Benefit #2 of FSBO: Save Thousands on Real Estate Commissions
The single biggest reason why people list their properties on their own (For Sale By Owner) is to save money by not having to pay a real estate agent’s commission. In most states it is typical for the seller to pay the commissions of the seller’s and buyer’s agent. What is interesting, and not many people realize, is that the buyer is the one that actually pays the commissions. More precisely the buyer is the one that funds the commissions. Real estate agents will sit down with their customers and come up with a pricing strategy based on a market analysis of comparable properties (CMA) which have sold and/or are for sale. They also work in their commission into that figure. When a party buys a house the money he pays towards it is what funds the commissions.
So how much can be saved by selling as FSBO? According to National Association of Realtors (NAR) the median price of a single family homes sold in the US during the third quarter of 2009 was $177,900. By selling without a real estate agent the seller would save 6% of this number which equals $10,674! Not bad at all.
It seems like a no-brainer. But it is not as black and white as you might think. Many people believe, me included, that a good real estate agent can sell your house for more money and quicker that you could on your own. It is not uncommon for seller to list their homes as FSBOs for a few months and later hire a real estate agent because they were unable to sell. I have not been able to find any data on what percentage of FSBOs don’t sell and then sell through a real estate agency, but I expect this to be a pretty high number. What’s more interesting is that after an owner decides to go with the services of a professional the listing price increase. Kind of crazy to raise the price after the house has not been selling, right? Not really. The price is raised to cover real estate commissions. The higher quality marketing that comes with hiring an agent is what is expected to attract a buyer that will pay that sum.
In order to take advantage of this great benefit of FSBO you, as a seller, need to be an excellent marketer of your property. Using the help of companies such as ForSaleByOwner.com, ByOwner.com, and FSBOLocal.com you can get a good jump start in promoting and marketing your property. I highly recommend that if you take the FSBO route that you use one of these services. They typically involved a one-time fee or a monthly fee for listing your house, but it comes with many benefits. Some companies will actually refund any fees paid if you cannot sell your house on your own and then it sells through a real estate agent.
So remember, you can save thousands, but YOU have to do the work. You cannot just sit and expect the house to sell on its own.
Thanks for your comments.
The Housing Ecologist
The single biggest reason why people list their properties on their own (For Sale By Owner) is to save money by not having to pay a real estate agent’s commission. In most states it is typical for the seller to pay the commissions of the seller’s and buyer’s agent. What is interesting, and not many people realize, is that the buyer is the one that actually pays the commissions. More precisely the buyer is the one that funds the commissions. Real estate agents will sit down with their customers and come up with a pricing strategy based on a market analysis of comparable properties (CMA) which have sold and/or are for sale. They also work in their commission into that figure. When a party buys a house the money he pays towards it is what funds the commissions.
So how much can be saved by selling as FSBO? According to National Association of Realtors (NAR) the median price of a single family homes sold in the US during the third quarter of 2009 was $177,900. By selling without a real estate agent the seller would save 6% of this number which equals $10,674! Not bad at all.
It seems like a no-brainer. But it is not as black and white as you might think. Many people believe, me included, that a good real estate agent can sell your house for more money and quicker that you could on your own. It is not uncommon for seller to list their homes as FSBOs for a few months and later hire a real estate agent because they were unable to sell. I have not been able to find any data on what percentage of FSBOs don’t sell and then sell through a real estate agency, but I expect this to be a pretty high number. What’s more interesting is that after an owner decides to go with the services of a professional the listing price increase. Kind of crazy to raise the price after the house has not been selling, right? Not really. The price is raised to cover real estate commissions. The higher quality marketing that comes with hiring an agent is what is expected to attract a buyer that will pay that sum.
In order to take advantage of this great benefit of FSBO you, as a seller, need to be an excellent marketer of your property. Using the help of companies such as ForSaleByOwner.com, ByOwner.com, and FSBOLocal.com you can get a good jump start in promoting and marketing your property. I highly recommend that if you take the FSBO route that you use one of these services. They typically involved a one-time fee or a monthly fee for listing your house, but it comes with many benefits. Some companies will actually refund any fees paid if you cannot sell your house on your own and then it sells through a real estate agent.
So remember, you can save thousands, but YOU have to do the work. You cannot just sit and expect the house to sell on its own.
Thanks for your comments.
The Housing Ecologist
I know of homeowners selling their homes as FSBO's who have financed the purchase for the buyer. Are banks less willing to lend money on FSBO's than when it is listed by an agent?
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