Have You Done a FSBO? Did It Go OK?

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Have You Done a FSBO? Did It Go OK?

Postby Van » Wed May 01, 2013 9:24 pm

I just planted a FOR SALE BY OWNER sign in front of an unoccupied condominium owned by my wife and me. We are trying to sell it on our own to save the 6% fee charged by a realtor. However, we are rookies. So, I would welcome learning about the experience of others.......good or bad.

Our plan is to use a title company to handle the agreement of sale and the settlement.
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Re: Have You Done a FSBO? Did It Go OK?

Postby squeakywheel » Wed May 01, 2013 9:42 pm

We bought our current home in a FSBO transaction. It went very smoothly and it was wonderful to have no realtors involved!
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Re: Have You Done a FSBO? Did It Go OK?

Postby LadyGeek » Wed May 01, 2013 9:50 pm

This thread is now in the Personal Consumer Issues forum (selling a house).
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Re: Have You Done a FSBO? Did It Go OK?

Postby rickmerrill » Wed May 01, 2013 10:03 pm

I think your plan is ok as long as you can attract buyers. It is some work but you should look for any way available to advertise it. I once lowered the price by half the cost of an agent and sold within 10 days. We priced it reasonably, held on open house, got everything fixed up and clean and advertised every way possible. Our buyer came to the open house and made a good offer. I think we had 3 offers from that so the plan worked. Agents have the advantage of the MLS system so you have to compete with price, condition or location to find buyers that are ready to jump on a good deal. If you cannot offer a good deal you may need the help of an agent to provide more foot traffic. You will know pretty soon how well you priced it.
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Re: Have You Done a FSBO? Did It Go OK?

Postby Scooter57 » Thu May 02, 2013 9:57 am

If you go this route, you need to consult a local real estate attorney BEFORE you get an offer so that you a) have the appropriate forms with which to respond to the offer in a legal manner. Ideally you will get your buyer to use your forms to make the offer and b) have the the forms you will need once the offer is accepted and going to contract. Having a lawyer supply these form can prevent you from making what could be a very costly mistake if you use canned forms or draw up your own contract.

Once you get an offer, if it isn't on a form you supply or if the buyer has modified the form, you should also have a real estate attorney review it. Ditto with the contract. Yes, you will pay for this, but it can save you a lot of money and heartache if you encounter a rogue buyer. Especially one who preys on people who sell their houses without understanding the terms in a contract.

Finally, do some serious Googling to determine if your buyer has a history of litigation. Ask your attorney to check this out for you, too. Someone I know sold a house to a buyer who had access to free legal services and a long history of suing anyone they had been involved in transactions with. Fifteen years after that sale, that seller is still involved in litigation regarding the sale.
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Re: Have You Done a FSBO? Did It Go OK?

Postby chabil » Thu May 02, 2013 3:36 pm

Hire an attorney to represent you and to go over all paperwork and contracts as soon as you get a offer. Ours said there is no fee until we close.
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Re: Have You Done a FSBO? Did It Go OK?

Postby BolderBoy » Thu May 02, 2013 4:01 pm

I've done two - buying and selling. Both went just fine. Sold to an attorney who hired his brother (a real estate lawyer) to handle his half of it, though I wrote up the contract (based on a previous, realtor-ripoff contract I had). He wanted an unusual payment arrangement, but it worked out fine ("bought" house in December, I moved out, he moved in and closed in August with a friend acting as proxy.) Bought from a fellow who had "mentioned" to a friend-of-a-friend that he wanted to sell and I got to him before he talked to a realtor and convinced him he could do a FSBO without trouble since I was the perfect buyer *and* he'd save the "commission". He was pretty freaked out about it and demanded a large earnest deposit - no problem for me; I wanted his house.

I tried to do a FSBO buy from a woman who had fired her realtor. Explained everything, yada. She stupidly hired another realtor and though I ignored the realtor and talked with her directly, pointing out she was going to pay him for nothing. If she'd hired a lawyer it would have been vastly cheaper. At closing she was FURIOUS that she had to pay the scab many $10s of thousands for "nothing" (her words.)

There are also very low cost alternatives out there, who will help you minimally, but get you in the MLS. If you are selling it is mostly about LLL.

Good luck.
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Re: Have You Done a FSBO? Did It Go OK?

Postby Atilla » Thu May 02, 2013 4:20 pm

Did it in 2001, went fine. We listed the place online on a local FSBO site and sold it in 2 weeks. Wife at the time was a lawyer, so she was able to give the legal hairy eyeball to all the paperwork. Cost to list on our own was a couple hundred bucks vs. the $8k or so commission the greasy salesman would have wanted.
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Re: Have You Done a FSBO? Did It Go OK?

Postby mlipps » Thu May 02, 2013 6:24 pm

If you live in a city with Redfin, you might not even need the MLS. I live Redfin and it pulls from FSBO sites in addition to normal listings.
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Re: Have You Done a FSBO? Did It Go OK?

Postby Peter Foley » Thu May 02, 2013 6:44 pm

I have done four, all many years ago. Two buys, two sells. They all went fine. For one of the sells, I did it a couple years after going through realtor training and having passed the exam. I felt I knew what I was doing when it came to the purchase agreement. The buyers did not have an agent either. We worked out a purchase agreement and I encouraged them to run it by an attorney before signing. The attorney advised them that I had treated them fairly with the traditional division of buyers and sellers closing costs. I was probably lucky nothing went wrong, but it really wasn't hard if you knew what current practices were.
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Re: Have You Done a FSBO? Did It Go OK?

Postby RenoJay » Thu May 02, 2013 8:08 pm

I did a purchase as a FSBO and later sold the same house FSBO. I was in Chicago at the time and there was lots of FSBO activity. When I lived in the Bay Area, however, everyone used a Realtor and it seemed it would be hard to get attention without one. So I think it depends partly on location.

If you do it, the best thing I learned from the top Realtor in the area I grew up is not to follow the potential buyers around the house and also to stop talking. Just smile, invite them to look around, and let them know you're happy to answer any questions. Then stop talking and don't follow them. Few things mess up a buyer's vision of how they'll love a house than a salesman squawking in their ears and hovering over them.
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Re: Have You Done a FSBO? Did It Go OK?

Postby WhyNotUs » Fri May 03, 2013 1:03 am

I have done it and had it go fine, however there is a lot more to a sale than getting a contract, there is title commitment, disclosure, closing arrangements. Title company does not deal with creating your contract. It is not like a realtor does nothing. If you are comfortable with negotiations, following a not-that-complicated process, know or can find a good title company to work with, and can read and understand a title policy then you can do it. If not, a couple hours with a real estate attorney is money well spent to get a good contract/disclosure, good title policy, and good closing. You can get a FSBO book from your local library "House Selling for Dummies" for instance that will have a nice checklist.

It would have been ideal, before you planted the sign, to get a valid contract, disclosure, ID title Co., and create a checklist for what you will do and what the buyer needs to do. You may be asking them to leave their comfort zone and if it seems like you have your act together they are more likely to make an offer. I would also put together a property sheet-- Name, contact info, address, price, zoning, Tax ID #, list of features and fixtures included, a couple photos, and neighborhood benefits. A couple comps if they are favorable to your case.

Expect many of the first responders to be realtors. Have a set message to give them and do not stray. They will ask, "Am I protected if I bring you a great buyer?" That means will you pay me 3%. Know your answers in advance and be firm. Second responders may be lowballers, sniff them out and tell them you do not want to waste their time. Looky-Loos are common as well, sniff and send them on their way. You will know them after a few.

Once you get interest, have an agreed upon bottom line before you entertain offers. It is possible that you will not get a full price offer :wink: need to discuss your bottom line in advance. Similarly, you may get an offer that is contingent- full price once I sell my house, lease/purchase, full price with new roof, etc. The buyer is likely to need an inspection and appraisal, they may come back with an inspection report that finds something that they demand fixed and you have agreed on a price, it could appraise low. A good realtor helps to ID inspection issues and set a price that can meet appraisal so you will need to know how to proceed. Once again, the Eric Tyson book mentioned above can help you create a process that will give you and buyer more confidence, even if it is false confidence.
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Re: Have You Done a FSBO? Did It Go OK?

Postby freebeer » Fri May 03, 2013 10:08 am

I have sold twice and bought once FSBO and it went fine. Market the property on whatever online sites are available in your area: Redfin, Zillow, craigslist, etc and as others stated, decide if you want to "coop" i.e. pay 3% to a buyer's agent. I recommend "yes" to stimulate interest and in that case you can get your home on the MLS system through one of the above. Often you can find all the standard Realtor contracts online, while it may be questionable to reuse them due to copyright you can at least eyeball them (google "northwest multiple listing service purchase and sale" for example and you find them for the Puget Sound area). If a buyer's agent does come in they will probably prefer such a locally common form of agreement (assuming you are not in an area where attorneys generally get involved in residential real estate deals).
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Re: Have You Done a FSBO? Did It Go OK?

Postby Dulocracy » Fri May 03, 2013 12:56 pm

In my line of work as an attorney, I see a lot of real estate sales. My opinion is typically that the realtor is worth the cost for most people. This worth does not come from the money as much as the time. On average, I think you get 8-10% more from the sale of a property when using a realtor. The real value is that the house tends to sell much more quickly when there is a realtor. Does this mean no one can beat the odds? Not at all. Many people that I see go FSBO are not putting in the time, effort, and research into what to do. A realtor has training, a network, and contacts that help them. They are also experienced at doing comps and negotiating prices. My partner (an attorney) did a great job negotiating a purchase of a property without a realtor. Listing would require you to get on the FMLS or MLS (depending on which is prevalent in your area) to truly get good exposure. Also, you may want to consider putting "broker protected" in the listing (giving realtors an assurance that you will pay their commission if they bring their client to you). Yes, you would still be giving up about 3%.

Why? If you want to sell quickly, you want all possible buyers to see your property. If you are a realtor showing a family homes, are you going to do business with a FSBO when you suspect they will not pay you? Some people do not realize that the buyer's agent typically gets 1/2 the fee that is the realtor's fee.

Most people are better off simply hiring a realtor. If you are willing to do your homework and put effort into it, you can put yourself in a better situation than you would be if you paid 6-7% to a realtor.
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Re: Have You Done a FSBO? Did It Go OK?

Postby Frugal Al » Fri May 03, 2013 1:31 pm

I've sold two homes FSBO--both went well. I'll be selling my current home FSBO as well. When I sold my condo I got the highest sales price to date. The interesting part is that a very popular real estate agent brought his girlfriend by to see the place. I told him I wouldn't pay a commission. I told my wife we'd probably never see him again. A few weeks later we were in contract. I think it depends a lot on the house and the local market. In some markets it is tough to sell anything. It takes planning, effort, and time. I've seen too many friends be promised the world by realtors only to have them be ineffective and lazy once they get the listing, relying only on the MLS.

On the down side, you will be hassled a lot by realtors. I've even had two signs stolen--my neighbor described one theft by a man in a van that was the same color and make as that belonging to a realtor who'd asked for a listing. I think if you have a decent home in a popular area with good sales it's definitely worth a try.
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Re: Have You Done a FSBO? Did It Go OK?

Postby drew1976 » Fri May 03, 2013 2:02 pm

Bought our current house FSBO.

They had it listed with a realtor, then got sick of dealing with realtors and put it FSBO. They didn't have a good marketing strategy. My wife found it on Craigslist of all places. Price we paid was about 65K less than they had it listed with the realtors. Properly staged and spruced up, they could have gotten extra 65K easily.

The closing went by without a hitch, whereas our selling our previous home through a realtor was a nightmare.

I will still probably sell with a (much better) realtor. I don't have any patience to suffer fools and for a 500K house, FSBO just doesn't get it done in this market.
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Re: Have You Done a FSBO? Did It Go OK?

Postby Van » Fri May 03, 2013 8:46 pm

Thanks everyone for the interesting, thoughtful and informative replies.

Many of your comments were oriented toward helping with the marketing aspect of FSBO, i.e. finding a buyer. These were very informative.

However, I'm also very interested in the process that occurs after you have identified a serious buyer. Did you hire an attorney to do the AGREEMENT OF SALE or just down load something from the internet and fill it out yourself? After the agreement of sale was signed, I believe a TITLE COMPANY can handle everything else. Is that correct?

Thank again.

Van
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Re: Have You Done a FSBO? Did It Go OK?

Postby SVT » Fri May 03, 2013 11:24 pm

Van wrote:However, I'm also very interested in the process that occurs after you have identified a serious buyer. Did you hire an attorney to do the AGREEMENT OF SALE or just down load something from the internet and fill it out yourself? After the agreement of sale was signed, I believe a TITLE COMPANY can handle everything else. Is that correct?

Van


I sold my house a couple years ago as a FSBO. I just stuck a sign in my yard and posted a few Craigslist ads over the span of the 7 or so months it took to find a buyer. I wasn't in desperate need to sell so I didn't really do much to try to find a buyer.

Anyway, yes, I hired an attorney after the buyer and I decided on the sale price so he could do the contract. The fee for it was only like $200 versus paying 5% or so commission on a $220k house. And yes, after that, the title and mortgage company can take care of the rest for the buying side of things, at least that's how it worked in the experience I had.

Everything on my side went extremely smooth.
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Re: Have You Done a FSBO? Did It Go OK?

Postby beachplum » Sat May 04, 2013 12:34 am

I am also in the process of getting my house ready to sell and finding it a bit nerve racking deciding between FSBO or using a realtor. I live in a very popular neighborhood in my town and houses that are priced right sell immediately. There aren't enough houses for the amount of buyers. The difficulty I have is spending 5%/$25,000 commission to a realtor for a house that presumably will sell quickly.
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Re: Have You Done a FSBO? Did It Go OK?

Postby denismurf » Sat May 04, 2013 2:47 am

There are also discount and flat fee brokers and real estate lawyers to consider. I've used these, but never gone FSBO all the way. You have to do some stuff yourself, like show the house sometimes, but you're getting paid very well in the form of a discount from the full service commission.

Based on a lifetime of experience involving many house buys and sells, I'd advise going discount unless you are personal friends with the family and close business associates of the "full service" broker you choose. Let that broker know that his people will hear about any trickery, threats, shoddy work, or outright lies that broker lays on you.

Yes, I have a lot of stories to tell about realtors, but this forum is not the place for them.
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Re: Have You Done a FSBO? Did It Go OK?

Postby jon-nyc » Sat May 04, 2013 5:06 am

I'm not a fan of FSBO. I've generally avoided even looking at them as a buyer. In my experience they tend to be overpriced.


Re the second question a lawyer should be able to handle that for you. In this market they would anyway, even if there was a realtor involved. I understand that practice varies considerably by locale.
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Re: Have You Done a FSBO? Did It Go OK?

Postby BolderBoy » Sat May 04, 2013 5:18 pm

Van wrote:However, I'm also very interested in the process that occurs after you have identified a serious buyer. Did you hire an attorney to do the AGREEMENT OF SALE or just down load something from the internet and fill it out yourself? After the agreement of sale was signed, I believe a TITLE COMPANY can handle everything else. Is that correct?


That's how I've done it in the past - Title Company took the contract and pulled out all the numbers for the closing documents. In a previous post, I made this sound very easy, because I did it many years ago. Times have changed and the legislature here has made the seller liable for all sorts of things now in terms of disclosures to the seller - disclosures that have the teeth to come back and get you years later.

To that end, hiring a lawyer may not be a bad idea to make sure all the issues are covered before closing. A lawyer would have obligations to you that a realtor may not.
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Re: Have You Done a FSBO? Did It Go OK?

Postby birdy » Sat May 04, 2013 9:08 pm

The last home we sold was by using a "do it yourself" company called For Sale By Owner. For an upfront fee they came and took pictures of the house, put it on MLS, and gave us a packet of forms and directions on how to do everything else. I have to tell you it worked out really well for us. We had 3 "open houseses" which took up our time to sit in the house during the open house time period. We sold our house for what we expected (and no % to realtors) and within 2 months. Granted our home was only worth about $100,000. so it was no million dollar home (which we would be too frugal to buy!). I am a people person so it really didn't bother me to deal with potential buyers. The couple which ended up buying our home called with a real lowball offer. I handled it by saying thank you for the offer and telling them goodby. I didn't even try to dicker with them. 2 Weeks later they called back and offered very close to what we wanted! I wasn't going to go back and forth trying to justify why my home was worth what we wanted for it, I guess I just (dumb?) "knew" someone else would come along who would love it as much as us (plus we qualified for a loan on our new home with out having to sell the old one, which took the pressure off to take any offer that came our way).

Our friends couldn't believe we sold it ourself--but why not at least try?!!

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Re: Have You Done a FSBO? Did It Go OK?

Postby TheGreyingDuke » Sun May 05, 2013 5:19 pm

Dulocracy wrote:In my line of work as an attorney, I see a lot of real estate sales. My opinion is typically that the realtor is worth the cost for most people. This worth does not come from the money as much as the time. On average, I think you get 8-10% more from the sale of a property when using a realtor.


I recall seeing some research in the WSJ that was done in Chicago. It showed that realtors selling their own houses got a much better price for them as compared to the prices they got for customers' houses. No surprise, the incentives are powerful for the agent to get a sale, any sale, rather than risk losing the sale to another agent. An extra $10 pr 20K only means an additional $600-$1200 in commission, as opposed to the $18,000 that would be earned on a $300,000 sale.

I have sold X2 FSBO, no big deal, used on line forms, had an attorney to a check over, sold once directly to buyer, once to a couple that was out of town and hired an agent, they paid whatever commission e earned.
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Re: Have You Done a FSBO? Did It Go OK?

Postby wilpat » Sun May 05, 2013 7:07 pm

I sold one a few years ago and it was successful. The buyer came through a real estate agent and she asked me if I would pay her the buying agents 1/2 of the normal commission if she handled both sides of the sale. I trusted her and did as she asked and I was very happy with the result.
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Re: Have You Done a FSBO? Did It Go OK?

Postby frugaltype » Sun May 05, 2013 7:30 pm

I did it. I had an excellent real estate attorney who charged me $2000 for all the paperwork (lots of that in California) and advice.

I didn't do any advertising. The housing market in that area was a seller's market, so I just told people in the neighborhood and who I knew.

I went FSBO, because the agent I had used to buy that, my first house, was horrible.
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Re: Have You Done a FSBO? Did It Go OK?

Postby EmergDoc » Sun May 05, 2013 7:35 pm

I tried a FSBO in 2010. I had the house under contract at a great price within 2 weeks. Then the buyer fell through. It turned out their realtor didn't really make sure all the financing boxes were checked before doing the contract. Then I went another few months without another offer. I ended up hiring a realtor who did even worse than I did. (couldn't get it under contract for 20% less than I initially had it under contract for.) It's now an investment property. I don't regret trying the FSBO, but I do regret sticking with the realtor for so long in what was obviously a crappy market. Should have made it a rental sooner. I ended up eating the costs for over a year. It wasn't that expensive, and much of it was deductible, but it still sucked.
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Re: Have You Done a FSBO? Did It Go OK?

Postby zed » Mon May 06, 2013 8:22 am

Lots of good suggestions here.

We did it in 95 and 96. It worked out fine in both cases.

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Re: Have You Done a FSBO? Did It Go OK?

Postby johnep » Mon May 06, 2013 8:47 am

We seriously considered relocating after I retired and looked at homes in two different markets for several months. We used realtors in both cities for our search. I saw many FSBO signs but never considered inquiring about any. My experience over the years dealing with FSBO sellers is that generally speaking they tend to be looking at top dollar for their homes and can be difficult to negotiate with. It often creates an uncomfortable buying process so why bother. IMO, I think a good realltor can help sell the house faster, make sure it is priced correctly, and make sure the sales process is done correctly pre-attorney closing. I think these are all challenges to doing a FSBO that many underappreciate.

That said, I sold our first home as FSBO about 40 years ago. I sold to someone who had a realtor as agent and I paid the 3% commission. That process went very well. I also sold a building lot without a realtor about 10 years ago. I was a little naive and did not insist upon closing within a specified time frame and the buyer drug their feet in getting a loan. It took me a while to get them to close costing me extra interest on my lot loan.
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