Should You Sell "For Sale By Owner"?

Is

FSBO

the method for you? If you've never done it before, it certainly can be challenging, but if you are willing to do the work necessary to market your house and work with potential buyers, there are some advantages.

By selling

FSBO

, you can save money on commission fees. Typically, a real estate agent or broker who lists and sells your home gets paid with a commission of between 5% to 7% of the selling price. For eg. if your house sells for $150,000, you would have to pay him or her between $7,500 and $10,500.

Other reasons why you could opt for FSBO:

* You're not in a big hurry to sell

* You have the time and motivation to learn more about the process, answer phone calls and show your house

* You have a good real estate attorney who can protect you through all the legal facets of selling your home

* You already have a potential buyer who's financially capable of buying your home

* You can detach yourself emotionally from your home

* The real estate market is favoring sellers at the time you put your house on the market

Reasons for not opting for FSBO and selecting a real estate agent:

* You're in a hurry to sell

* You're uncomfortable negotiating

* You have a hard time handling tension, complications and rejection

* You don't have the right information to price your home: Overpricing unnecessarily delays a sale, while underpricing forfeits any gains you may have made by avoiding an agent's commission

* You unknowingly stumble into legal mine fields because you don't have a real estate attorney on your side.

* Agents know the market and can help you determine the right price for your home

* Agents have a vested interest (commission) in selling your home for the highest amount possible

* They have far greater resources than you for locating buyers and steering them to your home, such as the Multiple Listing Service (MLS) and "comp books," which list recent sale prices of homes similar to yours in your neighborhood—the key determiner of your home's worth

* Agents aren't emotionally invested in your home, so they can keep cool, level heads during the negotiating process

Challenges With FSBO

You will need to be able to show your house almost at any time if you are serious about selling. You will need to pay for advertising so that potential buyers know your house is available, and do some research to know how to price your house. You will need to find and hire a good real estate attorney to tell you what things by law have to be disclosed to the buyer prior to a sale, look over any contracts, and ensure you do not inadvertently discriminate against potential buyers. You will have to negotiate directly with buyers, and with buyers' agents.

The Reversible Decision

If you're not sure whether you'd like to sell FSBO, give it a trial period. Before you list, give yourself a week, a month, two months (probably the most reasonable time period).

Set a deadline, and until that deadline expires do everything you possibly can to sell by owner. Then, if you still haven't sold the house, you can always list it and have an agent sell it for you.