For Sale By Owner (FSBO) - Step-by-Step Guidance Needed

16 Replies

Hi-- Well, after a seven-month slog through my first duplex renovation, I'll be putting it up for sale (in the Tampa, FL area). It's turned out beautiful. Fortunately, the market is strong here for duplexes and so, given the many "firsts" I've experienced in this project, I thought I'd try another "first" and do a FSBO.

I have a number of Q's and could also use some step-by-step assistance if you'd be so kind as to share your knowledge and experience. (please excuse the stank of newbie-ness in the following Q's!).

1) What is the step-by-step process for successfully completing a FSBO?

2) In the FL area, do you have any recommendations for MLS-listing services? What's the average price to list? They all seem to offer about the same services but the rates vary.

3) I plan to market, show, and handle offers. Once I receive an acceptable offer, what then? I imagine I'll complete a sales contract (I'll be using a standard form the FL real estate association produces) and get signatures.

4) Once I have  the signed contract, then what? I've contacted one real estate attorney. He wants a $1K retainer and charges $270 per hour. What is his role? Do I have him review the contract (although it's a standard form)? Does he handle the signing of the sales contract? What's a reasonable cost for the entire transaction?

5) Would finding a real estate agent who would agree to be a "transactional agent" be of any value? What's a typical percentage / fee for that service? What do they actually do as a transactional agent that I couldn't do?

6) I have a title company I used when I purchased my primary residence and they were very good, so I plan to use them. At what stage do I contact them and involve them in the process.

7) What don't I know enough even to ask or expect? Potential pitfalls? What to avoid? What to make sure I do?

Many THANK YOU's in advance!

Mark...

hey @Mark J. - I can help you with all of your questions, easier to chat on the phone. Do you want to PM me your number and I can give you a call this afternoon?

For others interested in this topic, I found this excellent 42-page FSBO workbook put out by ForSaleByOwner.com: FSBO Workbook

@Mark J. The realities of selling FSBO are far different than the 'idea' of selling FSBO.

I have sold two houses myself, both of which were 'odd ducks' that only attracted certain buyers and would have taken longer to sell no matter what. Both took more than a year to sell, and both were in less desirable parts of the Midwest. 

There is certainly no problem planting an FSBO sign in the front yard and listing it on Craigslist. Be prepared to field a LOT of calls from agents looking to list it for you. A Google Voice phone number would be a great idea. You can have it forward to your cell phone, and either have it display the phone number calling you, or the Google Voice number itself, so you can automatically know that it is someone calling about the house.

Nothing is absolute in real estate and no two deals are alike. However, in general, it will take you much longer to sell by yourself than with an agent. FSBO houses typically sell for less than if an agent helped you. I'm sure you will hear all sorts of stories about how people listed it themselves and it sold instantly for significantly over asking price. That does happen. People also win the lottery. It just never seems to happen to you.

I saw a great phrase, I think from @Brandon Ingegneri , in the forums recently. He said "you'll be jumping over dollars to save pennies." Unless your house is a highly sought-after property, in a highly sought-after neighborhood, it will most likely not sell until you list it with an agent. 

There are flat-fee MLS services out there. All the agents in your area know what they are. I'm a licensed agent, and the general feeling I get from other agents in my association is that these listing services typically do not offer a standard commission to the buyer's agent, so they aren't excited to show those houses. It's actually a HUGE source of debate, and the flat fee services don't come out on the winning end of that conversation. I'm not saying it's right, I'm just saying how it is.

The best way to get your house shown, outside of having an awesome property, is to offer a commission that is typical of the area, or even slightly more. Perhaps an agent bonus for a sale in XX days.

@Mark J.

Mark, While I am a real estate agent, I completely understand the idea of wanting to save money from a listing standpoint. Paying a broker their commission seems like lost money. However, If this is a rehab and you are looking to get maximum return for your investment, you will never realize the gains without listing it through the MLS. More importantly, if it is marketed with iphone photos and unprofessionally you will be disappointed with the result. If you decide to do it yourself, make sure you actually hire a professional photographer who shoots listings for agents. Marketing matters and in our market, it can yield an extra 10-15,000 per listing. Oftentimes, our marketing resources and knowledge of the process make us a more valuable asset to sellers, than you might think. I wish you the best of luck in your endeavors'. Cheers!

Stuart

Stuart Birdsong, Twin Pines Investment Group LLC | 9706726282

@Mark J. I think if you have this many questions about how to sell a home, you should hire an expert to do it for you. You'll net more money, have less headaches , and you will learn what goes on in the process along the way. Once you have sold a few homes and more comfortable with the process, you might find yourself wanting to do FSBO again later on, and maybe you will have learned enough to make this a good idea. For now, you need the help.

Medium buysellinvest.2Dawn Brenengen, Trailwood Realty, LLC | 919‑840‑8692 | http://www.trailwoodrealty.com | Podcast Guest on Show #101

Originally posted by @Mark J. :

Hi-- Well, after a seven-month slog through my first duplex renovation, I'll be putting it up for sale (in the Tampa, FL area). It's turned out beautiful. Fortunately, the market is strong here for duplexes and so, given the many "firsts" I've experienced in this project, I thought I'd try another "first" and do a FSBO.

I have a number of Q's and could also use some step-by-step assistance if you'd be so kind as to share your knowledge and experience. (please excuse the stank of newbie-ness in the following Q's!).

1) What is the step-by-step process for successfully completing a FSBO?

2) In the FL area, do you have any recommendations for MLS-listing services? What's the average price to list? They all seem to offer about the same services but the rates vary.

3) I plan to market, show, and handle offers. Once I receive an acceptable offer, what then? I imagine I'll complete a sales contract (I'll be using a standard form the FL real estate association produces) and get signatures.

4) Once I have  the signed contract, then what? I've contacted one real estate attorney. He wants a $1K retainer and charges $270 per hour. What is his role? Do I have him review the contract (although it's a standard form)? Does he handle the signing of the sales contract? What's a reasonable cost for the entire transaction?

5) Would finding a real estate agent who would agree to be a "transactional agent" be of any value? What's a typical percentage / fee for that service? What do they actually do as a transactional agent that I couldn't do?

6) I have a title company I used when I purchased my primary residence and they were very good, so I plan to use them. At what stage do I contact them and involve them in the process.

7) What don't I know enough even to ask or expect? Potential pitfalls? What to avoid? What to make sure I do?

Many THANK YOU's in advance!

Mark...

 Mark,

It doesn't appear you got any answers to your questions. What came of your case, did you finally get any guidance? I'm on the opposite end being a buyer and I am seeing a lot of FSBO.

Thanks

I did successfully sell via FSBO. The key takeaway for me was that the title company does 90% of the work. I negotiated directly with the buyer, signed the sales contract, faxed it over to the title company and they took it to the finish line. Easy.

I also had an excellent marketing plan put together. 

I saved thousands in the sale and actually wound-up selling the duplex for another Bigger Pockets investor in my area.

It was a good experience and I'll definitely be selling future properties FSBO.

Originally posted by @Mark J. :

I did successfully sell via FSBO. The key takeaway for me was that the title company does 90% of the work. I negotiated directly with the buyer, signed the sales contract, faxed it over to the title company and they took it to the finish line. Easy.

I also had an excellent marketing plan put together. 

I saved thousands in the sale and actually wound-up selling the duplex for another Bigger Pockets investor in my area.

It was a good experience and I'll definitely be selling future properties FSBO.

 That's great! You are a professional now. :)

I was thinking of using an attorney to draw up the papers and make sure the contract had the proper contingency wording (ie. financial aspects and inspection) but it doesn't appear you needed to do that. I am on the buying end though so the experience will be different. I'm trying to figure out how to do this as a buyer (I buy and hold).

I was under the impression that as the buyer I could choose my own title company but that may be different in other areas. I live in Gainesville and here the seller chooses the title company. In Tallahassee the buyer chooses the title company. In previous transactions it was arms length so my agent took care of the contract and making sure it had everything it needed to protect me and I asked questions and signed. After it was accepted I got my inspection and financing and the sellers choose the title company for the closing.

FSBO though seems to cut out some parts and that's where I draw a fuzzy view.

Congrats! The title company does do a lot. What did they charge you?  

Title company fees were $335. (Title Search = $85 + Closing Fee = $250)

@Daria B-- I've established a good relationship with the title company and the buyer was fine with using them. It's a well-known local title company that works primarily with investors.

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Selling your house is pretty rewarding when it's all done. But oh boy can it be stressful. I used NoMoreAgent to help me get it listed everywhere possible. eventually it sold on zillow. I tried for a while on my own but soon as i used them the house got sold pretty quick i'd consider using them if you need some help. 

Hi Mark... Thanks for posting this article! Also in Tampa Bay Area, and went FSBO route. Initially, I spoke to several realtors, all of whom suggested I lower the price for my home (so they could put in minimal effort, and walk away with $12K+ of MY money)!

If I were a realtor, I'd do everything to adapt to industry changes, yet was surprised to find few realtors creative in their approach & offer to represent me. I began looking at flat fee services, most of which include different package prices for levels of support through the process. In the end, didn't even need to go the flat fee direction, rather decided to list on Zillow for free. The first appointment to see my home made an offer (for well over & above the price realtors suggested I list at, and only slightly below my list price). Of course getting a home on MLS -through flat fee service - would have meant tons more exposure, calls, and appointments, but I work from home, and didn't really want tons of calls & appointments (flat fee to MLS would have been my next step if necessary).

For the informed, gone are the days of the need for a realtor, at least under the antiquated commission structure that's made them wealthy for years. I've bought & sold 4 homes up to now, all with a realtor, and never truly felt my interests were being represented. I'll never get all that money back, but at least now I know I'll never pay a realtor again (other than buyer's agent).

The realtor trolls scare people into thinking it's all so complicated, and you're vulnerable in a fsbo situation. It's not, and I wasn't. Everything I needed to know - forms, advice, etc. - I found on the web. So, to those realtors I say, evolve with your industry or get left behind!

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