For Sale By Owner (FSBO) Advantages & Disadvantages
You are note required by law to hire a real estate agent to sell a property. When you sell on your own, this is referred to as For Sale By Owner (FSBO). There are advantages and disadvantages to doing a FSBO.
ADVANTAGES OF FOR SALE BY OWNER1) The biggest advantage to selling a property on your own is the money saved on commission. No matter how you look at it, the 5%, 6% or even 7% on the sale of a home is a lot of money.
2) You are personally involved in the communications with buyers or their agents. You will always feel like you are in the loop and actively involved in what's going on.
3) When potential buyers are visiting the property, they can get the owner's perspective of both the home and the neighborhood. No one knows the property better than you, and you will be the direct source for answering any questions about it.
4) Selling on your own might eliminate the frustration that can sometimes come with working with an agent. Many people decide to sell without an agent because of a negative experience they had in the past while working with an agent. Perhaps they doubted the agent's commitment to their best interests and suspected ulterior motives.
5) You are in control of the terms and language included in the transactional documents. If you list with an agent, you will have to use specific forms with boilerplate language that often benefits the buyer.
DISADVANTAGES OF FOR SALE BY OWNER1) You will have to take on the duties that would otherwise be handled by a seasoned professional. This includes marketing the property, showing the property, negotiating terms, drafting documents and facilitating the transaction. That is not to say that you will not be able to do these things, it is just that you don't have the benefit of having handled numerous sales in the past.
2) You will have to make a conscious effort to step back and try to take an objective view of the desirability of your property and how much it is worth. You will naturally have a biased view of the value and market appeal of the property.
3) Your property might get passed over and not shown by buyer's agents. These agents might be concerned that you are unwilling to pay them the commission they would expect to receive from a home that is listed with another agent. Buyer's agents might also be concerned with the idea of having to do more work in facilitating the transaction since they are working with someone who is less experienced in selling homes.
4) Once you put a sign and some online listings up, you will be inundated with agents wanting to solicit your business and list the home. This can be a nuisance and time stealer when you would rather put you time into talking with potential buyers.