What Is For Sale By Owner (FSBO)?
For Sale By Owner (FSBO)
Understanding For Sale By Owner (FSBO)
For sale by owner or FSBO is when an owner of a piece of property chooses to sell the property on their own without hiring an agent or a broker to facilitate the sale. A seller may choose to sell on their own for various reasons, but most often a seller chooses to forgo the services of an agent or a broker because they want to avoid paying the commission for the transaction, which can be quite high.
We most commonly see for sale by owner transactions on the real estate market. Though it may be a daunting task, it is possible to sell one’s home on one’s own. If one wants to keep that commission price and chooses to sell on their own, there are important steps one must take. First, an individual needs to determine the correct asking price, among the most important pieces of information necessary for a seller to get started on this process. For example, Multiple Listing Service can help an individual determine a sale price, and also has information on how to markets one’s home and how to deal with the legal paperwork and contracts for a flat fee.
Why Choose to Sell Your Own Home?
When an individual homeowner chooses to sell a house, traditionally they hire a real estate agent or broker to handle the sale. Going through an agent or broker can save a homeowner a lot of time; however, commissions can eat heavily into the seller's profits, often around 6 percent of the sale price. For example, if you sell a home for $500,000, the buyer's and seller's agents would receive $30,000 of that sale. If you choose to handle the sale yourself, you would get to keep the whole $500,000. That amount of savings can be tempting, though it is important to remember that when a seller does not use a real estate agent, the seller assumes all the responsibilities of completing the transaction, which can be a daunting task for those unfamiliar with the home buying and selling process. Depending on the experience of the seller, avoiding the commission can be a wise financial decision. Those who have little knowledge about real estate transactions, however, can find the situation stressful and may be better off using a qualified real estate agent.