If you’re wondering how FSBO sites work, you’re not alone. “For Sale by Owner” makes good sense to many sellers in today’s robust real estate market.

Most people remember that selling your property always required a professional real estate broker. The seller paid a commission for the service, usually about six or seven percent of proceeds from the sale. In real estate bull markets, the seller often came out ahead. It was often worth the commission to have an experienced seller to do the work of marketing and selling a house.

You May Not Need a Realtor

It’s not always necessary to hire a real estate agent. For instance, the supply of available homes may have recently dropped in your market, and you may have received unsolicited indications of interest from people who want to know if are you planning to sell your house.

The idea of selling your home without paying the listing agent’s commission is tempting for several reasons. It’s not just about the money, but the money is a consideration. For instance, if you sell your house for $250,000 without a seller’s agent, you could save $15,000 to use elsewhere. Just realize an important caveat. Successful FSBO sellers know or soon learn they’ve got to do the marketing, preparation, and photography to introduce their home to buyers.

Let’s face it. Many homeowners don’t trust sales people, especially real estate salespeople. Some real estate agents seem quite new at their work. Others are so busy it’s challenging to get them on the phone.  Real estate can sometimes be so easy to get into and easy to get out of, that it can be easy to be less committed while there.

Successful real estate agents might not have the seller’s best interests at heart. He or she might be less interested in getting top dollar for your property than getting ANY dollar.  The immediate goal is to get qualified buyers to the table as quickly as possible. A higher sale price won’t substantially change his or her commission. The time value of when the agent gets his or her smaller cut is very important as well.

Realize that selling your home without a real estate salesperson will take more work:

• Properly price your home for the market.
• Don’t overprice your home—it will take longer to sell and undermine leverage in negotiating a sale later.
• Stay flexible, and lower your price in time, if necessary to attract interested buyers.
• Have for a professional appraisal done.
• Visit open houses to get a better idea of current prices.
• Use the Internet to continue your research about prices.

How to Use For-Sale-By-Owner (FSBO) Sites

• Let us say the homeowner decides to list a home for sale without a real estate agent. He or she just decides to sell directly to prospective buyers.
• When the buyer and seller reach an agreement, the parties prepare a contract to detail the agreement. Both parties may consult an experienced real estate attorney to follow the agreement.
• Parties in the agreement schedule a closing agent to transfer title, ownership, and possession of the property as per the agreement and area of the country.

The seller should understand that most buyers will need to obtain a mortgage. Fewer buyers will have cash to pay for the home in full. The mortgage lender will protect its interests. The process will include home inspections:

• If repairs are necessary, the buyer will ask for repairs before proceeding with the purchase.
• The seller will be required to make reasonable accommodations for these steps to be performed. He or she should consider whether it’s in his or her best interest to make repairs desired by the buyer.

Closing is usually dictated by the buyer’s mortgagee. That is, when the lender makes the money available to close the home purchase, the buyer, seller, attorneys, and lender representatives will meet to complete the closing transaction.

The Worries of a FSBO

There are plenty of reasons to use a  real estate agent. For example, you’ll need to consider liability, proper disclosure, and state and local ordinances involving the sale of your home even before opening the door to prospective buyers.

Determining the fair market value of your home is a complex topic. Your next door neighbor might have gotten top dollar for his home because of a lot of unseen activities.  That may skew your perspective of the values.

You may also ask if you are getting a fair deal or if all the terms of my contract are being met?” Understanding your legal obligations and options is one of the very best reasons to hire a real estate lawyer to protect your interests in the transaction.

It may or may not be in your best interest to hire a real estate agent. However, before you agree to list with anyone, check out your prospective agent’s track record. Read any reviews. If in doubt, ask him or her for a few references—and then call each one before making a decision.  You will have to live with your decision for an exclusive period of time.

FSBO Web Sites

Owners have a wide range of FSBO web site options. If you’re ready to do the work necessary to market your home to prospective buyers, check out some of the different sites:

• Some FSBO sites are totally independent and not even connected with the MLS, but dependent on their own traffic.
• Some do list properties property into the MLS with several flat fee packages.
• The “Agency” is the relationship the seller has with the broker who is licensed to use the MLS.  “MLS entry-only” is a type of agency relationship that classically does NOT include any help to the seller, other that getting the house into the MLS, so be knowledgeable of what you are signing up for.  Do your homework!
• Agencies and brokers are licensed for a particular state.  If you signed up with a broker in Florida, he would probably refer your business out to a broker in the state where your property is.
• In Tennessee you could compare to Martin Properties at mlsDon.com.  He is our favorite, and has been in business over thirty years.  He is only licensed in Tennessee, but has written many FSBO books, and counsels people all over the country in person and through this blog/website.

We really don’t consider ourselves or our FSBO peeps cheap or stingy, but rather a good steward of our equity, a blessing for us to have and care for at this time.