Many people choose to sell their property on their own without guidance from a real estate agent. This is referred to as For Sale By Owner (FSBO). While this does help to save money in commission fees, it does require more effort and a thorough understanding of the real estate process.
Consider this article your beginner’s guide to navigating FSBO transactions.
What is For Sale By Owner?
In a For Sale By Owner transaction, owners handle the sale of their property without the help of a realtor. While it does mean they will face a few challenges, those who choose to go this route believe that the benefits outweigh the price.
Commission fees vary based on the real estate agent and the sale price of the home. It is not uncommon for sellers to have to pay an average of 5-6% of this amount. For example, when selling your home for $350,000, you can expect to pay $17,500 to $21,000 directly to your realtor.
The savings with an FSBO is significant.
Moreover, the seller will have more control during the sale process, including the opportunity to determine the listing price, schedule showings, and handle negotiations.
It is worth noting that, without a realtor, the seller will be required to put in more effort. They will handle all aspects, requiring availability to take calls about the property, be present for showings, and negotiate sale terms.
The FSBO Process
The only difference between a traditional real estate transaction and an FSBO is that, in the latter, the seller handles everything. To provide a bit more clarity about what is involved, below is an overview of the seller’s responsibility in this type of real estate sale.
Preparing the Property
The first step in the process is getting the property ready to sell. Because the goal is usually to maximize the sale price it is important to take care of any necessary repairs, perform any upgrades, and stage the property just right.
This is also the time when the seller will research comparable sales to be able to set the perfect price.
Marketing the Property
In an FSBO transaction, the owner is responsible for listing and marketing the property. Various platforms are available to help you with this. Of course, social media, word-of-mouth, and signage can help you get noticed, too.
A seller will want to take the necessary steps to get their property in front of potential buyers.
Legal Documents and the Closing
One of the most difficult parts of an FSBO is knowing the legal requirements of real estate transactions. A small discrepancy or error can be financially catastrophic for one or both of the parties involved.
All documents need to be prepared properly and legally — and getting this step right is essential.
As you move through the closing process and finalize the sale, having professional guidance and direction can make a huge difference in the success of the transaction. Many title companies offer FSBO services and act as facilitators for the closing, preparing the proper documents.
Hiring a title company to handle your FSBO transaction will come with a fee. However, it is a small price to pay for the confidence and peace of mind that the expertise will bring. Many FSBO sellers agree that this is the only way to handle the process.
Integrity Title & Document Services, LLC. in Cape Coral, Florida is a highly experienced title company that offers real estate assistance to sellers, buyers, realtors, and lenders, as well as legal document preparation services to pro se customers.