Arguments for and against FSBO for house?

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Elena78
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Joined: Thu Jul 19, 2012 3:58 pm

Arguments for and against FSBO for house?

Post by Elena78 »

We are considering a move this summer and my husband is insisting that we save money by doing for sale by owner. I am curious what the bogle take is on this.

Here are the things to consider:

-We will be moving with an 8 week old baby and a toddler several states away.
-I handled the buying and selling of our past two houses, my husband was zero involved, so this will probably primarily fall on me and I feel like it will be too difficult with a newborn.
-We live in a pretty hot housing market and a house down the street just sold FSBO in a week.
-The sale price will probably be around $310,000 and we owe $255,000.
-We will be renting in our new location.
Atilla
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Re: Arguments for and against FSBO for house?

Post by Atilla »

Done the FSBO thing - it worked out great. House sold very quickly.

My only recommendation is to not bother with appointments because people never show up. Hold open houses on the weekends on your schedule and let the buyers come flocking. Hubbie can take the kids somewhere for a few hours while you show the house. :D
Carefreeap
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Re: Arguments for and against FSBO for house?

Post by Carefreeap »

Don't you just love it when someone who doesn't do the work insists that it's easy but it winds up being your job? :?

It doesn't sound like you want to do it. Who will be helping you with the various disclosures, contracts et cetera?
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Lafder
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Re: Arguments for and against FSBO for house?

Post by Lafder »

I would look into reduced fee or flat fee brokers that will list your house on the MLS and do paperwork for a sale. For different fee schedules they can do advertising and additional services. Where I live there are some who charge $500 and you get the professional assistance on all of the paperwork.

If I was doing FSBO I would test the waters for perhaps a week. A waiting buyer is either there or not. Then move onto some type of MLS listing to access the data base realtors and many shoppers use for themselves.

Yes FSBO saves fees. But there is a potential benefit to allowing a professional be sure all of the necessary steps are taken care of.

In a hot market, the house should sell faster and take less work.

Note some flat fee brokers do not do a great job. A house near me listed with a flat fee broker who put the sign in a hard to see place and only had 3 poor photos. They are now listed with a full service realtor and the sign is visible and there are over 20 nice photos. (I have seen awful listing photos by realtors too)

I would not want to do FSBO with an infant. Imagine trying to show the house and the baby is sleeping, or wakes up. You must be both the mom and the saleswoman.

There is always a chance a buyer will come with their own realtor. In which case I would be glad to pay their commission for the work they do for me as a FSBO.

Note buyers know you are saving on commission and mentally deduct that from the offer, in my experience.

Plus = save fees
Negative = you work for the $ you save, chance for mistakes that could cause the deal to fall through, sale may take longer if not in the multiple listing service with more accessibility to all realtors

My 2 cents.
lafder
Spirit Rider
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Re: Arguments for and against FSBO for house?

Post by Spirit Rider »

My opinion is that the potential benefit of FSBO follows the Goldilocks Principle.

How is the housing market where you live? Is it too hot? (many more buyers than sellers), is it too cold? (Many more sellers than buyers), or is it just right (just enough more sellers than buyers to make sales easier).

FSBO works best in a just right environment. If it is too hot or too cold, you are better off with the market reach and market awareness of a Realtor. I am familiar with both sides of this with my first house. Both the FSBO purchase and FSBO sale were in lukewarm markets. However, I have seen many others try, with the majority being less than successful in hot and cold markets.

Now the rest of the story unrelated to the questions: Myself and my then Fiancé looked at almost twenty (20) houses. They were either dumps or beyond our price range. (we were at the bottom end of the price range) We gave up until my sister saw a FSBO listing in the local paper. When we walked in the door my fiancé just about broke my ribs with her elbow. (it was perfect) Needless to say we bought the house. (the buyers paid five (5) of the six (6) points of the VA loan. When. we first went to the house after closing there was a bottle of champagne and a nice card on the kitchen counter. We also sold FSBO and extended the same gesture.
Jack FFR1846
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Re: Arguments for and against FSBO for house?

Post by Jack FFR1846 »

If you husband wants to FSBO, tell him that it's fine.....since he will be doing all the work.
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desiderium
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Re: Arguments for and against FSBO for house?

Post by desiderium »

I recently sold a home in a relatively hot market. There were 4 offers and the broker helped foment competitive bidding. I think I did much better in this case with a broker.
sharpjm
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Re: Arguments for and against FSBO for house?

Post by sharpjm »

3% of $310,000 = $9,300. This is how much you stand to save.

Working together, that is $4650 per spouse.

Tell your husband you required $4,650 worth of gifts/spa treatment to pay for the extra work you're doing by going it alone.

:happy
Xpe
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Re: Arguments for and against FSBO for house?

Post by Xpe »

sharpjm wrote:3% of $310,000 = $9,300. This is how much you stand to save.

Working together, that is $4650 per spouse.

Tell your husband you required $4,650 worth of gifts/spa treatment to pay for the extra work you're doing by going it alone.

:happy
That's if you still get 310k selling it FSBO. May or may not be the case.
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AAA
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Re: Arguments for and against FSBO for house?

Post by AAA »

My only such experience was selling a small condo almost 30 years ago. There was an interested party but they balked at filling out the form for their financials. I tried to explain that if we go ahead I'd have to take the condo off the market for several weeks and wouldn't want to do that just to find out that they couldn't afford the place. I could understand someone's reluctance to give such personal information to another private party. I'm guessing that if a real estate agent presented them with the same form, they might have filled it out. Ended up getting an agent who gave us a discount as she was selling several units in the condo building.
texasdiver
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Re: Arguments for and against FSBO for house?

Post by texasdiver »

I did a FSBO about 12 years ago and ended up contracting with an agent to assist with the paperwork for a 1% fee. Not having sold a house before it was well worth the price as she walked me through the whole process, knew all the parties involved like inspectors and title company, had all the necessary blank forms, etc. As it turns out, I put the ad in the the afternoon paper on a Friday and talked to her that afternoon. She came out, looked at the house, agreed to take 1% at the price we had advertised it at. Then she told us she already had a couple who might be interested and by 6 pm we had a full-price offer from her couple. I was more than happy. Did we leave money on the table? Perhaps. But on the other hand, we were leaving Alaska in a month and had a 1 month old daughter and I had better things to do with my last month in Alaska than worry about getting the house sold.

The second time we sold a house we used a realtor but that was because we were both working full time and lived in a gated community and it would have been very inconvenient to try to show the house and there was no opportunity for drive-by shoppers who had no way of getting past our neighborhood gate to see it.

If you have the time and showing it will be convenient I see no reason why not try. You can always list it later if you want to, or if you move out before it is sold.

PS, it has been my experience that buyers will expect something of a FSBO discount. At least that's how I was when shopping around and looking at FSBO homes. I wasn't interested in even looking at them unless the price was so attractive I couldn't pass it up. You'll want to do a really professional presentation with a flyers and a web site with lots of photos and that sort of thing.
Topic Author
Elena78
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Re: Arguments for and against FSBO for house?

Post by Elena78 »

Thanks for all of the input! I looked at the comps today and our exact same floor plan with the exact same builder (it's a 3 year old house) built two years before ours sold for $316,000 two blocks away. Our same floor plan being built as a new construction in a nearby community is selling for $365,000. So, I might be a little low on the sale price.

The realtor we used to buy the house is a family friend and in the top 1% in the state so he knows what he is doing (and that is who we would use if we used a realtor).

I like the idea of trying FSBO for a few weeks and then switching gears if we aren't getting anything. I also like the idea of paying someone to help with paperwork so we save some money but also some work.
SimonJester
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Re: Arguments for and against FSBO for house?

Post by SimonJester »

With a newborn and moving across country, no way... no way at all...
How new is newborn, are you not already sleep deprived, scattered brained, walking around like a zombie?

I cant even remember the first three months after my first was born, its all a blur. One funny story my wife starting filling up the sink for dishes, got side tracked checking on our son, ten or fifteen minutes later we had a lake in the kitchen. Good thing it was a ground level apartment.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
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soaring
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Re: Arguments for and against FSBO for house?

Post by soaring »

You can save 50% of the costs yet get the benefits of listing in MLS, realtor.com, etc by listing with a flat fee realtor. A few states do not allow this but many do.

I've sold 3 homes using this method and every time the buyer found me thru realtor.com so I saved almost 100%. I paid $299 for one yr listing with flat fee realtor...just google that with your city/state to find them. with ___% to the buyers agent (you aren't paying the listing agent a % just the flat fee.

Because you are in the MLS & realtor.com you will sell much much fast than FSBO.
Desiderata
ourbrooks
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Re: Arguments for and against FSBO for house?

Post by ourbrooks »

In most states, the seller pays the commissions of both the seller's agent and the buyer's. That's why they claim a buyer's agent is "free" for the buyer.

Nowadays, commissions are negotiable. That being said, most people end up paying the full 3% commission to the buyer's agent. You want an incentive for the buyer's agent to show your house and not to negotiate too hard on price.

Commission or no, selling is a hassle. If nothing else, they advise you to be out of the house when a buyer is touring. An agent calls at 7 p.m. and says they have a hot prospect who wants to tour the house at 8. What are you going to do with the kids?? You probably can't avoid that issue but adding on all of the other work in selling seems excessive.

If you really and truly do a "for sale by owner" offering, with no agent, not even a discount one, then you could try the following strategy: Try the FSBO approach for a limited period of time, say, a week, during which your husband does all of the child care. At the end of the week or whenever he gives up, get an agent. This might be very easy; a meaningful fraction of the people touring your house will be agents trying to sell their services.
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