Is it good idea to sale by owner?

19 Replies

I'm currently selling my family home (due to divorce) that's been on the market for at least 90 day's. We are looking to take the property off the market and maybe install some new flooring in living area and possibly take down some unsightly wall paper. We weren't too satisfied with the realtor and I was wondering if it is a stretch to list the property as FSBO at a considerably lower price? I've researched selling on my own but I was looking to see if I could get some feedback from people who may have had experience with this method.

If your house will be flipped or make a decent rental selling as a FSBO is far more beneficial than if you are trying to sell a turnkey home. Most owner occupants use a realtor, and most realtors don't show FSBOs. Investors are far more likely to look on their own.

I sell by owner, but whether you should or not depends on your experience level, disclosure knowledge and knowing comparables and how to price it.

I guess you found out what price not to ask? I took retail ask price, reduced out commissions and discounted for repairs and asked an a la carte price for my rental sales. For example, I took a house I knew would list in perfect condition for $249k and sold it FSBO for $226k. If the buyer wanted a realtor and/or closing costs, they could add it to the price.

This house had a dead  backyard, sprinkler system and fence gate issues, roof, water heater and some smalls I didn't want to deal with.  I was willing to exchange equity for not working on my 36th freaking rental. That's why I'm selling the stupid thing.  I found a first time buyer with a realtor that wanted $4k in closing costs, so they paid $10k over 'asking' at $236. I was woohoo glad they had a good buyers agent. Wouldn't have happened without her. 1st time buyers are too skittish.

I did the same with a 2nd FSBO. This one had no agent and i wish they did. Lots of handholding and tracking them down for signatures, coordinating with lender and title, etc. I may write a blog post about how to survive the results of a 52 pg inspection report with a first-time, unrepresented buyer on a house that needs a roof next year, a water heater and has lead paint on backside of the facia. I ended up leaving $1800 In an envelope in a kitchen drawer. LOL

These were just long time rentals I didnt need max price for and I only put them on CL and Zillow.  At the ready, prepared by me were a proper PSA and my required seller disclosures (property condition and lead paint) just like a listed seller would have.   

If my 'family home' that I am making retail condition, I may try it solo for a couple weeks, then list with a quality realtor. Lower the price and try it before removing wallpaper and doing a bunch of work. My buyers liked my no haggle a la carte pricing method. Good luck!

All great advice! Thank you. I'm mainly concerned with getting a decent return to utilize for future investment. I also thought about lowering price and trying solo for a couple of weeks before using another realtor. I've had several offers and deals that fell through so I know I can get full asking price, especially if I remove the GREEN carpet.  I just don't have the experience at selling on my own but believe it may be possible. 

Originally posted by @Brandon Herron :

All great advice! Thank you. I'm mainly concerned with getting a decent return to utilize for future investment. I also thought about lowering price and trying solo for a couple of weeks before using another realtor. I've had several offers and deals that fell through so I know I can get full asking price, especially if I remove the GREEN carpet.  I just don't have the experience at selling on my own but believe it may be possible. 

 Offers, deals, and buyers procured during your listing will result in your having to pay commissions to your LA anyway.

I always try FSBO first, then exclude from a future listing any buyers I procurred.

Maximizing sale price was not my goal when I went FSBO. I mostly wanted to give the 1st time buyers the savings and prove all the high brow jerk agents that told me I could never sell on my own wrong.

Another bonus I gues to selling on my own was investor networking.  2 'buyers' I showed the houses to later told me they are just curious wanna be investors. One submitted her resume to me and asked if she could help.  Also met a cool realtor investor looking to buy on his own.  You don't get that behind an agent generally.

Originally posted by @Brandon Herron :

I'm currently selling my family home (due to divorce) that's been on the market for at least 90 day's. We are looking to take the property off the market and maybe install some new flooring in living area and possibly take down some unsightly wall paper. We weren't too satisfied with the realtor and I was wondering if it is a stretch to list the property as FSBO at a considerably lower price? I've researched selling on my own but I was looking to see if I could get some feedback from people who may have had experience with this method.

You need the MLS to generate buyer traction. You need a Realtor to get access to the MLS. If you are just selling on zillow or trulia you are missing the majority of the buyer's in your market.

Originally posted by @Steve Vaughan :
Originally posted by @Brandon Herron:

All great advice! Thank you. I'm mainly concerned with getting a decent return to utilize for future investment. I also thought about lowering price and trying solo for a couple of weeks before using another realtor. I've had several offers and deals that fell through so I know I can get full asking price, especially if I remove the GREEN carpet.  I just don't have the experience at selling on my own but believe it may be possible. 

 Offers, deals, and buyers procured during your listing will result in your having to pay commissions to your LA anyway.

I always try FSBO first, then exclude from a future listing any buyers I procurred.

Maximizing sale price was not my goal when I went FSBO. I mostly wanted to give the 1st time buyers the savings and prove all the high brow jerk agents that told me I could never sell on my own wrong.

Another bonus I gues to selling on my own was investor networking.  2 'buyers' I showed the houses to later told me they are just curious wanna be investors. One submitted her resume to me and asked if she could help.  Also met a cool realtor investor looking to buy on his own.  You don't get that behind an agent generally.

It may be too much trouble to suss out individuals who have walked through the home if I went the FSBO route, so that may be my main deterrent. Appreciate the comments, I'm just exploring different ideas as this may be the best opportunity for me to put some money in my pocket to start my real estate investing journey.

Originally posted by @James Wise :
Originally posted by @Brandon Herron:

I'm currently selling my family home (due to divorce) that's been on the market for at least 90 day's. We are looking to take the property off the market and maybe install some new flooring in living area and possibly take down some unsightly wall paper. We weren't too satisfied with the realtor and I was wondering if it is a stretch to list the property as FSBO at a considerably lower price? I've researched selling on my own but I was looking to see if I could get some feedback from people who may have had experience with this method.

You need the MLS to generate buyer traction. You need a Realtor to get access to the MLS. If you are just selling on zillow or trulia you are missing the majority of the buyer's in your market.

Your right. Just exploring my options..looking for a creative means to get this house sold and move on with my life and make a little bit of cash. 

Realtors and Brokers will always say it is better to have a realtor for this or that reason. There is no doubt they provide value, it just depends how much and that is based off each individual situation. The bottom line is there is a TON of data available to the general public in a few clicks online that can help you with any and all of the metrics used to create a list price. And being you've had it listed, you already have a fair idea. Back in the day, you used to HAVE to have a realtor for this data. If you fear that not being on the MLS will cost you, pay for a flat fee listing, then it will get listed on the MLS. Keep in mind, many realtors/agents will NOT show their clients listings that aren't listed by another realtor. You can market a buyer's agent commission if you want, to try and prevent that. I think there are a lot of markets in the US with more buyers than listings, so FSBO should be very doable.

Brandon,

Good question,

The major benefit of FSBO would be that you can cut out the brokerage fees. Thats pretty much it. Unless you can price the house accurately to the market and can get buyers into the door of your house and deal with all the contract work on your own without a lawyer or agent I think its a good route to go. But if you are not sure about the price or your ability to properly sell and take care of the contract work then you might be better off with an agent.

Probably the biggest reason you aren't getting buyers is because agents don't want to show homes that are FSBO. Simply because the FSBO is such a hassle to deal with. You have to have a permission slip signed and the moment that comes out owners freak out and think they are signing a listing contract.

The other reason could be marketing the property. Zillow and trulia are probably going to be your best bet to get a stream of people coming in. Most buyers tend to go on zillow first before being picked up by a realtor and at that point you aren't going to be able to get them to come in. A well connected agent in your area might already have the buyers for your home but since its not on the MLS he isn't going to bother showing it.

If you are offering something unconventional like seller financing or rent to own then it makes sense to post it on facebook groups and craigslist as these crowds generally like going after such deals.

Good Luck,

If you need a recommendation for a realtor or anything else give me a pm

I sold my home in California and used Homebay.com instead of a realtor. They list your home on the MLS and Zillow, Trulia, etc. They also hire a professional photographer to come and take pictures of your home. The pictures came out great too. You do have to write your own "description" and come up with a selling price on your own but they will give you advice. Also, with all the technology today, finding comps is simple. The best part about Homebay is they only charged me 2k instead of the standard 3% commission. My home sold within 2 weeks for full value. PM me if you have any questions!
@Muhammad Ali Would have to agree with all that you have said. Luckily, there are flat-fee services for realtors online to get your FSBO listing on Realtor.com and Zillow. Our total out of pocket for this realtor was around $500. We recently sold our SFH this route and the agent posted the listing for us while we took care of showings. The realtor also took care of quite a bit of the contract paperwork. It was an "easy" process due to being in the hot market of Denver outskirts so I'm not sure how this would work elsewhere.
Originally posted by @Muhammad Ali :

Brandon,

Good question,

The major benefit of FSBO would be that you can cut out the brokerage fees. Thats pretty much it. Unless you can price the house accurately to the market and can get buyers into the door of your house and deal with all the contract work on your own without a lawyer or agent I think its a good route to go. But if you are not sure about the price or your ability to properly sell and take care of the contract work then you might be better off with an agent.

Probably the biggest reason you aren't getting buyers is because agents don't want to show homes that are FSBO. Simply because the FSBO is such a hassle to deal with. You have to have a permission slip signed and the moment that comes out owners freak out and think they are signing a listing contract.

The other reason could be marketing the property. Zillow and trulia are probably going to be your best bet to get a stream of people coming in. Most buyers tend to go on zillow first before being picked up by a realtor and at that point you aren't going to be able to get them to come in. A well connected agent in your area might already have the buyers for your home but since its not on the MLS he isn't going to bother showing it.

If you are offering something unconventional like seller financing or rent to own then it makes sense to post it on facebook groups and craigslist as these crowds generally like going after such deals.

Good Luck,

If you need a recommendation for a realtor or anything else give me a pm

I currently have an agent. I've gotten several buyers. A couple deals fell through. As time have progressed the listing sits longer and longer so offers have waned. Due to my experience with the current realtor..i am now considering FSBO. One offer I received on the home was because I was at home to show the home and they later submitted an offer. When the deal was in the realtor hands that's when it got a little hairy. Thanks for the great advice.

@Brandon Herron how many offers did you receive on this house? Once someone is interested enough to be making offers, your agent should be working on getting the deal closed. What did he do, or why did the offers not end up in a purchase? Knowing these might help us know if the agent could be the issue, or there could be other issues (inspection issues, price negotiations, etc).

I've FSBO with a flat fee listing service for most of my flips, and sold without a hiccup, usually in a couple days. I have a realtor now and he got my place sold before it was listed, for more than I expected, and has the perfect realtor personality (not afraid to make calls, answer the phone, push the bank, push on the buyer, push on the seller, whatever needs to be done, he does). I can see both sides and can say both sides can be good resources.

@Brian Pulaski I've received at least 4 offers. 1st offer was full asking price @220,000 2nd offer was cash offer 10,000 less than asking..i chose to negotiate to 5,000 less versus 10,000 and they accepted. We took the cash offer. After inspection they came back to 210,000 so I tried to negotiate to 213,000 and they immediately rejected and fell out of the deal for unexplained reason other than having to leave country. 

That's when we later found out that we had at least 10 reviews of the home from prospective buyers that we had to force the realtor to hand over.

Another offer we accepted @ 207,000 just to be done but lady pulled out 30 mins before the option period was over because she found another home over the weekend. 

So after analyzing the reviews I realized that the realtor priced too high initially seeing as we still had ugly green carpet and wall paper which didn't deem the house move in ready. 

There are many properties to chose from in the arlington, Texas area. A bit of an over saturation in my opinion. So the high price point did not work just because it's a "sellers market". 

It really comes down to the time/hassle and the risk. While on the surface, you can save some money. Will you pay the agent who brings a buyer? How effective is your marketing? I often find FSBO are over or under priced for their market. Do you really want people calling you to see the house? Someone will have to meet the buyers, during the day, evening and weekends. It is difficult to qualify out the tire kickers. You can always put a manual lock box, but them once they have the code, you won't know who was in the house. You will be hard pressed to get a FSBO buyer to provide a pre-qual. As a practice agents, should be vetting the customers for their level of purchase.

If something goes wrong with the transaction, what will you do?  Do you know the laws and your rights?  There are a lot of shady characters out there.

Unless you have the time and experience doing this I would think long and hard before undertaking this. 

One additional though, I don't know the Arlington market, but if is overheated and properties are flying off the shelves at over asking, you may be in good place to take this on.   

@Brandon Herron . I can guarantee if you put out as a FSBO, you'll get calls from lots of different RE Agents!

The response should be "if you have a Buyer for the property, I'm willing to pay the Buyer's Agent Commission!"

The equation to get a home sold is "Looking Good and Priced Right!"  

So, if it's not Looking Good - it better be Priced Right!

You need to decide what part of the equation you were not following. 

If the information you received indicate the flooring and wall paper is an issue, it might be worth removing it from the market, replacing the flooring, removing the wallpaper and painting and then relisting it at or below what it was listed at before. Those two changes will completely change the look of the house.

I say that from my living room with green carpet!!

Take a look at doing a "flat fee MLS listing". The hardest part about FSBO is exposure. Zillow is great, but realtor.com, redfin, broker sites, and most importantly, incentivizing the buyer agents via a commission offer on the MLS, are all going to drive a lot more traffic than Zillow alone. 90% of buyers have an agent. You don't want to miss out on those buyers - many agents don't show homes not offering a commission on the MLS.

@Chandler Canepa Similar to what Chandler is saying, you can listed on the MLS with a "flat fee MLS listing" for ~$100-$200 in many areas. Also look at getting a transaction coordinator, who will be able to make sure you get all your paperwork done correctly for ~$400. There are a lot of ways to save money in a sale without losing much in terms of quality and support.