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I'm considering selling but not listed yet. A neighbor approached me and asked about a FSBO sale, which I've never done before. Obviously he thinks we can both save money that way. My question is, how much money? I'll use round numbers as an example:
So if I'm selling my house for $100K, with an agent I'd be paying $6,000 commission and clearing $94K (not counting closing costs). So would a FSBO buyer be expecting me to sell him the place for $94K, since that's what I'd be clearing anyway? Or are we "splitting the difference" at $97K perhaps?
Personally, I can't see the upside for me of selling at $94K with no agent. I get nothing extra, plus the added aggravation of selling without a professional.
On the other hand, I don't know if I'd get the full $100K asking price with an agent. So say the best offer I got was $97K. I'd be paying $5820 commission and clearing $91,180 -- in which case, I'd be getting less than the $94K I could have gotten with FSBO.
Any advice from those of you with experience, both buying and selling FSBO?
I would sell FSBO if possible. I did that once. You can save a lot by not paying the commission. If either party is concerned about the legalities have a lawyer draw up the papers. Much cheaper than a commission. Real Estate agents do coordinating, bringing people together and help with required forms but the real legal work is done by the title company. (Title search, recording the deed, etc.) Make sure you get title insurance. They buyer will want that of course.
I negotiated once with a realtor and agreed to pay one half (3%) of the commission if they brought be a buyer but no more. Right after I accepted an offer from a buyer that the real estate agent brought to me I had a non-agent buyer come to me and said they would pay full asking price. (I take good care of my houses) So be patient.
Perhaps it depends on the market you're selling your home in. I can't imagine needing a broker (example) when selling a new york city condo. Aren't they flying off the shelves, selling like hotcakes?
I'm considering selling but not listed yet. A neighbor approached me and asked about a FSBO sale, which I've never done before. Obviously he thinks we can both save money that way. My question is, how much money? I'll use round numbers as an example:
So if I'm selling my house for $100K, with an agent I'd be paying $6,000 commission and clearing $94K (not counting closing costs). So would a FSBO buyer be expecting me to sell him the place for $94K, since that's what I'd be clearing anyway? Or are we "splitting the difference" at $97K perhaps?
Personally, I can't see the upside for me of selling at $94K with no agent. I get nothing extra, plus the added aggravation of selling without a professional.
On the other hand, I don't know if I'd get the full $100K asking price with an agent. So say the best offer I got was $97K. I'd be paying $5820 commission and clearing $91,180 -- in which case, I'd be getting less than the $94K I could have gotten with FSBO.
Any advice from those of you with experience, both buying and selling FSBO?
Did the neighbor give a number? Do you know that you'd list it for the "$100k" that you mentioned? If the answer to the second question is yes, I'd say you probably want to give him a slight discount off that price, but not the full savings of using an agent (plus as mentioned you will still have costs of a lawyer, etc.). Sure you may not get full asking price if it was listed with an agent, but it's also possible you could get more depending on the demand in your area. Your neighbor would also be preventing himself from having any competition which should be worth something to him. Either way I'd probably have him give you a number before you give him one.
Did the neighbor give a number? Do you know that you'd list it for the "$100k" that you mentioned? If the answer to the second question is yes, I'd say you probably want to give him a slight discount off that price, but not the full savings of using an agent (plus as mentioned you will still have costs of a lawyer, etc.). Sure you may not get full asking price if it was listed with an agent, but it's also possible you could get more depending on the demand in your area. Your neighbor would also be preventing himself from having any competition which should be worth something to him. Either way I'd probably have him give you a number before you give him one.
Everything makes sense except for the last sentence. The seller sets the asking price, FSBO or not, and as a buyer I'm not about to start guessing what the seller wants. Or do you mean asking him for a counteroffer after the $100k is on the table?
Did the neighbor give a number? Do you know that you'd list it for the "$100k" that you mentioned? If the answer to the second question is yes, I'd say you probably want to give him a slight discount off that price, but not the full savings of using an agent (plus as mentioned you will still have costs of a lawyer, etc.). Sure you may not get full asking price if it was listed with an agent, but it's also possible you could get more depending on the demand in your area. Your neighbor would also be preventing himself from having any competition which should be worth something to him. Either way I'd probably have him give you a number before you give him one.
Why offer a discount price. Just tell the neighbor what your price is.
Everything makes sense except for the last sentence. The seller sets the asking price, FSBO or not, and as a buyer I'm not about to start guessing what the seller wants. Or do you mean asking him for a counteroffer after the $100k is on the table?
The house isn't on the market yet and the neighbor approached OP, so I think the onus is on the neighbor to prevent it from hitting the MLS. If OP knows how much they'd list it for and hasn't already told the neighbor, I think it wouldn't hurt to try to see if the neighbor would give a number in case it's higher than OP's number (of course it'd still have to appraise if a loan is involved). If it's lower, then OP can always say "well I was planning to list it for $X."
You may net more by putting it on the market and letting ready willing able buyers make offers.
Is your neighbor qualified to buy? Is s/he getting a loan? Paying cash?
Interview three local to you real estate people and then ask their opinion of value and what you would need to do to get your home in showing condition.
I'm considering selling but not listed yet. A neighbor approached me and asked about a FSBO sale, which I've never done before. Obviously he thinks we can both save money that way. My question is, how much money? I'll use round numbers as an example:
So if I'm selling my house for $100K, with an agent I'd be paying $6,000 commission and clearing $94K (not counting closing costs). So would a FSBO buyer be expecting me to sell him the place for $94K, since that's what I'd be clearing anyway? Or are we "splitting the difference" at $97K perhaps?
Personally, I can't see the upside for me of selling at $94K with no agent. I get nothing extra, plus the added aggravation of selling without a professional.
On the other hand, I don't know if I'd get the full $100K asking price with an agent. So say the best offer I got was $97K. I'd be paying $5820 commission and clearing $91,180 -- in which case, I'd be getting less than the $94K I could have gotten with FSBO.
Any advice from those of you with experience, both buying and selling FSBO?
As a buyer, I'd expect less than the going rate for houses in your area being sold through an agent. If I don't get that, why would I buy a fsbo, esp given that I don't have anyone to draw up the contract and other papers for me, I don't have a realtor seller's disclosure from you, etc. ?
Some fsbos set their price at the going rate, and then wonder why their houses don't sell. That's the reason. If a house being sold by a realtor on your street is similar to yours and sold for $260,000, buyers wouldn't pay $260k for yours.
What I would expect is a division of your savings. If you are saving $15,600 in commission (6% of $260k), then I would expect to arrive on a fair price for your unique house, based on the going rate for realtor-listed homes, and then subtract $7,800 (half of $15,600). OR your house should be listed at $7,800 less (half of 6% of $260k), or about $253,000.
Also, I've seen a LOT of fsbos on the market in my day. The majority are overpriced, some waaaaay overpriced. I think a lot of people are just fishing. They're not serious about selling.
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