Marsha, my husband and I are in a situation where we want to sell our condominium for as much money as possible. We’d like to save the real estate commission and sell the home ourselves. Is there really any reason why we couldn’t do this?
So you would like to be a FSBO (for sale by owner). There is no reason why you couldn’t sell your own home, but there are many reasons why you probably shouldn’t. You will ultimately do a lot of work and likely net less money than if you had employed a Realtor. Statistics show that agents are able to net more money for sellers, even with the commission, than if the sellers represent themselves.
Real estate commissions are negotiable. The standard commission in our area is between five and six percent of the selling price. Let’s say your condo sells for $500,000 with a five percent commission. That means your agent will earn $25,000 in commission. The buyers will probably have their own agent, who will take half of that $25,000. As a FSBO, you will also need to give a buyer’s agent at least $12,500. Why? Because you need the buyers’ agents to show the house or it will never sell.
What if a buyer has no agent? Now you can save the entire $25,000 and get top dollar. Probably not. The buyers know you are saving the real estate commission. They’re going to want a deal too. So in the end you’ll probably end up making less money.
But at least you’ll work hard for it! To market the home, you will need photos and flyers to post on all the real estate sites. Put a large sign out front with your personal contact information and be available to show your home at a buyer’s convenience. You’ll want to have regular Sunday open houses and when you receive an offer be sure to verify the buyer’s financial qualifications.
Realtors act as buffers between the purchasing and the selling principals. FSBOs have a high rate of escrows falling out of contract because it’s difficult for sellers to keep their emotions out of the process. It’s easy for the seller and buyer to misinterpret situations. People become offended and stop thinking in their own best interests. Full time real estate professionals are there to negotiate on your behalf and present comments and rejections in a calm and neutral manner.
Most importantly, Realtors work hard to keep you out of court. There are many disclosures you are required to make whether you have representation or not. Your agent will keep you from accidently being negligent or breaching a contract.
Hire an experienced agent. It is money well spent. You’ll net more, enjoy your time and be professionally represented and protected.