For Sale By Owner

I've sold two condos on my own. In one instance I got the highest price paid to that point for a condo in the complex. It had a water view from the porch, but nowhere near as nice as some of the other units. It was nerve-wracking, but it paid off. I just closed a sale for a second condo that we sold ourselves where my wife and I made about an 8% gain from our purchase price in 2005 (considering market conditions, we were ecstatic). We've sold through brokers before and to be honest, there are very good ones and very bad ones. The bad ones really are terrible.

I wouldn't advise selling on your own unless you have quite a few of the skills Rona mentioned though. It's not that easy, and you really have to have a strong feel for the local market as well as plenty of knowledge about the process. Still, if you are successful at selling a property yourself, you're saving potentially thousands and thousands of dollars in the process - but again, it's not easy and certainly not for everybody.

You also need to have thick skin. People will make all kinds of comments about your house, decorating taste, how much work something needs, how much they want a nicer kitchen, etc. Those are hard things to hear about your own house.

I have sold two houses on my own, with much better results than if I had used realtors. I have seen dreadfully-written P&S forms and offers from realtors, never mind illiterate and silly listing verbiage. Often, negotiating through realtors is like the children's party game "Telephone": whatever you say to one comes out garbled at the other end, often leading to fits of temper on the part of a buyer or seller. If you have half a brain and don't take it personally if prospective buyers don't like your house, then it makes sense to sell yourself. I fail to see that ANY realtor is worth a $30,000 commission for selling a house. There's absolutely no way that they do enough work to justify that amount of money.

We were very lucky with our FSBO in 2004. We lived in a desirable condo community in a desirable town and priced it fairly. We also agreed to pay the broker fee for any realtor bringing us a buyer, and in the end, that was how it sold. Even with the fee paid to the broker, we made a modest profit, which was more than we could have asked.
We didn't haggle over much (since the place was priced fairly) and the realtor said it was a pleasure to work with us, and I think she meant it (I hope!)
We did a lot of research and used a lot of common sense. We had only been in the condo for 2 years, so we weren't emotionally attached to the property, which I think is really important. If you are going to FSBO, that's probably the best advice: Let the buyer be emotionally attached, not you.

I've run into a number of FBSO sellers who underestimate what's needed to sell a house, pricing issues aside. An example: Some buyer-clients eagerly accepted an offer on their duplex, but didn't understand that it had an open-ended close date with the P&S done only after the buyer had signed a P&S on the sale of her house (which was way overpriced). They almost lost their dream house because of that. Many don't understand the inspection and mortgage contingencies, and most are unaware that they have to get a smoke/CO certificate to close (Title 5, too, if there's a septic system). And that pesky "time is of the essence" phrase....... In my experience, the process is much more difficult and prone to problems when there's an inexperienced seller.

Some FSBOs won't show a house to an agent (of course, if they don't offer buyer-agent compensation that probably won't be an issue anyway). Some - amazingly -
don't return phone calls, or allow their kids to take messages. One agreed to a showing then walked out of the shower while we were there at the specified time.

Some FSBOs do very well and save serious money, but many other learn the hard way that it's not as easy as it looks.

My spouse and I had a dismaying experience when we tried to buy a FSBO . We spent time (and money) on inspecting the house with a contractor, performing a market analysis to evaluate the asking price, and doing the paperwork that presented our offer after the seller told us that the price was agreeable to him. He then turned around, without even a courtesy call, and sold the house to his brother-in-law for considerably less money. It turns out that the seller needed to use us to get his brother-in-law to move on buying the house, as he was dragging his feet over the price.

This ended up being lucky for us in the long run, as we went on to get a better deal on a somewhat nicer home, in a far better location, by using a buyer's agent to represent us in working out a deal with a home seller's agent. Both agents ended up reducing their commission significantly to help us get the deal done after some decking failed inspection (requiring expensive repairs before title could transfer), and we were on a strict budget.

We have encountered other people who say that they have had bad experiences with FSBOs. However, I don't doubt that there are also FSBOs that are purchased quite successfully.

Hello,

I have been off the blog for a while because I've been a busy agent. Let's just say I'll work with FSBO over bank-owned any day but I digress!!

My experienced with FSBO has been mixed but nothing too horrible! The process is more detailed and dependent upon moving along in a timely manner than most people realize. Some sellers do not realize the value of hiring a *real estate* attorney. If you're not going to work with an agent, at least hire a real estate attorney. It just doesn't go very smoothly otherwise.

And I showed a FSBO condo to a few clients and got to know the seller a little bit better each time. One day the seller called me and asked me if I wanted to list the property! He got tired of the process. You have to be available to show your home and deal with phone calls. Most home owners do not want to pay for a lock box and put it on their property. You must also be knowledgeable about your own home. I worked with one FSBO who did not know much about the systems in her house because her ex-husband had always taken care of them. A good agent would get all of the important information together before the house is listed.

And one last thing: when you are selling your home as FSBO, buyers think they are going to get an awesome deal because you should be willing to take the money you are saving by not having an agent, off the price. That is what my buyers tell me.

If you are reasonably sophisticated, or have a "business" mind - ie it would never occur to you to be insulted by what someone said about your house, than FSBO is a good way to go. The actual mechanics in buying and selling a house are really not all that complicated.

Most people don't have the capability of doing so in my experience, though.

Buying from FSBOs is actually almost always a bad idea these days. Not only is the seller unlikely to be professional, but most people are deluded about the value of their house. A real estate agent doesn't want to waste their time trying to sell something 25% over market, so they tend to "educate" sellers. In a FSBO that's not present.

If I were to put it into a general theory, I'd say most FSBO sellers lag the market in valuation. That means a FSBO buy could be good in a booming real estate market, but is likely to be overpriced in a down market.

Do some market research and price the house fairly.........get a good real estate attorney to handle offers and P&S and your good to go. Save yourself the $$ by not getting a realtor..... If you have septic then that is a little more involved....

Has anyone had issues with a seller not disclosing a problem with the house or location? Do FSBO's have to go through all the state paperwork about lead paint,...?

Sell it yourself. You should have it neat looking, but dont go crazy, the whole "staging" thing is overrated. People know what they are looking for in a house and it is not decor - they'll bring their own. They care about the location, the neighborhood, the condition, the schools, the practical things.
Get a lawyer to look at the documents you are passing or recieving. They are not expensive for the service they provide.
You do need to be on top of keeping the profile high - keep signs up, ads on Craigslist or on bulletin boards, as well as the MLS. Do an open house all afternoon every Sunday until it sells. You'll get the hang of it. Realtors will say "that just makes it stale" but that is because they are lazy. It goes against advertising theory to do one open house and then no more for a month.
Sell it yourself - because if you can't sell itm no realtor will be able to help you.

Doreen,
A seller is obligated to inform a prospective buyer about lead paint law and the status of the house (usually "unknown") I wrote about lead paint. It applies to sellers with or without a broker.

A seller cannot hide something intentionally (like painting a spot to hide a leak that's still leaking.) They don't have to volunteer what is wrong with the house unless it is of "material concern." Let a lawyer explain it to you, because I am not qualified to explain it.
What is going on around the house is for you and your agent to find out. What's wrong with the house is up to you and your home inspector to discover.