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“Hello… I’m going to sell my late mother’s home in September. I know you don’t want to hear this, but I plan sell it without a broker to save the 6%. One of my neighbors did, and he didn’t know anything about real estate, so it can’t be too tough. I’ll just get the escrow officer or attorney to handle all the details. What escrow company do you use? Thanks for your help, and if things don’t work out I’ll call you.”
***ANSWER:
Now understand that I’m biased, but everything I’m about to tell you is 100% true:
I used to teach a class on selling “For Sale By Owner” (FSBO). In it, I explained the 5 myths of trying to sell By Owner. You actually mentioned four out of those five. Here they are…
The 5 For Sale By Owner Myths:
1. “I’ll save the 6%”
Yes, some do indeed save 6%. But statistics show that the average FSBO sells for 5% less than people do with an agent. And about half pay 3% to an agent who brings them the buyer. Even if you don’t include advertising and other added costs, for all the time and trouble invested, at best the average FSBO saves ZERO!
2. “When you see a FSBO sell, they were successful”
Many people see a house sell FSBO and think they were “successful”. What they don’t see is that the owner probably paid a buyer’s agent 3%, may have undersold the home, and probably had lots of problems, delays, and extra expenses. But all the neighbors see is the moving truck, so things must have gone well.
3. “It’s easy”
Pricing… preparing… marketing… showing… interpreting market feedback… negotiating… qualifying the buyer… contracts… disclosures… transaction management… paperwork… risk management. Done right, it is NOT an easy job.
4. “Agents make 6% and are overpaid” (You didn’t mention this one.)
I actually agree that many agents are overpaid. But remember that real estate commissions are usually split. So at 6%, each firm gets 3%. Then it’s divided between the firm and the agent. Then subtract costs involved. RESULT: the average agent nets all of 1-1.5% after expenses when they represent a buyer or seller.
5. “I’ll have escrow or an attorney handle everything”
Sorry. Escrow is but a small part of a home sale. And many escrow companies hate FSBO sales due to all the problems and cancellations. Real estate attorneys generally know real estate law, but not real estate PRACTICE. Few are qualified to handle a real estate transaction. Just as you wouldn’t want me handling your real estate lawsuit, don’t expect an attorney to handle your real estate sale.