Have any of you tried for sale by owner?

Question

Either as a seller or buying an FSBO? How was your experience - what was the biggest pain point?

With purchase prices so high in San Francisco, i'm wondering why more people don't try the FSBO model.
I do see how it could be stressful and wondering if anyone succeeded. Love to hear tips and lessons learned. Thanks!

Jonathan Minerick · Answer

Listing on the MLS for a flat fee (e.g. $199) is much better exposure than doing a FSBO. Plus you can offer buyer agents a commission, which is really important as ~90% of buyers have an agent.

BP blog post on the difference between flat fee MLS and FSBO here

BP blog post on how to choose a flat fee MLS provider here

John Morgan · Answer

@Swetha Mandava

I’ve done it 5 times. It’s simple and any title company will walk you through the process and give you the contact to use. It’s sooo much easier and less hassle vs going with RE agents. And saves both parties a ton of $ and headaches.

Bill B. · Answer

I’ve only sold two properties ever. Both FSBO. A cabin in MN and a primary in Vegas. Both were super easy, barely an inconvenience. I’ve found selling based on my net was a great bargaining tactic.

I listed each about 2% under market ($5k on the cabin and $8-9k on the primary). But I listed them as “net to me”. Many buyers underestimate the total cost to close. They assume they’re getting much of the savings from not having a realtor. (The 2%). But an average seller pays 1-2% on top of realtors fees. So ended up netting almost 100% of the no realtor savings.

Now. MN and NV are both title states. So there is almost zero work selling with a large company like fidelity title in NV or Edina title in MN. I probably spent 2 hours total on each property sale. I don’t know how it works in an attorney state.

Drew Sygit · Answer

We often target FSBO sellers to get better deals as many have no clue how to negotiate.

Eliott Elias · Answer

It was good when the market was red hot, now you're going to need a sales person (realtor) to get the property in front of as many eyes as possible

Gurbeer Sangha · Answer

In all honesty, I don't think most realtors would take up flat fee for a listing, and if they did, they wouldn't put much effort in getting you the best price, since they get paid the same no matter what. So they will probably just be pushing you to the earliest bidder, regardless of what's best for you.

Swetha Mandava · Answer

Thanks for all your feedback! I'm curious what do you think about flat fee listings on MLS with a buyers agent fee of 2.5%? Seems like it might solve for marketing and buyers pool. Agreed there are still some important missing pieces without a realtor.@Bill Brandt - Did you list on MLS or just as an FSBO under zillow or something similar? what was the hardest part of doing FSBO?  How did you go about issues that others have brought up - showings/stagings/marketing/deciding on price?

Brad Jacobson · Answer

I'll give the Realtor pitch of why I think it's better to list with an agent rather than FSBO.

The big difference is publicity and the amount of potentially interested parties.

First, listing with agent puts your property front and center on the MLS.  That will drive far more traffic than anything a FSBO could obtain on classifieds, newspapers, social media, etc.  If you're working with a good agent, you'll get very good photos, a 3D tour or video walkthrough, and a very good public listing.

Second, selling FSBO removes the buyer agent commission along with the listing agent commission.  By not offering a buyer agent commission, you're likely losing all the potential buyers that are already working with an agent to help them secure a property and guide them through the process.  Most people aren't comfortable buying a property by themselves so selling FSBO removes a huge buyer pool.

Third, a good agent is going to nail the list price and will prove useful when negotiating.  I've seen a lot of FSBO go way too quickly because they were listed far too low (I bought my own house this way, still almost feel bad for how cheap I got it).  Or they list on market for way too long because they're listed way too high.

Yes, listing with professionals will cost you 4-6%!  However, when playing with assets worth hundreds of thousands, it's important to do it right.

Good luck!

Have any of you tried for sale by owner?

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