Home Selling in Cornelius>Question Details

Jan, Home Buyer in Cornelius, NC

What are the benefits/disadvantages of buying a FSBO? and what are the benefits/disadvantages of selling a FSBO (besides the commission rates)?

Asked by Jan, Cornelius, NC Wed May 29, 2013

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Susan Robertson’s answer
Buying/Selling a FSBO can range from horrible to great. There are so many variables. Price is the biggest. Everyone wants to save the commission. The seller and the buyer can not both save the commission.

Safety is a big concern. Strangers come up to your house, and you know nothing about them. With a Realtor, there should be a check to see that the potential buyers are who they say they are. I always get my clients pre-qualified. Timing of showings are controlled with a Realtor. A good Realtor advises their clients neighborhood/area amenities and possible negatives that could effect future house values.

Remember there are so many details, that can be and cause a sale to fall through, not using professional people can be a mistake.Some of those mistakes can come back to bite you as well.
Everyone thinks the Realtor have an easy job, it looks easy because they are professionals.
0 votes Thank Flag Link Wed Jun 12, 2013
What are the advantages of having a lawyer represent you in court or a doctor perform surgery? Buying and selling a home is usually one of the biggest financial decisions a person will make in their lifetime. Trying it without a Realtor could not only give you nightmares, but could cost you thousands even after the commission. When buying a home a Realtor should know about the neighborhood you are interested in and values. They have seen other homes on the market as well as those that have sold. It helps a great deal when it comes to knowing true value. Many people selling on their own are doing so because they didn't agree with the price the Realtor suggested and want more for their home. Do you want to pay more than current value? I think not. As for selling, the exposure a Realtor can give you through the MLS, Trulia and other areas can't be matched by your own efforts. More potential buyers means more competition, faster sale and higher price.

Don
2 votes Thank Flag Link Thu May 30, 2013
Buying a FSBO at market means a buyer is over paying by not receiving all the services offered in a typical Real Estate transaction.

Selling a property FSBO carries the weight of not closing and possibly getting into a law suite over items that would have been easily handled with a professional running the show.
Web Reference: http://www.GetSoldOKC.com
1 vote Thank Flag Link Thu May 30, 2013
Benefits of buying a FSBO?

Odds are the FSBO doesn't know how much his/her home is worth. (Usually, it's overpriced. But it could be underpriced.) So, if it's underpriced, you're starting off with a good deal. But usually, since it's overpriced, you have to get the price down to a reasonable level. The FSBO will be focused on price, so you have to demonstrate (comps, repairs needed) that what you're offering is reasonable. But because the FSBO is fixated on price, that gives you the opportunity to negotiate like heck on other provisions. Example: Maybe the FSBO can afford to offer owner financing. So: Your offer is for full fair-market value, but you negotiate a really great deal on the owner financing portion of it.

Benefits of selling as a FSBO: None, in virtually all cases. Yes, you save part of the commission. But you may not have the benefit of negotiating expertise or someone who knows how to structure the deal that'll work best for you.

Hope that helps.
1 vote Thank Flag Link Thu May 30, 2013
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
Would you choose a plumber or a mechanic, off the street, to help you sell your house?
When you do-it-yourself, that's exactly what you're doing!
1 vote Thank Flag Link Thu May 30, 2013
Donald Mituzas explained the basic difficulties with buying or selling a FSBO very well. I would add that the buyer may concentrate on financial savings and not spend the time and money investigating the property with home inspections and marketing analysis.

With a FSBO the seller is trying to get the best deal for his home by eliminating commissions so again, the seller may not know the market and believe his home is worth far more than its actual appraisal value.

A seller of a FSBO needs to be aware of the many documents needed for an offer to purchase. They need to check with an attorney and learn their costs of obtaining and preparing for example, the residential property disclosure. The buyer also needs to check on the price of an attorney completing the offer to purchase. One buyer of a FSBO was very surprised to learn the costs of document preparation which is done by the agents in a traditional sale.
1 vote Thank Flag Link Thu May 30, 2013
The single handed best answer is selling or buying FSBO gives you NO protection!
0 votes Thank Flag Link Mon May 5, 2014
Hi Jan, I just placed one of my buyer under contract on a FSBO in Charlotte. The seller had multiple offers on his home and was only on the market a few days - some areas are really hot and I'm starting to see more FSBO's. I would recommend at least getting a free market analysis to give you a good idea of your homes worth - pricing it right heads off any potential appraisal issues that can kill a deal instantly. Realtors have great tools available to drive traffic to your property - I recently sent out an email blast through Listing Widget to 1392 agents within 5 miles of my new listing and was able to generate lots of traffic. We also have access to Listhub a Realtor tool that channels your listing out to all of the major homes search sites. Realtors working with buyers usually have their buyer set to get automatic emails too so as soon as something is listed you should get a barrage of potential buyers right off the bat. If you are in a hurry to sell I would list with an agent.
0 votes Thank Flag Link Sun Jun 2, 2013
Susan, You made some good points, BUT sending out a listing blast to 1392 agents is SPAM. Listings appear in MLS and agents are quite capable of finding them if they have a customer. Spamming your fellow agents is a bad idea. We get way too much of it without doing it to each other.
Don
Flag Mon Jun 3, 2013
The reality is that "getting on the MLS" will only be beneficial to you, if you are offering some form of compensation to a buyer's agent to ultimately bring you a performing buyer. The MLS is used exclusively by real estate agents, and if you aren't willing to pay them - they simply won't show your property to anyone.

Your question didn't specifiy whether you simply want to sell your home yourself, or if you want to save 100% of the commission. You can certainly save the listing side of the commission, but if you aren't willing to pay anyone who procures a buyer for you - you are eliminating a huge portion of qualified buyers who are working with real estate agents.

Selling your home FSBO can certainly be done with good results. It comes down to how much you value your time and energy. If you don't work, have nothing but time on your hands, and want to devote most of that time to marketing your home, coordinating the showings, and spending money up front to advertise - then I would say definitely go for it.

There will always be a certain percentage of people who want nothing more than to rid the world of real estate agents, lawyers, accountants, etc. etc. etc. These people envision a world where you do everything yourself, and never pay anyone for any type of service. The reality is however, that as long as there are people who don't have the time or desire to sell their own house, do their own taxes, and draft a will or represent themselves in court - there will always be a business need for these service industries.

At the end of the day it boils down to - do you want to try it yourself, save the money, and "maybe" do it right, or do you want to pay to ensure it is done right. The difference with a FSBO is you pay either way, however with a FSBO you pay upfront without guaranteed results.
0 votes Thank Flag Link Thu May 30, 2013
Ask an anti-agent question, and they will come out of the woodwork with every possible argument against FSBO. It all comes down to knowledge and marketing. If you know the comps, think and market like and agent and get yourself on the MLS, you can be successful. Easy job? No. Can it be done? Yes. Can it be successful? Yes.
0 votes Thank Flag Link Thu May 30, 2013
WHAT ABOUT USING THE FSBO WEBSITE FOR SELLING....WHAT IS THE REACH?
0 votes Thank Flag Link Thu May 30, 2013
Go on one of those FSBO websites and call a couple of the owners. Odds are they were sold years ago and the phone number is no longer in service.
Flag Thu May 30, 2013
Hi Jan: I truly do not know how many people are going to the FSBO website. But my educated guess would be, not many. If I'm a buyer, I want to see all my options, and the vast majority of options (maybe 95%??) would not be on the FSBO site. Brian Madeira
Flag Thu May 30, 2013
The only benefit you'll really get from buying a FSBO, is if the seller A. has the property priced correctly to begin with (this is usually never the case - they are typically unrealistically priced), and B. decides to reduce the already well-priced property by the amount they would have paid in commission - thus giving the buyer an exceptional deal.

This never happens of course - because the whole purpose of a FSBO, is to avoid paying the commission. If they don't want to give it to a real estate agent, they likely won't want to pass the saving along to the buyer either. Typically, most FSBO's are FSBO's for a reason. The sellers are often extremely unrealistic with price, and do not understand truly what it takes to get a property sold for the highest price possibly. Do some of them sell? Sure. Is it the "norm" - no.

Besides the commission, I see no benefit to selling your house FSBO - unless you like doing unneccesary work yourself.
0 votes Thank Flag Link Thu May 30, 2013
Hi Jan: It's tough to sell a home yourself (in our Charlotte market) due to the lack of market exposure. I would, at the very least, recommend paying a realtor a small fee to put the home in the MLS. Otherwise, you're relying on word of mouth and drive-by traffic. Also, while not true in every case, I would go so far as to say that there is a negative stigma associated with FSBO's as being overpriced with owners that are difficult to work with. Obviously, that is not always the case, but many realtors who have a buyer are not excited to try to work with FSBO sellers. Brian Madeira
0 votes Thank Flag Link Thu May 30, 2013
The benefits are one: money (and that's maybe, not always). And there are a TON of disadvantages: far better ability to advertise, your advertising money goes further, more customers, help with legal contracts, all that free advice, the physical work of showing, showing at times the customer wants (not when you can arrange it), having an agent between buyer and seller during negotiations, help with disclosures and other documents, the advantage of having a "extra set of eyes" look at the purchase.... and on and on. I am sure that as other chime in, they will come up with others that I have not thought of yet.
0 votes Thank Flag Link Thu May 30, 2013
Jan...your biggest disadvantages is exposure and expertise. A realtor has the ability to market your home to the thousands of other realtors that will help sell your property. They will also get you to close and take care of all the legal contracts.
0 votes Thank Flag Link Thu May 30, 2013
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