Deciding how to sell your home is one of the preliminary decisions you’ll have to make as a homeowner when you decide it’s time to sell your property. You can either choose the traditional hiring or listing your property on real estate websites. Alternatively, you can go solo and skip realtors by selling your home on your own. This is called “For Sale by Owner” or FSBO (pronounced FizzBo) in short.
Just like everything else, there are pros and cons of selling a house on your own. In this guide, we share with you the essential things to know about FSBO so that you can decide if it’s the right choice for you.
You Still Have To Pay Fees
The primary reason why home sellers ditch realtors are that they do not want to pay realtor commissions. On average, real estate agents charge 5% to 6% of the sale price as their commission. It’s easy to assume that selling by yourself means no fees. Well, the truth is that even when you go FSBO, you have to pay several fees like:
- Advertising – You need to market your home to attract the right buyers. Digital or offline advertising is expensive, and you have to bear it out of pocket.
- Legal expenses – Several states require home sellers to hire an attorney to handle real estate transactions. The attorney fees can cost anywhere from $500 to $1500, depending on where you reside.
- Closing costs – These expenses are around 1% to 3% of the sales price and is usually borne by the seller when going FSBO.
- Buyer’s agent costs – Even if you don’t hire an agent, chances are that the buyer brings in an agent. You may end up paying the buyer’s agent commissions.
If these fees bother you, you can consider an alternative selling route. Instead of FSBO, go with cash buyers. When you sell your home to cash buyers, you don’t have to pay extra fees. The buyer handles all the expenses, including closing costs, property transfer fees and more. You end up with 100% of the sale price in your pocket.
There’s No Guarantee Of A Quick Sale
Unlike a traditional sale, you don’t have the expertise of a professional real estate agent to help you make a quick sale. In FSBO, the seller sets the price. If you price it too high, then the property is likely to linger on the market for a long time. On the other hand, too low pricing could make you lose out on your profits.
So, before you decide the selling price, make sure to research “comps” in your area. Comps are similarly-sized homes in your neighborhood that have been recently sold, and this gives you a fair idea of your home’s value. Even when you price it right, you may have to wait for weeks or months to get the right buyer offers.
FSBO Deals Work But You May Have To Put In Extra Efforts
There is a wrong assumption that FSBO deals do not work or fetch lower prices. The truth is that FSBO deals work, but as a seller, you have to put in extra time, money and marketing to spread the word about your property. If you don’t have the time or money, the better alternative is to go for a cash sale. You don’t have to spend time and money on marketing or repairs with a cash sale. The cash buyer appraises your home and gives you a quote. If the price is fair, you can go ahead and complete the sale within a week (or even quicker) without any hassles.
The bottom line is that FSBO is a good choice if you have the resources and time to handle the sale on your own. If you’re pressed for time, the better option is to go for a cash sale and complete the transaction quickly and without any hassles.