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When selling your home, you can choose to work with a real estate agent or sell it yourself. For sale by owner, or FSBO, isn’t very common, but it can save you money on the listing agent commission and it gives you complete control over the selling process.
According to the National Association of Realtors (NAR), FSBOs accounted for only 7% of home sales in 2023. Sellers who choose this route mainly do so to save on the listing agent’s commission. For real estate agents, commissions are typically between 5% and 6% of the sale price, although this could change depending on a recent NAR settlement which may see commissions drop, Yahoo Finance reported. On a $500,000 home, the agent commissions could cost $25,000 to $30,000. This money is typically taken from the proceeds of the sale.
Interested in selling your home without a real estate agent? Follow these steps and (hopefully) save money in the process.
Set the Listing Price
One of the most difficult tasks for FSBO sellers is getting the price right. The NAR’s 2023 Profile of Home Buyers and Sellers found that 15% of FSBOs have trouble setting the listing price.
Normally, a real estate agent will conduct a comparative market analysis (CMA) to price your home. A CMA estimates a home’s price based on similar, recently sold properties in the same area. Real estate agents put this information together in a CMA report to help sellers set competitive listing prices.
Sellers can perform a CMA themselves or hire a professional real estate appraiser to provide an objective and unbiased estimate of the property’s value.
Prepare the Home for Sale
Once you set the listing price, you will need to start preparing the home for listing and showings. This can include making necessary repairs, cosmetic updates, a fresh coat of paint, landscaping and other small improvements to boost your home’s curb appeal and make it more appealing to buyers.
You will also need to take pictures to help your home stand out in online listings. You can either take the photos yourself or hire a professional photographer.
List and Market Your Home
Homeowners will need to create a listing and market their home to attract prospective buyers. According to NAR data, the most common FSBO methods used to market a home are through friends, relatives or neighbors, yard signs and through a third-party aggregator. However, you’ll get more visibility by listing your property on the multiple listing service (MLS).
According to U.S. News & World Report, you can typically list your home on the MLS for a $200 to $500 flat fee, but you’ll likely need to pay a 2% to 3% commission to the buyer’s agent.
Respond to Buyers
Buyers or their real estate agents will start calling or emailing you directly about the property. You’ll need to be responsive and set up showings around your schedules. If you wait too long to respond, they may move on to the next property.
Negotiate
FSBO sellers should be prepared to negotiate the price with buyers. When an offer is made, you’ll typically have two to three days to respond. Keep in mind that the highest offer isn’t always the best. The offer may come with contingencies, which could impact the sale of the property. Contingencies are clauses that buyers include when making an offer. They allow them to back out of the sale if the clauses aren’t met.
Hire a Real Estate Attorney
Federal and state law require sellers to meet certain legal requirements when selling property. Some states, including New York and Georgia, even require the sale to be overseen by a real estate attorney, according to U.S. News & World Report. If your state doesn’t require it, a real estate attorney can ensure you’re following the correct procedures and offer guidance.
Attorney fees vary, but many charge a flat fee or on an hourly basis.
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