This is an article by Eric Tyson,MBA Ray Brown Creators of the widely popular book House Selling For Dummies. If you are thinking of selling your house on your own (For Sale By Owner) you cannot afford to NOT buy this book.
Ok, what is a FSBO anyway? (wiki: FSBO)
"...in which a property is offered for sale directly by its owner and without that owner having solicited the help of a real estate broker, implying that no real estate commission is associated with the sale..."
"Ian, why are you making a blog post about this if you know that the whole purpose of FSBO's is to avoid paying real estate agents like you?"
Two Reasons. First, it is a not so well known fact that up to 90% of FSBO's end up listing with a real estate agent. Second, I am not totally against FSBO's. I believe that if you are determined,creative, study the in's and out's of selling your home on your own and is willing to work hard, it could work for you.
And perhaps the most important thing: Be realistic on how you view the current Reno real estate market. That is huge.
Going back to the title of this post, how much money can you really save? let's learn from Eric and Ray:
" Maybe a friend,neighbor, relative, or business associate is interested in buying your house. If you know a ready,willing, and financially able buyer who wants to work with you directly, you may save the full standard real estate brokerage commission for your area, less a nominal fee paid to a real estate attorney.
In the best-case scenario,given that you make all the right moves and are an astute negotiator, you may save yourself a good deal of money. You're more likely, however, not to save the typical 5 percent to 6 percent real estate brokerage commission. Here's why:
- Unless you already have a buyer in hand or you find one quickly, you have to spend money advertising and marketing your house, as we described in chapter12. Advertising costs money; the longer your house is for sale, the more you spend.
- You may have to pay a real estate commission if a cooperating real estate agent brings you a buyer. Most home buyers work with agents,and these agents must be paid for bringing you a bona fide buyer. This expense alone can cut your expected commission savings in half.
- Last, but not the least,most buyers expect to share the commission savings you're enjoying by not using an agent. They may expect to split the savings with you. If you're a strong negotiator and the prospective buyers aren't, you may be able to keep most of the savings for yourself.
Unless you have a buyer in hand before advertising your house for sale, or you sell your house to a buyer who is not working with an agent, you can realistically expect to save about 1 percent to 2 percent of the sale price in a typical FSBO. Ultimately, of course, the amount you do or don't save depends on how much the buyers pay for your house. If you end up selling for a lower price than a good real estate agent could have fetched for you, the lower sale price may wipe out any commission savings.
Also, don't forget the value of your time-- especially if you're self-employed or in a profession where your income suffers if you work less. Handling buyer and agent phone calls,showing the property,holding open houses,meeting property inspectors and appraisers, and handling escrow details takes time."
The last thing I wanted to impress upon you is to dissuade you to go FSBO's. Again, I believe FSBO's could work for some people (especially when we had the glorious years of 2004-2005 Reno real estate market). Just be sure that you do your homework and really understand what you're getting into. Feel free to call me if you have additional questions or buy the book as early as now.
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