1. What is FSBO?
FSBO, otherwise known as ‘For Sale By Owner’, is the sale of a home without the use of a real estate agent in the process. This method of selling a home is primarily used to save money, but it isn’t always the easiest way to do so.
Without representation from a real estate agent, you’re responsible for everything involved with the home sale. This means setting the price, managing all of the legal paperwork, negotiations (i.e. home price, repairs, etc.), and the marketing of your home to make sure your property is getting the amount of exposure it needs to sell.
If you’re able to handle all of these aspects of selling your home, great! You won’t need to pay an agent, which results in saving a few thousand dollars in the process. However, if you mess up somewhere along the way, it could cost you more money than it would’ve taken to hire an agent. It’s important to find the happy medium between paying a large commission fee for an agent vs. taking the risk of doing everything yourself.
That’s where Scout Realty comes in. Rather than worrying about commission fees, we sell your house for a low flat fee.
That’s right. No commission and no hidden fees.
Just one low, flat fee.
This gives our clients the best of both worlds. We handle the marketing, paperwork, negotiations, open houses, and anything else that’s needed to sell your home so you don’t have to list it as FSBO, but you won’t pay that large commission fee that you would with a traditional brokerage.
2. Pro’s and Cons of selling FSBO
As with anything in life, there are plenty of pro’s and cons of listing your home as a FSBO. Before we dive in, let’s first take a look at a couple of key statistics:
According to Zillow.com, “36% of sellers attempt to sell their homes themselves, but challenges along the way lead many of them to eventually hire an agent. In the end, only 11% of sellers end up selling their home without a real estate agent.” This simply proves the level of difficulty that’s associated with selling your home without using an agent.
Another statistic to note comes from DaveRamsey.com, and states “Sellers using the FSBO option sold their homes for less than the median selling price of other homes. In 2018, FSBO homes sold at a median of $200,000. That’s a lot lower than the median price of $264,900 for agent-assisted home sales.”
So, if you’re really trying to save money by listing your home without an agent, it’s important to note that you may end up selling it for far less than what it’s really worth.
Let’s take a look at some more Pro’s and Cons:
– The most notable “pro” to listing your house as FSBO is that you won’t have to pay a commission fee to a real estate listing agent. This is a large reason why most people go this route.
– You’re the only one that knows your house as well as you do. This gives you plenty of expertise when discussing its best features and attributes that might be appealing to buyers.
– You’ll control the open houses, viewings, negotiations, etc. This gives you the control over the entire sales process.
– Although you aren’t paying a commission fee to a listing agent, you’ll still more than likely end up paying anywhere from 2.5% – 3% to a buyer’s agent. If you don’t offer a commission fee to buyers’ agents, they will be reluctant to show your home, resulting in a much longer time on the market.
– The amount of work required would be quite daunting. Negotiating contracts, scheduling showings and open houses, staging your home, and making sure everything is being done legally will take quite a lot of time and effort, which many people can’t afford to spare.
– You may undervalue your home, which means you lose out on thousands of dollars.
Fortunately, Scout has been able to help clients that originally tried to list their home as FSBO.
Take Leslie for example. Here is her take on why using Scout to sell her home was far better than listing her home on her own:
What made you decide to list with our agent?
“I could get full-service assistance selling my home while saving a considerable amount of money.”
What advantage did you see over listing by yourself?
“Listing with Scout gave me much broader visibility with being on the MLS (Multiple Listing Service). Plus, I needed to move before my home was sold. By listing with Scout, they took care of all the showings and kept me updated with immediate feedback from potential buyers.”
Did you get the result that you were hoping for by listing with us?
“I had a solid offer on my home within 2 weeks.”
What would you tell other DIY sellers after your experience selling with Scout?
“DIY sellers have to rely on potential buyers driving by and seeing your signs. I wasted a month thinking I could do it myself.”
Why were you considering selling on your own?
“The potential savings on commission is the biggest attraction but with Scout, you still save money without having to deal with the hassle.”
3. Do FSBO sellers pay commissions?
If you decide to sell your home without using an agent, you cut the amount of real estate commissions that you’ll have to pay in half (roughly). However, more than likely, you’ll still end up paying 2.5% – 3% in commission fees to the buyer’s agent. This means the notion that FSBO sellers “don’t pay any commission fees” is false. As mentioned prior, if you decide to not offer the buyer’s agent any commission fee, they will more than likely not show your house to potential buyers, which can significantly increase the amount of time your house is on the market.
4. Can FSBO homes be listed on the MLS?
The MLS (Multiple Listing Service) is one of the best ways to increase foot traffic on your home. Listing your home here allows realtors, brokers and third-party sites, such as Zillow.com, realtor.com, etc. to pull your listing into their database. However, only licensed real estate agents have access to post listings on the MLS database. If you are listing your home ‘For Sale By Owner’, you will still have the ability to list on the MLS, but you’ll have to pay anywhere between $99 and $500 for a package to do so. The price you’ll pay typically depends on the length of time you are going to list your property, and whether or not you’re able to include photographs, legal forms, etc. With Scout, we handle all of that for you in our flat fee listing packages, so you’ll never have to worry about how much you’ll end up dumping into the MLS before your home sells.
In summary, if you’re wondering whether or not to list your home with or without a real estate agent, just know that with an agent from Scout Realty:
1. You can avoid the full-time job of having to balance your normal just with being a full-service real estate agent on your own.
2. You can avoid the stress of worrying about meeting all of the legal requirements that are associated with selling a house, as well as locating all of the legal documents needed to close.
3. Your home will be seen by far more active buyers, which means your house sells faster, and for a more competitive price.