For Sale By Owner

[2lazy2retire]

Thinking of listing our house next spring and figured we might try the FSBO option, at least for a few months. Biggest challenges I see are 1/ getting the price right and 2/ how much to offer any potential buyers agent.

Pricing - my plan was to have a number of local  agents ( around 3 ) appraise my house for sale and go through their usual spiel - then advise them that we plan to list by owner but will consider them if we decide to use a realtors services. In any event I would have a number of agents appraise the house before listing, but am I been sneaky by advising them of this after a suggested listing price has been mentioned?

Other option would be to use Redfin as listing agents at 1-1.5% and 2.5% for buyer's agent - that gets me to 4% but still better than 6%.

Anyone had any experience on FSBO or Redfin?

As for the house - its updated and in a popular area, so if priced right will sell in good time.

[Shane]

We just signed a contract to have a realtor list our home for sale a couple of days ago. He told us that if we didn't offer at least a 3% commission to the buyers' agent, few agents would bring their clients to see our property. It may be different in different markets...

[tipster350]

As a buyer, I have come to steer clear of FSBOs. My experience has been that the sellers tend to be unrealistic in their asking price, and cheap/difficult to deal with in the process. I would rather have agents on both sides work through some of the details. It is not worth it to me to have to deal with a buyer directly or to have my agent demotivated by a crappy commission deal.

[CanuckExpat]

Thinking of listing our house next spring and figured we might try the FSBO option, at least for a few months. Biggest challenges I see are 1/ getting the price right and 2/ how much to offer any potential buyers agent.
...
Other option would be to use Redfin as listing agents at 1-1.5% and 2.5% for buyer's agent - that gets me to 4% but still better than 6%.

Anyone had any experience on FSBO or Redfin?

As for the house - its updated and in a popular area, so if priced right will sell in good time.

Can't help you too much on the selling side, but we used Redfin as buyers (first time buyers), was very impressed overall and getting the rebate for part of the commission was a nice touch.
Doing it again (as a buyer) would maybe also consider something like http://www.hungryagents.com/ to get a bigger discount. I think they also do selling.

I've somewhat been researching FSBO alternatives, someone had mentioned this: http://places.me/
There's probably a few alternatives, I think the hard part will be hitting the right market.

Let us know what you find!

[paddedhat]

Much like the old "location, location, location" comment about the three most important things in real estate, I think the same applies to FSBO. I live is an area with oversupplied inventory, low prices, and very little in the way of FSBOs. I have built new homes and speculated on other property here, so I know a bit about the local agent scene. Bottom line here is that successful agents try to first move their own inventory, then their agency's. They will go so far as to attempt to blackball local listings from out of town realtors, and they will only show a FSBO IF the buyer found it online, or otherwise discovered it themselves, and the seller has signed a 3% commitment.  JMHO, but here you eliminate the vast majority of potential buyers when you go FSBO. I'm sure other markets are quite different.

[index]

Much like the old "location, location, location" comment about the three most important things in real estate, I think the same applies to FSBO. I live is an area with oversupplied inventory, low prices, and very little in the way of FSBOs. I have built new homes and speculated on other property here, so I know a bit about the local agent scene. Bottom line here is that successful agents try to first move their own inventory, then their agency's. They will go so far as to attempt to blackball local listings from out of town realtors, and they will only show a FSBO IF the buyer found it online, or otherwise discovered it themselves, and the seller has signed a 3% commitment.  JMHO, but here you eliminate the vast majority of potential buyers when you go FSBO. I'm sure other markets are quite different.

If you are selling a house to the under 50 crowd then I am not sure this applies. Most buyers in the age group are computer savvy and do their shopping on the internet. Realtor commissions are on their way down as the market shifts online. 25 years ago, the only way to list a house was the newspaper. Open houses were held so realtors could view listings and take notes for clients. They actually had to sell houses and provided their clients a service. Today realtors just chaperon their clients to listings the clients find on the internet and should consider themselves lucky to get even a 2% commission.   

[The_path_less_taken]

Much like the old "location, location, location" comment about the three most important things in real estate, I think the same applies to FSBO. I live is an area with oversupplied inventory, low prices, and very little in the way of FSBOs. I have built new homes and speculated on other property here, so I know a bit about the local agent scene. Bottom line here is that successful agents try to first move their own inventory, then their agency's. They will go so far as to attempt to blackball local listings from out of town realtors, and they will only show a FSBO IF the buyer found it online, or otherwise discovered it themselves, and the seller has signed a 3% commitment.  JMHO, but here you eliminate the vast majority of potential buyers when you go FSBO. I'm sure other markets are quite different.

If you are selling a house to the under 50 crowd then I am not sure this applies. Most buyers in the age group are computer savvy and do their shopping on the internet. Realtor commissions are on their way down as the market shifts online. 25 years ago, the only way to list a house was the newspaper. Open houses were held so realtors could view listings and take notes for clients. They actually had to sell houses and provided their clients a service. Today realtors just chaperon their clients to listings the clients find on the internet and should consider themselves lucky to get even a 2% commission.

Not a realtor but wow, index: any idea how much time/energy/gasoline goes into dragging people around?

My agent probably showed me 23 properties. And half of them were things I'd found on the internet myself....but it still took her time etc to get the keys, arrange a showing, etc.

Broken down into an 'hourly' wage it isn't much, if you figured it all in.

And ironically, I found this property by taking a wrong turn and getting lost in the boonies....it sort of called out to me and I insisted she find out about it and show it to me.

[paddedhat]

Much like the old "location, location, location" comment about the three most important things in real estate, I think the same applies to FSBO. I live is an area with oversupplied inventory, low prices, and very little in the way of FSBOs. I have built new homes and speculated on other property here, so I know a bit about the local agent scene. Bottom line here is that successful agents try to first move their own inventory, then their agency's. They will go so far as to attempt to blackball local listings from out of town realtors, and they will only show a FSBO IF the buyer found it online, or otherwise discovered it themselves, and the seller has signed a 3% commitment.  JMHO, but here you eliminate the vast majority of potential buyers when you go FSBO. I'm sure other markets are quite different.

If you are selling a house to the under 50 crowd then I am not sure this applies. Most buyers in the age group are computer savvy and do their shopping on the internet. Realtor commissions are on their way down as the market shifts online. 25 years ago, the only way to list a house was the newspaper. Open houses were held so realtors could view listings and take notes for clients. They actually had to sell houses and provided their clients a service. Today realtors just chaperon their clients to listings the clients find on the internet and should consider themselves lucky to get even a 2% commission.

Could be true in your market, but nothing to do with mine. First, up until recently I built new homes, typically spec. houses, and always marketed with a realtor. Your concept of the over 50 crowd is way off, in that the vast majority of all my buyers, the majority over fifty, were tremendously tech. savvy. They typically had a long list of places that they previewed online, before sitting down with a realtor. Many of my buyers wouldn't even think of dealing with a FSBO, and are not comfortable making an offer on anything until they have been with a realtor, and developed a pretty good knowledge base regarding values, what areas are more desirable, and a lot of other inside information, that you don't get staring at Zillow. Your comment about how agents are just chaperones that should be lucky to get 2% makes it pretty clear that you don't have a clue as to how hard a truly successful agent works. I have had agents come up with solutions, and pull deals off the edge of a cliff, that absolutely would of fallen apart without their experience, and hard work. These same agents also will prequalify any potential buyer so I don't have to waste my time with somebody that can't afford to buy my homes.

tipster350 pretty much summed up my experience when dealing with several FSBOs in my area.  It was pretty common to be in the process of building a new spec. home and have the local neighborhood "expert" show up and tell me what an idiot I was to be building a spec. home, since the market is dead. This is usually followed by how he had his home for sale for a year, and nobody even bothers to show up. At this point it's game on, and I slowly toy with they guy until the truth comes out. First, without fail it was a poorly marketed (if at all), overpriced, FSBO. It never fails that I will hear about how all realtors are thieves, and they just want to give the place away. Or "some builder just got $200K for a house down the street. It is exactly like mine, and the realtor only wanted to list mine for $169K". The fact that this $169K house is ten years old, and has the shit beat out of it is not part of the FSBO seller's reality, in the least. I know that there are plenty of rational, intelligent sellers out there that want to go the FSBO route, and some will succeed. But, Tipster reflects the experience of a lot of buyers out there. They tried to deal with a FSBO seller, and found out that many of them are irrational F-ups, and not worth the wasted time.

[reader2580]

One thing about FSBO houses is I don't think the seller saves as much as they think.  The seller thinks they are saving 6% or 7% commission, but they will probably sell it for less due to less publicity and buyers expecting a discount.  Buyers know the seller isn't paying a commission so they will offer less money.  If the seller is willing to pay a buyer's agent that is typically 2.75% in my area.

I tried to sell my house in 2008 and the realtor then said studies have been done and the commission should be more like 1% to sell a house.  The realtor who sold my house in 2014 seems to be doing pretty well.  He primarily sells houses and has another agent that works with him that takes buyers around.  He has a $400K+ house that he has probably spent $100K on remodeling and is starting on another $100K remodeling project.

[index]

Much like the old "location, location, location" comment about the three most important things in real estate, I think the same applies to FSBO. I live is an area with oversupplied inventory, low prices, and very little in the way of FSBOs. I have built new homes and speculated on other property here, so I know a bit about the local agent scene. Bottom line here is that successful agents try to first move their own inventory, then their agency's. They will go so far as to attempt to blackball local listings from out of town realtors, and they will only show a FSBO IF the buyer found it online, or otherwise discovered it themselves, and the seller has signed a 3% commitment.  JMHO, but here you eliminate the vast majority of potential buyers when you go FSBO. I'm sure other markets are quite different.

If you are selling a house to the under 50 crowd then I am not sure this applies. Most buyers in the age group are computer savvy and do their shopping on the internet. Realtor commissions are on their way down as the market shifts online. 25 years ago, the only way to list a house was the newspaper. Open houses were held so realtors could view listings and take notes for clients. They actually had to sell houses and provided their clients a service. Today realtors just chaperon their clients to listings the clients find on the internet and should consider themselves lucky to get even a 2% commission.

Not a realtor but wow, index: any idea how much time/energy/gasoline goes into dragging people around?

My agent probably showed me 23 properties. And half of them were things I'd found on the internet myself....but it still took her time etc to get the keys, arrange a showing, etc.

Broken down into an 'hourly' wage it isn't much, if you figured it all in.

And ironically, I found this property by taking a wrong turn and getting lost in the boonies....it sort of called out to me and I insisted she find out about it and show it to me.

For a sellers agent listing fees and advertising are $400-2500 depending on how aggressively they advertise.

For a buyers agent, lets be generous and say they spend 3 hrs per showing and have 50 showings so 150 hours invested; then throw another 50 hours for closing details again being generous so 200 hours to make a sale.

I understand 6% commissions, or minimum commissions in areas where houses are selling for 100-150k, but in many cities they are selling houses for 3-600k. On a 300k home this works out to 9k to each the buyers and sellers agent. That's $45/hr on a pretty generous estimate of time spent for the buyers agent. $6500 after expenses for the sellers agent who held say 3 open houses spending 10 hours on each so they are making over $200/hr. There is a reason the more seasoned realtors most often act as listing agents.

[Goldielocks]

I think a FSBO is the right way to go, for a  very short time.

My dad sold his house FSBO, and sold it in 2 weeks to someone who lived 10 blocks away that wanted to "move up" into a nicer street / size of house.
He advertised by putting up an ad in the BUSINESS section of the paper, (it was an exec style home),word of mouth,  and by an ad in the local neighborhood paper.

I sold a townhouse, NOT FSBO, but I should have, as it sold within a week to a neighbor in a smaller, un-renovated townhouse in the same complex.   A sign in my window would have drawn out this person to talk to me directly. Heck, I could have just announced it in the HOA newsletter.

So, I would definitely FSBO, with an open house you host and a few local ads / sign on the lawn.  The whole point is to get an interested buyer ALREADY IN YOUR AREA to come and look / buy.  In no one bites in 2 weeks, then try the next level.

Once you start to need a buyers agent to bring people to showings, etc. then you may as well go with at least a low fee MLS listing only type of agent who will charge the 3% buyers fee plus a flat rate or 1%.

[paddedhat]

For a sellers agent listing fees and advertising are $400-2500 depending on how aggressively they advertise.

For a buyers agent, lets be generous and say they spend 3 hrs per showing and have 50 showings so 150 hours invested; then throw another 50 hours for closing details again being generous so 200 hours to make a sale.

I understand 6% commissions, or minimum commissions in areas where houses are selling for 100-150k, but in many cities they are selling houses for 3-600k. On a 300k home this works out to 9k to each the buyers and sellers agent. That's $45/hr on a pretty generous estimate of time spent for the buyers agent. $6500 after expenses for the sellers agent who held say 3 open houses spending 10 hours on each so they are making over $200/hr. There is a reason the more seasoned realtors most often act as listing agents.

Well, for a very small percentage of sales, nationwide, your figures are somewhat correct. Two problems though. First, an agent doesn't get anywhere near three or six percent of a sale. Mine claimed that they lose at least a third to the agency, right off the top, not including marketing fees and other costs. Second the average house sold in this country is nowhere near $3-600K. By the time you back out the actual percentage a agent makes, and index it to the average sale price, most would get a good giggle out of your figures.

[Axecleaver]

Listed on Zillow this summer, had a buyer's agent in my driveway within a day. Offered him 3% on the spot if the deal closed, ended up closing for list price. Best money I ever spent. We priced our home to move, and it did.

Consider hiring a photographer, because that's the primary marketing tool available to you. The comment above that realtors will try to move their own inventory first, then their agency's inventory, and finally any property that offers 3%, is dead on.

Do your own comps, but only if you can be realistic about your ability to identify comparable properties and remove emotion from the equation. Do not use your county's assessment or the zillow guesstimates, use only comparable homes that have sold in the last six months (two months if possible).

When you think you have the price figured out, take a look online in your zipcode for things within 20% of your selling price. If you find lots of better stuff for the same or less money, it's probably too high. Keep in mind that people often overprice their homes, so the inverse of this (look to see if there's lots of worse stuff for more money as an indicator that the price is too low) is not true. Good luck and let us know how it ends!

[2lazy2retire]

I think a FSBO is the right way to go, for a  very short time.

My dad sold his house FSBO, and sold it in 2 weeks to someone who lived 10 blocks away that wanted to "move up" into a nicer street / size of house.
He advertised by putting up an ad in the BUSINESS section of the paper, (it was an exec style home),word of mouth,  and by an ad in the local neighborhood paper.

I sold a townhouse, NOT FSBO, but I should have, as it sold within a week to a neighbor in a smaller, un-renovated townhouse in the same complex.   A sign in my window would have drawn out this person to talk to me directly. Heck, I could have just announced it in the HOA newsletter.

So, I would definitely FSBO, with an open house you host and a few local ads / sign on the lawn.  The whole point is to get an interested buyer ALREADY IN YOUR AREA to come and look / buy.  In no one bites in 2 weeks, then try the next level.

Once you start to need a buyers agent to bring people to showings, etc. then you may as well go with at least a low fee MLS listing only type of agent who will charge the 3% buyers fee plus a flat rate or 1%.

This is my thinking also, might as well see if we can flush out a couple of local potential buyers before going MLS, we have a local neighborhood website so I think we will start there along with zillow. Going back to one of my original questions, would it be considired ethical to have agents appraise the house and then advise them we are going to list FSBO at least initially.

thks

[GoldenStache]

My agent probably showed me 23 properties. And half of them were things I'd found on the internet myself....but it still took her time etc to get the keys, arrange a showing, etc.
Broken down into an 'hourly' wage it isn't much, if you figured it all in.

My agent showed me 5 houses in the span of 3 hours.  Broken down on an hourly wage, including initial and closing meetings probably cleared well over $2k an hour.  YMMV

[2lazy2retire]

My agent probably showed me 23 properties. And half of them were things I'd found on the internet myself....but it still took her time etc to get the keys, arrange a showing, etc.
Broken down into an 'hourly' wage it isn't much, if you figured it all in.

My agent showed me 5 houses in the span of 3 hours.  Broken down on an hourly wage, including initial and closing meetings probably cleared well over $2k an hour.  YMMV

I think this is what the listing agent should be doing , ie showing the house they are marketing, no?. A buyers agent is the biggest scam out there but I have to admire the brilliance of it, suck in all the buyers as Hey  - you don't have to pay, try charging the buyers for an agent and then see how valued their "services" are. It's just a way to suck an extra 3% out of the seller.

[Shane]

I think a FSBO is the right way to go, for a  very short time.

My dad sold his house FSBO, and sold it in 2 weeks to someone who lived 10 blocks away that wanted to "move up" into a nicer street / size of house.
He advertised by putting up an ad in the BUSINESS section of the paper, (it was an exec style home),word of mouth,  and by an ad in the local neighborhood paper.

I sold a townhouse, NOT FSBO, but I should have, as it sold within a week to a neighbor in a smaller, un-renovated townhouse in the same complex.   A sign in my window would have drawn out this person to talk to me directly. Heck, I could have just announced it in the HOA newsletter.

So, I would definitely FSBO, with an open house you host and a few local ads / sign on the lawn.  The whole point is to get an interested buyer ALREADY IN YOUR AREA to come and look / buy.  In no one bites in 2 weeks, then try the next level.

Once you start to need a buyers agent to bring people to showings, etc. then you may as well go with at least a low fee MLS listing only type of agent who will charge the 3% buyers fee plus a flat rate or 1%.

This is a really good idea.

A couple years ago my dad met a guy on the sidewalk in front of his house when he went outside to take the garbage out. The man was looking to buy a house just like my dad's. My dad was interested in selling. They talked and exchanged contact information. The guy ended up buying my dad's house for all cash at the exact price he had been thinking of listing it with an agent, so he ended up saving about $30K in commissions to the realtors!