FSBO Success: An Overview

Real estate commissions are a significant expense and can tempt homeowners to try selling on their own.

When I sold real estate, it seemed certain types of homes had a good shot of selling successfully as a FSBO (For Sale By Owner) while others were likely to sit for months without a nibble. To decide whether you have a good chance of selling on your own, consider the following.

Location

When looking for a new home, buyers are often told to look for three things: location, location, location.
Location is important for FSBO sellers as well. If your home is in a popular neighborhood or on the nicest street in town, you have a better chance of selling it yourself.

In addition, consider the amount of traffic that drives by your home. A house located on a one-lane dirt road with no traffic isn't going to generate much interest and probably isn't a good candidate for a FSBO.

Curb Appeal

In addition to location, curb appeal is key for FSBO sellers.

A real estate agent can help overcome a less-than-appealing exterior. I once bought a home I'd called "the ugliest house in the county" because the salesperson begged me to walk through it, even though I'd told her to keep driving after we pulled up the driveway. Once in the house, I could see the renovation possibilities.

But when you're selling a FSBO, it's the home's curb appeal that attracts potential buyers. If the property's exterior isn't a draw, it's less likely to be a successful FSBO.

Condition

Let's say your home has loads of curb appeal and is located on the nicest street in town. That might be enough to generate phone calls, but once potential buyers are interested, the house must show well. That means cleaning out the clutter, neutralizing the décor, and having the house in good condition. A home in less than stellar condition is a more difficult sale, and that's true whether you list the house or not.
Another thing that limits FSBO success is uniqueness. A four bedroom, two and a half bath suburban home is fairly standard and salable (at least in my area.) But if your home is different from the type preferred in your area, (where I live colonials are the preferred style and contemporaries are less popular) it will be a more difficult sale and less likely to sell as a FSBO.

Pricing a FSBO

Homes in a subdivision are relatively easy to price because there are so many comparables. But if your property is one of a kind, pricing becomes more of an art than a science. That makes it difficult to hit that happy medium between a price that will bring the highest offer, but not be so high as to keep buyers away.

FSBO sellers often think they'll save the full real estate commission, only paying for a couple of newspaper ads, a website, and a sign. But when you sell as a FSBO, buyers expect to participate in the savings, and they may incur additional expenses because they're buying a FSBO.

If they're working with a buyer's agent, that agent will be owed a commission, and if you don't agree to pay it, the buyer will bear the responsibility. That commission can be equal to half your savings, and if the buyer pays it, they will reduce their offer by that amount. The buyer may also enlist the services of an attorney to review the paperwork-another additional expense.

You're going to compete with lots of listed properties. If you want to sell your home on your own, set the price somewhere between the amount a real estate agent suggests and the net price you'd receive after deducting the commission.

Market Conditions

The best chance for any property to sell is during a period of high demand. If the market is flooded with homes for sale, selling will come down to price. In that situation, you typically have to undercut the competition, and a FSBO, with their limited contact with buyers, may have to cut their price more deeply.

Of course there are other things to consider when deciding whether to try selling your home yourself, such as how quickly you need to sell and if you have time to prepare ads, talk to possible buyers and show the house.

If your house is in excellent condition, has curb appeal, and traffic driving by to generate calls, and if the market is brisk, you have a reasonable chance to sell your home yourself, if you're willing to spend the time and effort to do so.

But if your home has little drive-by traffic, doesn't have an attractive exterior, isn't in the best condition or of a popular style, and if the market is very competitive, you might try to sell yourself for months, only to list in the end.

So give your home and the market a good hard look, and proceed accordingly.