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A “For Sale By Owner” listing, aka the FSBO (“FIZZ-Bo”), is a controversial endeavor. The obvious benefit of cutting the agent out of the equation is not having to pay a broker’s fee, which is usually set at a standard of 5 to 6 percent. The rewards can be huge: If you’re selling a $350,000 two-bedroom condo in Fishtown, you’ll save a cool $21,000 if you sell as a FSBO.
When selling as a FSBO, enterprising brokers will call and ask if you’ll offer a 3 percent commission if they bring in a buyer. You need to decide firsthand if you would consider that much if that offends your delicate indie sensibilities (and wallet) and you are going indie all the way.
If you go the FSBO route, you better have a lot of free time and energy because you’re totally responsible for marketing the property, finding the sweet-spot price that gets the most money but is also going to move, holding open houses, and handling all the details that brokers are paid to organize. Unless you have a not-so-hidden desire to become a broker, it can be a trying process.
“[Selling FSBO] is the craziest thing to even try to attempt,” says Jennifer Nehila of Keller Williams in Philadelphia. “If you look at statistics, 7 percent of people manage to do it. It happens once in a while, but it’s such a headache and you already have to hire a real estate attorney to do the paperwork.”
Another thing: Listing agents invest in the sale of your property up front, and not just in time served. (Who do you think is buying the cookies and juice for open houses?) Since agents only get paid if the house sells they are, in essence, loaning you the cost of putting your house on the market and getting eyeballs on pictures of it and feet (belonging to pre-qualified consumers presumably interested in purchasing a house) into the door. If you go FSBO, tally up the costs of producing marketing materials, hosting open houses and the like, and figure out if you are willing to put up the costs up front.
Also remember that agents are not exactly knocking each other over trying to drag their clients to see FSBO properties. They don’t care if it has a moat stocked with neon tropical fish and hedges cut into shape of the human heart and you happen to be an eccentric cardiologist fish-loving hermit looking for just such a thing. Even though technically they’re not supposed to work it this way—something about ethics, blah blah blah—don’t count on agents cluing you in if they expect to get scotched on a commission.
That said, there are FSBO advocates out there in this big wild world. The website FSBOprimer.com lists challenges the oft-quoted statistics against FSBO sales and lists the reasons to go solo. The number one reason, of course, is to save the commission cash.
But FSBO believers also say you’ll keep your options open, be free to purchase services a la carte and not have to worry about getting locked into a sour relationship with an ineffective broker.