“Hello… Im going to sell my late mothers home in September. I know you dont want to hear this, but I plan sell it without a broker to save the 6%. One of my neighbors did, and he didnt know anything about real estate, so it can’t be too tough. Ill just get the escrow officer or attorney to handle all the details. What escrow company do you use? Thanks for your help, and if things dont work out Ill call you.”
***ANSWER:
Now understand that Im biased, but everything Im about to tell you is 100% true:
I used to teach a class on selling For Sale By Owner (FSBO). In it, I explained the 5 myths of trying to sell By Owner. You actually mentioned four out of those five. Here they are
The 5 For Sale By Owner Myths:
1. “I’ll save the 6%”
Yes, some do indeed save 6%. But statistics show that the average FSBO sells for 5% less than people do with an agent. And about half pay 3% to an agent who brings them the buyer. Even if you dont include advertising and other added costs, for all the time and trouble invested, at best the average FSBO saves ZERO!
2. “When you see a FSBO sell, they were successful”
Many people see a house sell FSBO and think they were successful. What they dont see is that the owner probably paid a buyers agent 3%, may have undersold the home, and probably had lots of problems, delays, and extra expenses. But all the neighbors see is the moving truck, so things must have gone well.
3. “It’s easy”
Pricing… preparing… marketing… showing… interpreting market feedback… negotiating… qualifying the buyer… contracts… disclosures… transaction management… paperwork… risk management. Done right, it is NOT an easy job.
4. “Agents make 6% and are overpaid” (You didn’t mention this one.)
I actually agree that many agents are overpaid. But remember that real estate commissions are usually split. So at 6%, each firm gets 3%. Then its divided between the firm and the agent. Then subtract costs involved. RESULT: the average agent nets all of 1-1.5% after expenses when they represent a buyer or seller.
5. “I’ll have escrow or an attorney handle everything”
Sorry. Escrow is but a small part of a home sale. And many escrow companies hate FSBO sales due to all the problems and cancellations. Real estate attorneys generally know real estate law, but not real estate PRACTICE. Few are qualified to handle a real estate transaction. Just as you wouldnt want me handling your real estate lawsuit, dont expect an attorney to handle your real estate sale.
