There are multiple reasons why an FSBO or For Sale By Owner does not usually work. The theory is actually quite good in that an owner is going to try to sell the property in order to avoid paying the real estate agent's commission. The real estate agent's commission can be somewhere around 5%. If the owner is selling a $ 400,000.00 home, that is a hefty 20,000 dollars that will usually go into the home owner's pocket.
Interestingly enough, most homeowners who are conducting an FSBO and have had trouble selling a home will agree to pay someone who approaches them and offers to help find a buyer for the home. Astute real estate agents will often approach a home that is For Sale By Owner and offer such help. However, the agent will more than probably be working for a buyer and you will end up working against yourself.
Moreover, most homeowners do not necessarily know what a real estate agent normally does in a real estate deal. Although a real estate deal is not rocket science, it sometimes involves very intricate legal aspects that a layperson may not even be aware of. It simply means that you must be prepared to do all of the things that a real estate agent normally does without having the experience that the agent has.
If you are unaware of the legalities involved a real estate transaction, you would have to pay a real estate attorney. It is either that or doing the legal research that is required. Either way, you would be spending money on research or on the attorney's fees and there goes some of the money you would have saved by not hiring an agent.
You will need some sort of marketing plan if you want to sell your home quickly and efficiently. You would have to start by setting a fair market price, but to do that you would first have to determine fair market prices in your particular area. Is your home comparable to those in your area? Do you even know how to go about setting a fair market price? Once you do that, you need to make signs, post flyers, find out how to list your house, possibly advertise on the Internet and so on. This involves both time and money, and there goes more of the money you were supposed to have saved by not hiring an agent.
It is also a good idea, if you are going to do an FSBO, to prepare a brochure which lists your home's special features. You would want to list taxes, assessments, school districts, size of rooms and other amenities your home might have and there goes more time and another chunk of the money you would have saved.
The recurring word in all this has been time and it is a commodity that most people simply do not have in today's day and age, unless you are retired and have lots of free time. If not, you are probably busy with your career, the family and every day activities. An FSBO will only work if you have the time to dedicated to making it work.
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Source by Marco D Benavides