before you turn selling your home into a do-it-yourself project, ask yourself the following four questions.

1. Are you good at negotiating?

The list of people with whom you’ll need to negotiate is very long. This will more fully explain the parties involved, but here are just some of them:

  • The buyer, who wants the best deal possible
  • The buyer’s agent, who solely represents the interests of the buyer
  • The buyer’s attorney (in some parts of the country, and certainly in Illinois)
  • The home inspection companies that work for the buyer and will almost always find problems with the house (because that's their job!)
  • Your buyer’s buyer when the sale of your home is contingent upon your buyer’s sale
  • Your buyer’s lender (at times the structure of the mortgage requires the participation of the seller)
  • The appraiser, if there is a question of value
  • The town or municipality if you need COs or permits

2. How do you find potential buyers?

Recent studies have shown that 88% of buyers search online for a home. That’s in comparison to only 21% looking at print newspaper ads. Most real estate agents have an internet strategy to promote the sale of your home. The Real Group Real Estate Team syndicates across almost every real estate website on the Internet. Do you?

3. What are your online resources?

Not only do prospective buyers search for homes online, that is also where 43% find the home they end up purchasing. An additional nine percent find their home from a yard sign, and one percent find their homes from a newspaper ad. The joke about “What’s a newspaper?” is, unfortunately not a joke. Having a strong Internet presence utilizing several platforms is essential.

4. How can you net more money?

Many homeowners believe they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is that they also believe they can save the real estate agent’s commission. But the seller and buyer can’t both save the commission. Studies have shown that the typical FSBO house sells for $208,000 while the typical house sold by an agent sells for $235,000. This doesn’t necessarily mean that an agent can get $27,000 more for your home, as studies have shown that people are more likely to FSBO in markets with lower price points. However, it does show that selling on your own might not make financial sense.

Bottom Line

For Sale By Owner is becoming increasingly difficult. The paperwork involved in selling and buying a home has increased dramatically as industry disclosures and regulations have become mandatory and as ways of attracting buyers have become more complicated and strategic. These are two of the reasons that the percentage of people FSBOing has dropped from 19% to 9% over the last 20+ years.

Those sellers have decided that FSBO should perhaps be left to Modern Family.

If you have any questions about FSBO or any other aspect of selling your home, send us an email or give us a call and we’ll be happy to answer them.

Real Group Real Estate

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Chicago, IL 60614

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