Being a FSBO seller simply means you are selling a property without a real estate agent, to wit, for sale by owner or FSBO for short. The advantage of being a FSBO seller is you avoid paying the traditional six percent commission charged by real estate agents. On a $400,000 home, this equates to a savings of $24,000. In simple financial terms, we are talking about a significant savings.
Roughly a year ago, a survey was taken of homeowners. The survey asked said individuals how they intended to sell their home if they eventually decided to do so. Over 30 percent indicated they would sell their homes without a real estate agent. The primary reason given was the market was so hot that there was no need for a real estate agent. With houses being sold after being on the market for less than a week, this logic certainly made sense and was utterly true. Now that the real estate market has cooled off, does the same hold true? Yes.
It is no secret that the great real estate boom has cooled off dramatically. It is taking longer for homes to sell. Demand is fairly weak and prices are starting to fall. A real estate agent will tell you this is when they are of the most value to you, but is this true? No, it is not.
In a buyer's market, price pressures are real and can cause sellers to give away much of their equity. This occurs when they panic because their home does not sell or even get interest from potential buyers. The suggestion of the real estate agent is to drop the asking price. While this may be the correct move, the problem is doing so greatly reduces the profit off of the sale. You have worked long and hard to build equity in your home. Are you really willing to give it away so easily?
In a down market, FSBO sellers have a major advantage over sellers using real estate agents. The advantage comes in the form of flexibility. Simply put, the money that would otherwise be paid as a real estate agent commission can be built into the asking price. As a FSBO seller listing a $400,000 home, you have $24,000 that would otherwise go to a real estate agent to play with when lowering your asking price. In many markets, this can mean the difference between a property sitting on a market and being sold.
As the real estate market cools, individuals considering selling their home should be looking at the FSBO option. The flexibility provided could make the difference between a sale and sitting on the market.
