What Does “For Sale By Owner” Or “FSBO” Mean In Real Estate?
A common way to sell a home in this competitive housing market is via “For Sale By Owner” (FSBO). This means that a real estate agent will not be involved in the sales process. The seller of the home has decided not to involve a real estate agent and will handle the transaction completely by him or herself. The owner of the home will be involved in every part of the process, from showing the house to handling the negotiations.
Why would someone want to sell their home as FSBO? Usually sellers decide to do this because of the potential to save money. The big savings comes from not having to pay a real estate agent a commission once the home sells. This commission cost can be anywhere from 5 percent to 7 percent — in some cases, even more. The average commission for a real estate agent is about $10,000.
What is the advantage to a buyer purchasing a FSBO home? Buyers should be informed, should know what a good deal is and when it is time to walk away. A large benefit of this type of sale is that you are working directly with the seller. There is not a middleman you need to go through when you have questions or are ready to make an offer. This could decrease the amount of time you spend on the telephone or email trying to get the answers to your questions.
If you are seriously considering purchasing a FSBO home, there are several things that you need to think about. You should hire a real estate lawyer to be ensure that everything goes smoothly and just as planned. This does not cost a large amount of money, but the peace of mind you will have when the sale is complete will be worth it.
As a seller, you should keep a fair selling price for your home. One of the biggest mistakes that FSBO sellers make is that they try to overprice their home.
And both buyers and sellers should do plenty of research to be sure they understand what the local market is like.
Related real estate articles on Down Payment:
- 10 reasons why for-sale-by-owners (FSBOs) fail
- FSBO and expired listing prospecting: 11 tips for real estate agents
- In hot real estate markets, FSBO option worth considering
- See our entire catalogue of For Sale By Owner articles on Inman