For Sale By Owner (FSBO)

What is a FSBO Sale?

For sale by owner (FSBO) refers to selling a home without using a real estate broker or Realtor to list the property. A seller might choose to sell their home FSBO to avoid paying commission, which on average can cost an additional 5% of the sales price.

Is FSBO a Good Option?

It is becoming more common for owners to sell their home without a real estate broker. With new online tools and resources, several of the functions that were previously available only to Realtors are becoming available to every homeowner.

As with any big decision, you should weigh the pros and cons of trying to sell FSBO vs. using a real estate broker before you decide which option is best for you. While each deal is unique, here are some of the common pros and cons to consider:

Pros

    • No Listing Commission – In a typical listing agreement, you will pay 5-6% of the home sale price as a commission to the listing broker. For example, on a $500,000 sale at 5% commission, you will pay $25,0000 in commissions. If you successfully sell your house by owner for the same price, you will get $25,000 in additional proceeds. That’s a big savings! (It is important to note that even if you list your home by owner, your buyer may be represented by a broker who asks you to pay a selling commission. This is completely negotiable, however, and will always be far less than the listing commission.)
    • Control – Selling your home without the services of a broker gives you more autonomy and control over the process. This is attractive if you’re a seller who knows exactly how you want to market and present your home, what price to ask, and any other details or conditions of sale that you want to achieve. This level of responsibility can be a pro or a con depending on your personality and particular circumstances.

Cons

    • Limited Exposure – While there are an increasing number of online listing services, a real estate broker can still get your listing more exposure with a larger audience by listing on a local Multiple Listing Service (MLS). MLS is only available to licensed Realtors. The wider exposure could result in selling your home faster and/or for a higher sale price.
    • Amount of Work – A lot of work goes into selling a home. Preparing marketing materials, taking photos, setting the right asking price, listing and marketing the home, conducting showings, reviewing offers all take a considerable amount of time and energy. While the savings of going the FSBO route are considerable, so is the amount of effort a broker assumes for you.
    • Emotional Involvement – Many of the steps involved in selling a home, from setting the right price to conducting showings to negotiating a contract, can be more successfully performed by a real estate broker than a homeowner who is more emotionally involved.

What is Your Lawyer’s Role in a FSBO Sale?

The role of a real estate attorney in a FSBO sale is typically more significant than in a transaction where real estate brokers are involved.  Your attorney fills in some of the gaps and advises on items where the real estate broker typically plays a role. This may include completing the real estate contract, explaining the various terms, conditions and options in the standard purchase and sale agreement, or advising you on home inspection credit requests by the buyer.

Do Lawyers Charge More to Represent a FSBO Seller?

Some lawyers may charge an additional fee to represent you in a FSBO sale, since it typically places additional work on the lawyer.

At Adler & Herbach, we love the ‘do it yourself’ attitude and do not charge any additional fee to represent FSBO sellers. Our flat fee for a typical FSBO sale remains $750.00 and we still save you 50% on your title fees. See our seller page for more detail.

Summary

While selling by owner can save you money, it is not a good fit for every seller. If it is the right choice for you, your attorney will be a vital resource for you as soon as you receive an offer – and sometimes before. The earlier you involve the attorney, particularly in a FSBO transaction, the more likely you will be to succeed.

At Adler & Herbach, we support you from the moment you decide you want to sell your home. Contact us today to learn more about whether selling FSBO is right for you.