Mastering FSBO: Top 5 Benefits of Selling Your Home Yourself
Introduction
Here are the 5 main reasons why you may want to consider selling your home on your own.
- You Save a Hefty Commission
- Misleading Real Estate Statistics: Agent vs FSBO Results
- You Control the Entire Process
- No One is a Better Advocate for Your Property than You Are
- The Resources Now Exist to Guide You Through the Entire Process
In the world of residential real estate, selling your home independently as a “For Sale by Owner” (FSBO) can seem like a daunting task However, with the right tools, knowledge, and mindset, it is not only achievable but also potentially significantly more profitable and empowering.
I am a Licensed Associate Real Estate Broker in the State of New York.
Since 2004, being a real estate broker is my profession and primary source
of income. I have successfully completed hundreds of transactions with
sellers, buyers, landlords, tenants, and investors totaling over $400,000,000
in sales so far.
My real estate business is strong, and with nearly 90% of sellers opting to use a real estate agent, I am not losing any
business by sharing my successful home selling blueprint, strategies, tips, and even advanced negotiation techniques with you.
Key Takeaways:
This article outlines the top five reasons why homeowners should consider selling their property as For Sale By Owner (FSBO). It provides insights into the benefits of this approach, emphasizing financial savings, control over the selling process, and the empowerment that comes with handling the sale independently. Here are brief and direct answers to specific queries related to selling your home on your own:
- Financial Savings: The most significant advantage of FSBO is the potential to save on hefty real estate commissions, which can amount to tens of thousands of dollars.
- Complete Control Over the Selling Process: FSBO sellers have the autonomy to manage every aspect of the sale, from setting the price to scheduling showings, ensuring decisions align with their preferences and schedule.
- Direct Advocacy for Your Property: As the homeowner, you are the best advocate for your property, able to highlight its unique features and address buyer inquiries directly.
- Access to Resources and Guidance: Modern resources like Project FSBO provide comprehensive tools and information, making the FSBO process more accessible and less daunting than ever before.
- Empowerment and Satisfaction: Selling your home independently can be a rewarding experience, offering a sense of accomplishment and the potential for a more profitable sale.
Let’s get started!
How Popular is Selling Your Own Home Without a Realtor? “For Sale By Owner” (FSBO)?
According to the 2019 National Association of REALTORS® Profile of Home Buyers and Sellers, approximately 92% of residential sales transactions in the United States are completed with a licensed real estate agent representing the seller in the process. For that service, the typical fee paid to the real estate agent for their service ranges between 5% and 6% of the total sales price.
For a $500,000 sale, the commission due to the real estate broker will be $25,000 to $30,000.
The real estate industry is huge, and there are many persuasive arguments in favor of using a real estate agent to sell your home. I am one of those agents. I am a full-time licensed associate real estate broker in the state of New York. This is how I make my living. But I recognize that for many people their situation and local market make selling their own home a viable option.
I am not “betraying” my profession. There is more than enough business for me, and more than enough potential home sellers who don’t feel comfortable going it alone. I genuinely want to help as many people as possible, and with over 15 years of real-world experience I have invaluable insight on the process that the general public would otherwise not have access to.
The Case AGAINST FSBO
Why shouldn’t you do FSBO? Since so many people use real estate agents, there must be some compelling reasons to do so – and there are! You can check out this article; “The Top 20 Reasons to use a Real Estate Agent When Selling Your Home” to review all the arguments in FAVOR of hiring a real estate agent to represent you in the sale of your home.
Project FSBO provides a behind the scenes look at the entire residential home sales process from start to finish. The resources, tools, and products available are all designed to empower you to successfully sell your own home for a maximum return.
Why You SHOULD FSBO – Advantages of Selling Your Home Yourself
What are the benefits of selling a home “for sale by owner”?
Embarking on a “For Sale By Owner” (FSBO) journey stands out as a path of financial and procedural empowerment in the real estate world. This approach eliminates the substantial commissions linked with real estate agents, enhancing your financial gain from the sale.
Beyond the monetary aspect, FSBO grants you unmatched control over the entire selling process. You personally guide potential buyers, highlighting the unique aspects of your home and directly addressing inquiries and concerns. This direct involvement fosters transparency, resonates authentically with buyers, and aligns the process with your personal schedule and approach, ensuring a tailored and comfortable experience throughout the sale.
You Save Money on Commission When You Sell Your Own Home
This is the most obvious reason. You save money when selling your own home. A lot of money. Potentially enough money to buy a car, start a college fund, take a first-class vacation, or remodel your new home.
Case Study: What are the benefits of selling your home by owner? (FSBO)
Example: In the sale of a $500,000 home, the commission is typically between $25,000 and $30,000. (5% to 6% of the gross sale price). Even if you as a FSBO seller decide to offer a “Buyer’s Broker” commission of between 2.5% and 3% (One half of the full commission), you would still be paying between $12,500 and $15,000 in commission.
For most people those numbers are staggering. They may even make the difference between walking away from the sale of your home with a net profit or a net loss on the sale.
Why do Realtors hate FSBO?
Realtors often have a strong aversion to For Sale By Owner (FSBO) transactions due to the disruption it causes in the traditional real estate market. The FSBO approach allows homeowners to bypass utilizing a real estate agent, thereby avoiding the need to pay a commission fee, which is a significant portion of a realtor’s income.
This DIY home-selling method can also diminish the perceived value of a realtor’s expertise and network, which are primary selling points for their services. Consequently, the growing popularity of FSBO poses a potential threat to the traditional real estate agency business model, fostering discontent within the realtor community.
Arguments real estate agents use to scare potential FSBO sellers
Real estate agents have many well-rehearsed arguments and objections to dissuade you from trying to sell your home on your own, but they mainly boil down to the following two specious arguments:
-
- “By using me, you will actually sell for a much higher price, and so even though you will be paying me a commission, you will net more money from the sale.”
-
- “Selling real estate is a complicated and scary world. You need my expertise to guide you.”
Argument 1: By using a real estate agent you will net more money even while paying me a commission
For this argument, there’s no way to actually know for sure if a higher price was possible, since you can’t sell your home “twice” at the same time – once with an agent, and once on your own.
Secondly, this argument also gains credibility because many FSBO sellers don’t really know what they’re doing, and thus are more likely to leave money on the table.
Finally, this also comes from a time when access to marketing was severely limited for the FSBO seller and resources like Project FSBO didn’t exist to educate and guide FSBO sellers in the process.
Argument 2: Selling real estate is complicated and scary – You need me
No, you don’t.
Project FSBO provides everything you need to succeed. In fact, we go way above and beyond what most agents do. We walk you through all the steps and offer insider tips and tricks not only on the sales, marketing and negotiation process, but on how to best present and show your home to attain the maximum sales price possible.
Misleading Real Estate Agent vs FSBO Success Statistics
This is perhaps the most compelling reason of all. It’s not number one on the list, because it’s much more subtle than “You don’t have to pay commission!”
Do you make more money with a real estate agent than with FSBO?
Here’s the ubiquitous real estate agent proposition:
“Yes, you pay a 6% commission, but when you look at the sale, it’s a very small number, and if we get you MORE money, that could very well cover the entire commission!”
Here’s the problem with that analysis. (If you can’t stand math, just jump to the conclusion of this section where we discuss your net profit – i.e. the money you get to keep)
FSBO vs real estate agent: What do I save?
Let’s say that you’re selling our $500,000 example home. Let’s further assume that you pay 3% of the sales price in closing costs. (Note: Closing costs vary considerably depending on your location, so this is just a ballpark figure). This makes our closing costs $15,000.
Let’s also assume that you have an outstanding mortgage on your home for 80% of the value. (Note: Again, this varies considerably from case to case, and you will have to consider your case individually). At 80% you owe the bank $400,000 at closing.
Let’s combine everything and do the math for the closing of our $500,000 home both with, and without, a real estate broker’s commission. The number we’re interested in is the NET PROFIT. This is the amount of money that goes in your pocket after the sale.
INFLOWS
Sales Price: $500,000
OUTFLOWS
Mortgage: $400,000
Closing Costs: $15,000
GROSS PROFIT $85,000 ($500,000 – $400,000 – $15,000)
Case 1: For Sale by Owner – No Real Estate Agent Involved
If you’ve used a real estate agent now is the time to pay them their 6% of $500,000, or $30,000
YOUR NET PROFIT $55,000 ($85,000 – $30,000)
Case 2: For Sale by Owner – No Real Estate Agent Involved
If you sold it yourself, (FSBO), you don’t pay that commission, and your net profit :
YOUR NET PROFIT $85,000
Results
CONCLUSION: Although the commission is calculated from the sales price of the property, THE MONEY PAID TO THE REAL ESTATE AGENT COMES DIRECTLY OUT OF YOUR POCKET. In this example there’s $85,000 in play that could all be yours, but in reality, that $30,000 “6% fee” turns out to be “A 35.3% FEE!”. ($30,000 / $85,000)
Reread this as many times as necessary to fully understand this – it’s vitally important and the single biggest factor in how much money you get to keep in the sale of your home.
You Control the Entire Process
This is often portrayed as a powerful reason NOT to list your home on your own. Fear of loss is perhaps the most powerful emotion that guides our decisions. The not-so-subtle message is that if you don’t abdicate all your decision making to the real estate agent, you will fail and potentially lose tens of thousands of dollars.
Being in control of a process you don’t really understand IS scary, and the promise put forth by the real estate agent is that you need not worry, the professionals will let you sit back while they take care of everything.
This logic has its’ merits. But, if you understand the entire process, being in control of everything can be a huge advantage to you. You aren’t blindly following a “professional” who may, or may not, have the experience, skills, and temperament to work well with you. Armed with the knowledge, skills and tools that Project FSBO offers, you are able to confidently manage the entire process.
Home Preparation
Embrace the freedom to prepare your home for sale in a way that highlights its unique features and your personal touch. As the person who knows it best, you can accentuate its strengths and address any weaknesses, offering a genuine and attractive presentation to prospective buyers. This personalized preparation can create an emotional connection with visitors, potentially leading to faster and more profitable sales. Project FSBO guides you every step of the way.
Pricing
Control your financial future by taking charge of pricing your property. You have the power to analyze comparable homes in your area and set a price that reflects your home’s true market value. This informed decision-making can save you from underpricing your property or languishing on the market due to overpricing, ensuring a fair and profitable transaction on your terms.
You won’t have to live in fear that your real estate agent is pricing the home for their benefit, and not yours. Again, Project FSBO guides you though the entire process.
Marketing
Utilize a range of platforms, from online listings to social media, to broadcast your property to a wide audience. Tailor your advertising strategy to highlight the features you know will attract buyers, ensuring your home stands out in the crowded real estate market. This direct approach allows you to communicate the home’s unique appeal without the filter of a third party.
Showings
Who better to showcase your home than you? Conducting your own showings lets you share your inside knowledge and passion for your property with potential buyers. This personal interaction can build a rapport with visitors, allowing you to address questions and objections effectively and highlight the aspects of your home that make it special.
You are also in complete control over access to the property – no invasion of family time if you don’t want it.
Finally, we guide you though how to conduct a showing to determine level of interest, likelihood to buy, and tips on financially qualifying potential buyers.
Continuing from where we left off, here’s the next section of the revised article:
Navigating Legalities and Paperwork
Understanding the Essentials
The legal aspect of selling a home can seem daunting, but FSBO sellers are far from alone. With a plethora of resources at your disposal, including real estate attorneys who can offer services at a fixed rate, you can navigate this terrain confidently. It’s crucial to familiarize yourself with the necessary paperwork, such as disclosure forms, purchase agreements, and closing documents. By doing so, you not only protect yourself but also provide transparency that builds trust with potential buyers.
A Broker’s Insight on Legalities
In my years of experience, I’ve seen many FSBO sellers successfully handle the legal aspects of their sale. They often express a sense of accomplishment in understanding the intricacies of the process, which can be empowering. Remember, knowledge is power, especially when it comes to legal matters.
Effective Marketing Strategies for FSBO Sellers
Harnessing the Power of the Internet
In today’s digital age, the internet is your most powerful tool for marketing your FSBO home. Utilize online listing platforms, social media, and even your personal network to spread the word. Create a compelling narrative around your home with high-quality photos and virtual tours to attract potential buyers from far and wide.
Traditional Marketing Techniques
Don’t underestimate the power of traditional marketing methods as well. Yard signs, local newspaper ads, and community bulletin boards can be surprisingly effective, especially in tight-knit communities.
The Art of Hosting Memorable Home Showings
Creating an Experience
When it comes to showings, your goal is to create an experience that resonates with potential buyers. Offer them a guided tour of your home, highlighting unique features and sharing stories that showcase its warmth and history. This personal touch can make your home more memorable and is something that no agent can replicate.
Safety and Preparation
Always prioritize safety during showings. Pre-screen potential buyers and ensure you’re not alone during visits. Prepare your home by decluttering, cleaning thoroughly, and staging each room to look its best.
Closing the Deal: FSBO Negotiation Tactics
Negotiation as a Skill
Negotiation is an art form that you can master with research and practice. As an FSBO seller, you have the advantage of knowing your bottom line and can negotiate directly with buyers to reach a mutually beneficial agreement.
A Broker’s Negotiation Tips
In my professional experience, the best negotiations are those where both parties feel heard and respected. As an FSBO seller, practice active listening and be prepared to make concessions that don’t compromise your priorities.
No One is a Better Advocate for Your Property than You Are
Most of us share an innate level of trust in real estate professionals. The attitude that most people have is: “I don’t know anything about real estate, and they’re the experts.” This is understandable, and my clients have always put their trust in me whether selling or buying. Real estate agents have a fiduciary responsibility spelled out by law to protect the interests of their clients.
Yet I am always surprised when I hear about the number of malpractice instances there are in the medical profession. We all consider doctors as experts who know everything and rarely, if ever, make mistakes. The same goes for many professions; plumbers, lawyers, electricians, car mechanics …etc. We assume that they always know best.
But in the real world, people don’t know everything, and in the field of real estate it’s you, the seller, that has the greatest interest and incentive for a positive outcome. It’s your property and your money!
To be clear, I am not talking about deliberate malfeasance, but rather incompetence. The barrier to entry for becoming a real estate professional is often quite low. In the real world, there are many incompetent and untrained licensed real estate agents. Men and women are drawn in by the promise of big money commissions, part-time hours, and easy socializing. Many of these agents have never done a deal, or if they have, it could be as few as one a year! Is this who you want in charge of selling your home?
What happens when an offer comes in, and your agent pressures you to take it now? You may get the feeling that all she wants to do is get the deal closed so she can move on to the next opportunity. But is that what’s best for you?
No one cares more about the sale of your home than you do. You know every detail, good and bad, about your home and property. When coming to terms with a potential buyer, you will always have your best interests at the forefront.
The Resources Now Exist to Guide You Through the Entire Process
Perhaps you’ve noticed a recurring theme:
Selling real estate is portrayed as scary and arcane – it is best left to professionals
Another way of saying the same thing is:
You don’t know what you’re doing. We have special knowledge, tools and resources that aren’t available to you.
Well, those days are gone. In the past it was true that the professionals had access to advertising, marketing, listing, and training tools that weren’t available to the general public.
This is no longer the case. Resources like Project FSBO can provide you with the tools, knowledge, training, and tips & tricks that you need to meet with success. You can be better informed equipped than all but the very best real estate agents out there. And although the great agents have a wealth of experience that you don’t, you only have to worry about the sale of one property – yours. You can devote all your available time, effort, and resources in just this one transaction, and that is enough to close the gap with even the best professionals.
Conclusion
Selling your home on your own is not easy. If it were, the real estate profession would disappear, and everyone would do it.
On the other hand, it’s not as scary and dangerous as the established real estate community would have you believe. As you learn more about selling your own home on Project FSBO, you can make the informed decision of what’s best for you.
Say goodbye to hefty commissions and navigate through the process with a clear, unfiltered vision. Comprehensive guides and tools are at your fingertips on Project FSBO, ready to illuminate the path.
Embrace the adventure of selling your home independently, where the benefits stretch beyond the financial gain, into the realms of knowledge, autonomy, and personal satisfaction.
What’s next?
Do you want to find out more about if FSBO is right for you? Circle back to the main article for this topic: Expert FSBO Guidance and Education for an Anxiety-Free Home Sale.
You can return to the previous article in the series “Is FSBO right for you?” HERE.
Or jump ahead to the next article in the series: Do You Have What It Takes to Successfully Sell Your Own Home?.
Frequently Asked Questions (FAQ’s)
What financial benefits can I expect from selling my home FSBO?
Selling your home FSBO allows you to avoid paying the typical 5-6% real estate commission, translating to significant savings which you can invest elsewhere.
Will I have control over the selling process with FSBO?
Absolutely! FSBO gives you complete control over the entire selling process, allowing you to make all decisions based on your unique understanding of your home and circumstances.
How can I advocate for my property in FSBO?
As the most knowledgeable advocate for your property, FSBO allows you to present your home in its best light, ensuring your interests remain a priority throughout the selling process.
Are there resources available for FSBO sellers?
Yes, comprehensive resources like Project FSBO provide necessary tools and guidance, helping you navigate the selling process with confidence and knowledge.
How Can I maximize my profits with FSBO?
Eliminating agent commissions significantly boosts your net profit, allowing you to retain a larger portion of your home’s selling price. Project FSBO also provides insider tips and tricks to increase the market value of your home, generating a higher sales price.
Do real estate agents ensure a higher selling price?
Realtors often argue this, but it is unverifiable and may not account for the potential financial gains realized through FSBO.
Can FSBO be a viable alternative to traditional real estate sales?
Yes, FSBO stands as a viable, often lucrative alternative, especially for those keen on maximizing profit and maintaining control over the sale process.
Is FSBO less daunting than it appears?
While not a walk in the park, FSBO is less daunting than perceived. Resources like Project FSBO significantly demystify the FSBO path and make it accessible to the average person.
How do I ensure success with FSBO?
Success in FSBO comes from utilizing available resources to understand the entire process before you begin, accurately assess your property’s worth, and effectively market and present your home.
Can I really save on commissions by selling my home myself?
Yes, by selling your home yourself, you avoid the traditional real estate commission fees, keeping more money in your pocket.
Is it hard to navigate the FSBO path?
While it requires effort, Project FSBO resources are available to guide you, making the FSBO path more accessible and manageable for many homeowners.
Are there any hidden costs in FSBO?
It’s important to account for all costs, including marketing, listing, and legal fees, but overall, many find the savings outweigh these expenses in FSBO.
Can I get a fair price for my home with FSBO?
Yes, with adequate research and resources, you can effectively determine and receive a fair price for your home with FSBO.
Is FSBO suitable for all types of properties?
FSBO can be suitable for many types of properties, but success depends on your market knowledge, preparation, and willingness to undertake the selling process independently.
About Me
Project FSBO is an online DIY guide to selling your own home.
I am a Licensed Associate Real Estate Broker in the State of New York.
Since 2004, being a real estate broker is my profession and primary source of income. I have successfully completed hundreds of transactions with sellers, buyers, landlords, tenants, and investors totaling over $400,000,000 in sales so far.
My real estate business is strong, and with nearly 90% of sellers opting to use a real estate agent, I am not losing any business by sharing my successful home selling blueprint, strategies, tips, and even advanced negotiation techniques with you. Selling one’s home on their own is not for everyone, but if the prospect of saving thousands of dollars in real estate commission appeals to you, please feel free to explore Project FSBO now and see if it’s helpful to you.