Flipping a House, Should I do For Sale by Owner?

Buying & Selling Real Estate
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Flipping a House, Should I do For Sale by Owner?

Edward Shen
Philadelphia, PA · Member since 2017 · 32 posts · 4 votes

Hi everyone,

My name is Edward and hope everyone is doing well. Thank you for reading my forum discussion page. I am new to this whole real estate world and was asked by my Dad if I wanted to help him flipped a house. There are two challenges he asked if I was able to do. First, if I able to help him with interior design the house (in which I do not have any knowledge of beside watching a lot of house flipping shows) and Second to help him sell the house. He was suggesting that if you think you can sale this house after renovation, you can keep the realtor commission fee (In which is kinda what my motivation). Therefore my question is, What is the pros and cons for, For Sale by owner? I do not have a real estate license and is trying to sale my house as FSBO. What are the things that I need to know and is it actually worth it? Second question is that, is there any tips on interior design. Is there an app I can use to help me with simple blue print layout to creatively redesign a house, allowing the house to have sharp and clean look to attract the buyer.

Thanks again in advance for the help and suggestions!

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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
8y

Bottom Line:

If you can't put it on MLS you stand a very small chance of selling it FSBO

you need the exposure to thousands of agents who then expose it to all their clients.

so instead of you whistling in the wind.. your property once it hits MLS goes to maybe 50k people who are activity looking and working with their realtors.

don't fool your self into thinking but your house will sell.

It can happen but its a tough one in the retail owner occ space..

Multi family or investment properties are very often sold off market.. just depends on what you have.

@Steve Vaughan  you think WAZU  excise tax is bad just wait and see what it is in PA.. off the charts is what it is.. 2 to 4X what we pay in WA excise tax.

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  • Greg Hamer
    Real Estate Agent · Carmel, CA · Member since 2015 · 193 posts · 128 votes
    8y

    no.  

    lol.  i'm a Realtor. 

    There is a lot of paperwork involved. Also the marketing exposure. Access to MLS, etc.

    But, it is certainly doable.  It just depends on your level of involvement.

    Good luck either way.

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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    8y

    Not unless you've bought and sold a bunch solo already.

    FSBO is not a DIY project for the new. There are state and federal disclosures that need to be completed. What type of offer? Standard PSA or? What title co will you use? Does your state use title co's or closing attorneys? How much is the transfer tax? Who pays for that, title insurance, escrow fees? Will you recognize a legit POF or loan approval letter? Ever try to negotiate a 53 pg after inspection report? Will you recognize the throw away garbage the buyers agent will put in there? They are going to eat your lunch. Oh, I mean your father's lunch.

    I sell FSBO and buy solo, but only after doing it dozens of times with a pro. Do your relative a favor and find the best LA you can for them and learn the ropes.

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y

    Bottom Line:

    If you can't put it on MLS you stand a very small chance of selling it FSBO

    you need the exposure to thousands of agents who then expose it to all their clients.

    so instead of you whistling in the wind.. your property once it hits MLS goes to maybe 50k people who are activity looking and working with their realtors.

    don't fool your self into thinking but your house will sell.

    It can happen but its a tough one in the retail owner occ space..

    Multi family or investment properties are very often sold off market.. just depends on what you have.

    @Steve Vaughan  you think WAZU  excise tax is bad just wait and see what it is in PA.. off the charts is what it is.. 2 to 4X what we pay in WA excise tax.

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    8y

    Also dont underestiamte the fact that agents dont want to deal with FSBO's. They are a pain in the but. I dont deal with them.

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  • Mike McCarthy
    Investor · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    8y
    I’d have to agree with the others. 25% of selling a house is showing it and negotiating. The big part is pricing it right and marketing it correctly for your area. Also how to deal with inspection issues when they arise, funding issues, etc. You’ll still likely want to work with buyers agents, so you’ll still pay them 2-3%. So really all you’re saving is 2-3% of the sellers agents commission - which in my mind, a good agent will be well worth it. As for design - are you planning on moving walls and doing new layouts? Or are you selecting cabinets, tile, paint, flooring, etc? It’s all about visualizing the space after it’s completed and seeing it all flowing. Some people have that knack, others can learn it, and some know better and learn they just don’t have it. How do you fall?
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  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    8y
    Originally posted by @Jay Hinrichs:

    Bottom Line:

    If you can't put it on MLS you stand a very small chance of selling it FSBO

    you need the exposure to thousands of agents who then expose it to all their clients.

    so instead of you whistling in the wind.. your property once it hits MLS goes to maybe 50k people who are activity looking and working with their realtors.

    don't fool your self into thinking but your house will sell.

    It can happen but its a tough one in the retail owner occ space..

    Multi family or investment properties are very often sold off market.. just depends on what you have.

    @Steve Vaughan  you think WAZU  excise tax is bad just wait and see what it is in PA.. off the charts is what it is.. 2 to 4X what we pay in WA excise tax.

     I heard about Philly's excise tax from @Max Tanenbaum. 4%!  I thought 1.7% was bad...  That's why I brought it up.

    Newb: Should I sell FSBO? Us: Do you even know how transfers work in your market? That would answer it for me right there.

    1Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    8y
    Originally posted by @Steve Vaughan:
    Originally posted by @Jay Hinrichs:

    Bottom Line:

    If you can't put it on MLS you stand a very small chance of selling it FSBO

    you need the exposure to thousands of agents who then expose it to all their clients.

    so instead of you whistling in the wind.. your property once it hits MLS goes to maybe 50k people who are activity looking and working with their realtors.

    don't fool your self into thinking but your house will sell.

    It can happen but its a tough one in the retail owner occ space..

    Multi family or investment properties are very often sold off market.. just depends on what you have.

    @Steve Vaughan  you think WAZU  excise tax is bad just wait and see what it is in PA.. off the charts is what it is.. 2 to 4X what we pay in WA excise tax.

     I heard about Philly's excise tax from @Max Tanenbaum. 4%!  I thought 1.7% was bad...  That's why I asked about.

    Newb: Should I sell FSBO? Us: Do you even know how transfers work in your market? That would answer it for me right there.

     Steve its not only transfer tax  it school tax every time you change title and other sundry things I will have to pull a hud and e mail it to you.. its a shocker  really is...

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  • Jonathan Minerick
    Real Estate Broker · San Diego, CA · Member since 2015 · 725 posts · 129 votes
    8y

    Keep in mind that by selling FSBO, there are only so many buyers that are comfortable working directly with a seller. According to NAR, 88% of buyers have an agent, so the other 12% of buyers are your target.

    Also factor in that FSBO does not have the same marketing reach as an MLS listing - in that FSBO can post on Zillow and some other sites, but misses out on brokerage sites, realtor.com, etc.

    As an example, if the FSBO sites account for 40% of all real estate traffic, and your target market is 12% of buyers, you have effectively reduced your potential audience to ~5% of all buyers (100 * .4 * .12).

    A better way to proceed is to get a flat fee MLS listing, where you pay an upfront fee (e.g. $200) to an agent to place your home on the MLS. You can also offer a commission to the buyer agents via the MLS - this is smart because you may very well get a buyer who is willing to make an offer high enough that it covers the money paid to their agent. If that doesn't happen, just accept an offer from an unrepresented buyer - the most important thing is that by listing on the MLS you got the mass market exposure, so you know that you didn't leave money on the table

    You can also get a transaction coordinator who will help you take care of all the paperwork.

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