Does FSBO work? Can't afford traditional agent fees.. (flat fee, for sale by owner)

[FairfaxGirl]

My husband and I are considering selling our place so we can move up a larger home. However, our diminished equity in the existing home is driving us to consider a FSBO - the traditional 5 or 6% real estate commission fees would take a sizable dip in our equity.

Our place is in good condition and in a desirable neighborhood. However, because the market is still down, we may need an agent to help us find prospective buyers. Perhaps we could find a good realtor who charges a flat rate? We could do a lot of the leg work ourseleves. Or find a realtor who can broker the home (i.e. be a dual buyer's AND seller's agent). What is your take? Any advice or experiences you can share would be great!

[onevthoki]

You could look into a limited services brokerage. Normally they will charge a flat fee or reduced rate so that it goes into the MLS. The flip-side is you will be doing all of the contact with the buyers, and you will probably still need to offer a commission to buyer's agents. There are two national franchises that come to mind, but if you do an internet search for limited services realty companies, I am sure they will come up. You also might try MilitarybyOwner.

[movingtodcfromseattle]

Have you heard of Redfin? When we sold our first house three years ago in the Seattle area, the buyers used them. Redfin gets a modest fixed rate and you as a seller get the rest back. I'd check into it. Listing With Redfin | Redfin.

Good luck!

[ShannonMilligan]

Couple of thoughts here: If you do for sale by owner, you have to be prepared for a lot of work. I work for an agent and she often gets calls from for sale by owner people who got in over their heads and have a million questions. (and that's not fair to the agent...they can't work for free So if you are going to do it, maybe invest in taking a class or two. That won't give you experience but it may help with terms and such.
You probably should offer 3% to the agent who brings in a buyer. Again...an agent will show your home if they are going to get paid.
You should get your home on the multiple listing. It will allow agents to see the property online and know its there. Otherwise how many people will really notice your sign in your yard?
Do you know the sites to market your home? There is much more than just Craigslist.

SOmething else to consider...I think the statistic is only 2% of for sale by owners actually get the deal done. Do you want to move fast? Think about your carrying costs. For example lets say your mortgage is $2K a month. Each month you sit on the market you will be paying that. What if it takes you 6 months to sell? That's $12K that you have paid into a house you no longer want to be in. Statistically I believe having an agent gets it done much faster.

Just some things to think about. We had once thought about doing for sale by owner to save the cost as well but at that time we didn't know the first thing about real estate and we needed to sell fast.

Good luck with whatever you do!

[mississippimagnolia]

twinmma is so correct! I work in the legal field and have worked on many real estate transactions.

Do people successfully sell their homes without an agent? Yep. All the time. The problem isn't the success stories. The problem is when things go bad they go really, really bad. Even seemingly small mistakes can cost many thousands of dollars to correct.

I have a B.S. in Legal Studies. I have taken no less than four college level classes specifically on real estate law. And I've worked in law offices for years and years. And there is no way I would try to sell my house without an agent.

[Teamfour]

We sold a previous home ourselves via one of the FSBO services. I did a lot of research online about the home selling process and had all of the proper forms on hand for prospective buyers. These included offer forms, property disclosure form, lead-based paint form, and one that prevents the buyer from making warranty claims. In our case, all of these were free from the Louisiana Real Estate Comm website. You will find that a closing company will be eager to close the sale and the fee is very reasonable. We sold our house in six weeks and saved over $13,000 in commissions. I think with the proper research it is very doable.

[goozer]

As a potential home buyer (and I'm not a realtor), I definitely am not a fan of FSBOs. I find that most FSBOs are not marketed properly and the owners, who often have an emotional investment in the property, are not realistic on the market price or reasonable with negotiations. It is also my sense that most FSBOs are trying to save themselves money, so why should I want to deal with the hassle. I mean, if I can get a great deal by getting a piece of the FSBO savings AND the seller is still willing to pay my realtor's 3% commission, I don't see how the seller saves much and they completely lose the benefit of having a realtor.

Bottom line, when I am looking at a potential home purchase, I completely ignore FSBOs because I don't get a benefit and they are often a headache to deal with. Too many nice, well-staged properties being marketed by realtors who have had a long talk with the sellers and knocked them down on price to what is reasonable in the current market.

[FairfaxGirl]

Thank you everyone for all the fast and helpful responses. I did a quick search based on your suggestions. So far Refin is looking pretty good......

[smokemaster]

there are many realtor listed homes that have an ADOM of more than 200. They don't make any guarantees, either.

[DC Oldtimer]

FFGirl,

A few decades ago, when we were young and naive, we tried to sell our first home as a FSBO. It didnt work but was a learning experience.

The first thing you learn is that all manner of folks with no intention of buying your home (or the ability to qualify for a mortgage) will stop buy and ask for a tour. It is a royal nuisance dealing with such folks.

Moreover, while it might have been safe decades ago to let a stranger into your house, today I wouldnt consider it. We plan to put our home on the market later this year and no way would I let a stranger in here unless accompanied by a professional agent. You just never know whether someone is interested in the house or casing the place or worse.

Real estate agents are trained to screen people; to weed out folks who are just "browsing," who cant quality for your house, etc.

If $$ is tight, I would recommend using a flat fee listing service to get your home in the MLS for a few hundred dollars. Then you will only owe commission to the buyer's agent. This is what we ended up doing with our first home, with the result that we paid 3% rather than 6% commission.

We used a firm called Garand Realty, it was so long ago, I don't know if they are still around.