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For those who are tempted to sell their property "by owner", the big question, of course, is how much money can I really save? After all, if you're going to spend time, effort and even some money selling on your own, you want to be sure the return makes it all worthwhile. The answer, like so many others, is that it all depends. If you do a pure FSBO (For Sale By Owner) transaction not involving any agents, you should be able to save the entire commission. Assuming a 6 percent commission that works out to something like the following: AMOUNT YOU'LL SAVE BY SELLING ON YOUR OWN | SALES PRICE | | SAVINGS ON COMMISSION | | $100,000 | | $6,000 | | $200,000 | | $12,000 | | $300,000 | | $18,000 | | $400,000 | | $24,000 | | $500,000 | | $30,000 | | $600,000 | | $36,000 | | $700,000 | | $42,000 | | $800,000 | | $48,000 | | $900,000 | | $54,000 | | $1,000,000 | | $60,000 |
Note: Of course you can figure this out on your own, but somehow seeing it spelled out by price makes the impact stronger. That's what you'll save, not counting normal expenses such as escrow and title insurance fees, assuming that you do the transaction entirely on your own directly with the buyer. However, on the other hand you might want some help and, as a result, have some expenses. For example, you may want to hire an attorney to help with writing up the sales agreement and other documentation. That could easily cost $1,000 or more. And you might want to hire a "fee for service" agent to do some of the heavy lifting (advertising, responding to calls, showing the property and so on) for you. That could also eat into the savings. If you "co-broke" your property with an agent, you'd most likely be responsible for half a commission, the buyer's agent's half. That might be 3 percent of the full 6 percent, although you might be able to negotiate it down to between 2 and 2.5 percent. And, if instead of handling the seller's part of the transaction entirely on your own, you opt for using a discount broker, you might be responsible for a seller's broker's commission of anywhere from 1 to 2 percent or more. In short, depending on how much work you do yourself and how much you farm out, you could save anything from the full 6 percent commission, to as little as 1 percent, or less. (Of course, at the low end you'd be doing virtually none of the work yourself.) IT IS WORTHWHILE? Consider: selling on your own means that you can potentially save a considerable amount of money on the commission. Depending on how you structure the sale, you could "give" some of that savings to the buyer in the form of a lower price, meaning that your home would be more competitive than others, resulting in a much faster sale. Besides, you're the person most interested in selling your home, so you also may be able to translate that enthusiasm into a faster sale. Further, by handling the sale yourself, you have more control over the process. You may be able to avoid unnecessary costs and fees. Finally, by selling "by owner," you'll be helping to protect your equity. Remember, the commission is based not on how much you have in your home (equity), but the sales price. TIP Selling on your own is not for everyone. But, for those ambitious enough to tackle it, and who do their homework by learning the tricks of the game, it can be very rewarding. |
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