For Sale by Owner News and Articles
Get A Quicker Sale
By Robert Irwin
Yesterday, while I was being interviewed to provide background for a story in the New York Times on selling your home (scheduled to run on Sunday, April 18th), I was asked an interesting question. The interviewer pointed out that the obvious reason a person sold "by owner" was to save money on the commission. "But," he asked, "Can you give me one other reason why a person might want to go FSBO?"
Without hesitation I replied, "To get a quicker sale."
The interviewer paused, then asked the obvious question about how that would work? I understood exactly what he meant. After all, a sale by owner often is more difficult for both buyer and seller than using an agent. An agent, after all, has the expertise, documentation, and experience on his or her side. When you're selling on your own, you have to do it all yourself, or find sources to replace what the agent offers.
Therefore, it only stands to reason that because a FSBO sale tends to be more difficult, it would be harder to find a buyer, and take longer to sell. Yes, that's the way it seems. But sometimes the way things really work can be counter-intuitive.
When selling by owner you possess something you can give to the buyer that no agent can match - a big discount.
Consider, assuming that you would otherwise pay a 6 percent commission, on a $300,000 house that's a whopping $18,000. However, by selling it yourself, you hope to save all, or at least most of that commission.
However, if you want to get a quicker sale, why not consider a different arrangement? Why not give some of the commission, in effect, to the buyer in the form of a discount off the price. For example, instead of pricing your home at $300,000, price it at 3 percent less, in this case, $291,000.
Now, consider it from a buyer's perspective. A home just like yours located next door is selling with an agent for $300,000. However, an almost identical home, yours, is selling for $291,000. Which home would you be more likely to make an offer on, even if the second home is being sold by owner? (Remember, you can offer a discount because you're not paying a commission - your neighbor with the listed house, can't. And even with the discount, you're still netting more than your neighbor!)
By cutting the buyer in on some of the savings, you can sometimes move your property faster.
Of course, in today's market with prices skyrocketing in some areas, that may not be necessary. If you can sell within a few weeks to a month for your asking price (or more!), why bother giving the buyer a discount?
Why indeed, unless your home happens not to be in one of those fast-moving areas. Or, unless you have some detracting feature you need to overcome. Or, unless you need a really, really quick sale.
It's certainly something to consider.
Remember, you can't pay the buyer a commission. Only licensed real estate agents can collect a commission. But, you can discount the price of your house which, in effect, offsets the amount you would otherwise pay an agent.
Robert Irwin is the most prolific real estate writer in America having produced over 100 published books in the field. His TIPS & TRAPS McGraw-Hill series has sold well over a million copies and his FOR SALE BY OWNER KIT and FIND IT, BUY IT, FIX IT and other books have been strong sellers for Dearborn.
In addition Irwin writes a regular real estate column for The Wall Street Journal online and is introducing a new weekly column for Owners.com.
Irwin has sold his own property "by owner" and during over 30 years in the business has been a broker and consultant to lenders, agents, buyers and sellers.
He can be reached through his website RobertIrwin.com.