Thinking of Selling Your Own Property (FSBO)? Test Your Negotiation Skills

Thinking of Selling Your Own Property (FBSO)? Test Your Negotiation Skills

After a few down years, our Chicago-area housing market is thriving, and plenty of homeowners are curious about what it takes to sell their home. While most come to us for our bevy of experience helping homeowners sell their old properties and secure new ones, we have also spoken to homeowners who are curious about what it takes to sell their home on their own as a FSBO (For Sale By Owner) property.

We're happy to give them the full scoop! The reality is that FSBO can be quite difficult, and we always recommend that a homeseller bring on the services of a qualified real estate professional.

Why is venturing into a real estate transaction without the aid of a real estate professional so risky? In addition to their access to industry connections and helpful listing services, real estate agents are trained in negotiation tactics, while in most cases, sellers are not.

Can You Negotiate Like an Agent?

In order to get best deal for yourselves and your family, determine whether or not your negotiation skills are where they need to be.  Here is a list of some of the people you must be prepared to deal with as a FSBO negotiator, with our thanks to the KCM blog for a few ideas:

  • The Buyer - They want the best deal possible, and you can be sure they will use any tactics at their disposal to get what they want.
  • The Buyer's Agent - The agent represents the best interest of the buyer, and is a trained negotiator. As an unrepresented seller, you're now negotiating with a professional negotiator.
  • The Buyer's Attorney - In Illinois, close to 100% of buyers are represented by an attorney in the transaction. They'll have a few topics for you to discuss as well. How versed are you in contract changes, insurance, and other matters of esoteric real estate law? 
  • The Home Inspection Company - Home inspectors will almost always find problems with your house. Be prepared to refute, address, or compensate any claims made. A good listing agent will put these in context to diminish the impact on the home seller's bottom line.
  • The Buyer's Lender - Does the structure of the mortgage require the participation of the sellers? If so, this is another party you must be prepared to negotiate with.
  • The Appraiser - If there is a question of value on the home (particularly after a home inspection), you'll likely deal with an appraiser who will do all they can to refute your price claims. They're also working in the best interest of the buyer.
  • The Buyer's Buyer - If there are challenges on the house the buyer is selling, it's possible you may end up dealing with this remote group. Will you accept a home sale contingency, a home close contingency, a home sale mortgage contingency, or will you eliminate that entire pool of buyers?
  • The Bank - In the case of a short sale, you'll have to convince your mortgage bank(s) to accept a reduced payoff amount.
  • The Title Company - If you have challenges with the certificates of occupancy (CO) or other permits, expect a visit from them.
  • The Town or Municipality - If you need to get COs or permits mentioned above, you'll have to pay a visit to these parties.

Unfortunately, this list is on the short side. It can get exceptionally complicated for homeowners who are self-representing. Even if you do manage to handle the negotiations well, remember that a substantial amount of paperwork will go along with the negotiations - and any document that is completed incorrectly can jeopardize the entire process and set you back at square one.

Why Hire a Real Estate Professional?

Selling solo can be done, and we know some superhumans who have been able to successfully sell their home on their own without too many setbacks. This is not the norm.

Real estate agents allow for a faster and smoother process - and a more lucrative one at that! For example, if you do manage to attract buyers to your FSBO, they're likely to be represented by an agent, as we mentioned earlier; this means that the buyers will expect you to be compensating their agent with a 2.5 - 3% commission, just as a "listed property" would. That's half the money you'd pay to simply hand it off to a full-service real estate professional! And this is to say nothing of the fact that, according to some reports, the typical FSBO house sells for $208,000 while the typical house sold by an agent sells for $235,000.

You don't have to go it alone! Your real estate agent is a key ally and a friend every step of the way, one who provides keen insight and guidance, a steady hand, access to online resources, and a skillful voice at negotiations.

Curious what it will take to FSBO your home, or would you like the aid of a real estate team? We are happy to answer your questions! Don't hesitate to send us an email or give us a call - we'll be happy to help.

Real Group Real Estate

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2526 N Lincoln Ave
Chicago, IL 60614

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