For Sale by Owner Guide
Guide for SellersSee all Seller Guide topics
Decide to Sell by Owner
Be prepared to do your own research about the market and the sales process
Know the legal disclosures you must make in your jurisdiction
Prepare yourself to stay unemotional about the sale; it is critical to your success
Be prepared to give up private time on weekends and evenings to show your house
A book to invest in:
The FSBO Kit
Although using Owners.com services can make many aspects of selling your home much easier, selling by yourself requires an additional commitment of time and energy. Still, over 900,000 homes are sold every year without the involvement of a real estate broker - as much as 20 percent of home sales annually are accomplished on a "For Sale By Owner" basis (also known as FSBO, or "fizz-bo"). These bold buyers and sellers save an average of $9,000 per transaction in commission costs. With knowledge, common sense and patience, you can sell your own home, and Owners.com can help.
Is this the method for you? If you've never done it before, it certainly can be challenging, but if you are willing to do the work necessary to market your house and work with potential buyers, there are some advantages.
For example, by selling by owner, you can:
- Save Money on Commission Fees
- Sell Your House More Quickly
- Protect the Equity in Your Home
- Keep the Selling Process in Your Control
Following are brief descriptions of the potential advantages to selling your home yourself. Then we will outline some of the challenges that face those proceeding with a by-owner sale.
Save Money on Commission Fees
Typically, a real estate agent or broker who lists and sells your home is paid a commission between 5% to 7% of the selling price. That means that if your house sells for $200,000, you would end up paying him/her between $10,000 and $14,000. The commission makes up by far the biggest chunk of the expenses associated with selling your house. If you sell it without the help of an agent, you save that money.
Sell Your House More Quickly
Depending on the choices you make and the real estate market in your area, you may be able to sell the house faster than an agent could.
If a fast sale is a high priority for you, once you've figured out what the asking price for your house should be, subtract the amount you would pay an agent if s/he were to sell it at that price, and reduce your asking price by a like amount, passing on your savings to the buyer. Your house will be priced lower than other comparable ones in your area, and buyers are likely to respond quickly and enthusiastically.
Even if you do not pass all the savings on to the buyer, you may be able to sell your house just as fast or perhaps faster than an agent if the market in your area is particularly strong and houses are being snapped up rapidly. Furthermore, you may be more motivated to sell the house than an agent, who may be busy with dozens of properties at a time.
Protect the Equity in Your Home
An agent's commission, though based on the selling price, is paid out of the equity you have in your home. Therefore, if that commission costs you $10,000 and you only have $40,000 in equity in the home, the commission will take away 25% of your equity. If you choose to sell by owner, you protect your equity.
Maintain Control of the Sale
If you choose to sell by owner, you will make all the decisions about when your house is available to be shown, about the correct price for the house, about the escrow company you use. All the advertising decisions - where and when your ads will run, what aspects of your home they emphasize - will also be yours. If you are the type who relishes being in control of all the details, you will probably prefer selling your home yourself.
Of course, selling on your own is not the answer for all sellers. It can take more energy and commitment on your part than if you were to list with an agent.
You will need to be able to show your house at the buyer's convenience if you are serious about selling. You will need to pay for advertising so that potential buyers know your house is available, and do some research to know how to price your house. You will need to find and hire a good real estate attorney to tell you what things by law have to be disclosed to the buyer prior to a sale, look over any contracts, and ensure you do not inadvertently discriminate against potential buyers. You will have to negotiate directly with buyers, and with buyers' agents. You will need to find an escrow company to administer the closing.
In short, selling on your own is not simple. But, neither is selling through a real estate agent. The by owner option can be worth your hard work, if you are committed to saving money, equity and quite possibly time.
Use the resources offered on Owners.com and we think you'll be on your way to the smooth sale of your home.