When it comes time to sell, some homeowners with do-it-yourself inclinations try to pocket more cash by selling on their own and avoiding agent fees. But this strategy takes extra effort in today’s troubled housing market, where jittery buyers may want the hand-holding provided by an agent and homes may sit longer on the market.
The for-sale-by-owner, or FSBO method has become easier in recent years thanks to the rise in popularity of the Internet and discount real estate agents that will help with certain specific tasks like putting a home on multiple listing services online, providing blank sales contracts and helping with issues like advertising and setting the asking price for only a few hundred dollars.
But the do-it-yourself seller faces one big obstacle: Because the seller is the one who pays the usual 6% commission that is split equally between the buyer’s agent and the seller’s, buyers who prefer to use an agent will have to pay those fees themselves.
Buyers are especially cautious today, largely because of uncertainty over where property values will go in the future, and because it’s hard to sell a home today, the market favors first-time buyers who don’t have to sell an old home before buying a new one. Many of these first-timers will choose to use an agent, who knows the area, has a good sense of prices, handles negotiations with the seller, and can even offer some guidance on choosing a mortgage.
The FSBO practice can definitely be a financial boon to sellers, though. On a $300,000 home, the standard real estate agent’s 6% commission would come to $18,000. For a seller managing the transaction, that saved money either stays in the seller’s pocket or presents an opportunity to trim the price, which might improve the chances of finding a buyer.