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FSBO is a commonly used acronym that stands for For Sale By Owner and most often refers to real estate for sale. As opposed to listing a home with a real estate agent, FSBO is a real estate offering handled by the seller which does not involve a real estate agent. Agents often refer to owner-sold homes as "fizbos". People may elect to list their house FSBO for a variety of reasons.
Possibly the number one reason homeowners choose FSBO is to save money in real estate fees. Though selling a home FSBO means additional work for the homeowner, with sales commissions averaging 7% of the sale price of the home, selling a home privately can save the owner thousands of dollars. Other benefits to listing a home FSBO include more flexibility and control in showing the house and contract negotiations.
When an individual decides to list his or her house FSBO, there are a number of factors to consider. Understanding fair market value for pricing the home is absolutely necessary for a homeowner to successfully sell a property. Many people are unable to set aside their personal feelings about their home in order to maintain a clear business perspective. In other words, just because you personally love your decorating touches and believe they have added value to your home doesn't mean the average homebuyer will agree.
Additionally, when you sell your house yourself you become the only point of contact for interested buyers. You must hold your own open houses, and showings by appointment, and negotiate the purchase contract on your own. Many people wisely choose to hire a real estate attorney to handle the details of the purchase agreement, but anyone with basic real estate knowledge can close the sale of a home on their own.
Before listing your home FSBO, thoroughly research real estate information in your area, including property values, title agencies, and typical contract terms. You should also be prepared to offer a finders fee to real estate agents that might bring you a qualified buyer to purchase your home. This fee should equal half of the going rate for real estate sales commission in your area.
Nice article. I have sold two homes by owner. If you can do the work yourself, it is certainly worth it.