R/E Agent vs. FSBO: How Will You Market Your Home?

Written by  //  November 7, 2007  //  Home Selling  //  11 Comments

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If you are planning to sell your home, will you be using the services of a real estate agent or will you be going the for sale by owner (FSBO) route? Selling a home has gotten very interesting over the past decade as surging home prices, price wars, and real estate fees have caused many home sellers to take a good, hard look at selling their home themselves.

Well, we’re not about to tell you which home selling method to choose but we will share with you the good, the bad, and the ugly of the home selling process.

Question: Our home’s price has gone way up since we bought our house, why should we pay a 6% commission to a realtor who will take a bigger chunk of my home’s profits?
Answer: Your home’s value is strong and reaping the financial benefits of selling your home should be a priority.

A professional real estate agent has the experience to set your home’s price; provide marketing; screen buyers; negotiate the selling price; work with other realtors, mortgage brokers, and attorneys; arrange home inspection; and make sure that everything related to the home selling process is handled smoothly so that your home closes on time.

Question: The agent’s fee is still too high. I expect my home to sell immediately, therefore won’t only a limited amount of marketing be necessary?

Answer: A realtor’s fee is negotiable. Some agents will accept a lower fee, but keep in mind that as much as half of the fee could be split with another broker. If you are able to get the lower fee, make sure that you still receive the full services promised by your agent.

Question: I’ve decided to go ahead and sell my home myself. What steps should I take to prepare for a sale?

Answer: You’ll want to make sure that your home is ready to be seen. Assuming that all exterior and interior preparations have been made, then preparing a marketing plan is the next step. An FSBO listing with a recognized online site is a popular way to go. You’ll pay a fee to have you home featured on the site and, in some cases, you can pay an extra fee for listing home via MLS in order to extend your marketing base.

A sign on your front lawn, notices in the newspaper, posting your listing on Craigslist, and word of mouth advertising are some other options worth considering.

Finally, you’ll want to make sure that you have reasonable times available to show your home to visitors. Expect to spend plenty of time fielding phone calls, answering questions, having people stop by to see your home and negotiating directly with prospective buyers.

Question: When selling my home via an agent I know that they screen potential buyers. What is involved in the screening process?

Answer: Real estate agents want to make sure that buyers can afford the types of homes they want the agent to show to them. Almost always, agents will ask the buyer about their annual income. Typically, this is a verbal exchange with no proof given. With FSBO you can do the same thing, but you risk wasting precious time showing your home to someone who doesn’t have the resources (or the interest) to buy a home from you.

On the other hand, if someone walks into your home with a qualifying letter from their mortgage broker you can contact the broker directly to verify their eligibility.

Question: What if I change my mind and decide FSBO isn’t right for me?
Answer: That’s easy — you can always choose to list your home with a realtor and forego the FSBO route. Lots of home sellers underestimate the work that goes into the home selling process and abandon FSBO if their home doesn’t sell as quickly as planned.

Another option is to keep your home FSBO but entertain agents who bring to you their customers. You’ll agree to pay them no more than 3% commission while saving time and money by going with a method that straddles your two options.

Going With What Works For You

In summation, selling a home does take a lot of work perhaps much more work than what you had expected. The agent’s fee is negotiable, so finding a happy middle ground could bring a suitable buyer to you without you feeling ripped off and the real estate feeling short changed.

11 Comments on "R/E Agent vs. FSBO: How Will You Market Your Home?"

  1. Luke Hoppel November 8, 2007 at 10:16 am ·

    I’ve sold 6 houses this year FSBO. I use a simple 3 step strategy to sell fast.

    1. Get a custom property website. (I use http://www.SuperCheapPropertyWebsites.com. They are the best for this.)

    2. Get a custom yard sign. (I use http://www.buildasign.com for this. Ensure you put the property website URL on the sign).

    3. Post ads on craigslist.com and in the classified ads. Ensure you put your website url here as well.

    That’s it. That strategy has been like magic to me.

    Good luck all,
    Luke Hoppel

  2. MattKeegan November 8, 2007 at 5:27 pm ·

    Luke, that is sound advice. Personally, I like FSBO and would seriously consider going this route if I had to sell my home.

    Craigslist is a terrific way to find or sell homes. I’m amazed at just how popular this free service has gotten.

  3. StudentsCreditCards February 20, 2008 at 12:19 pm ·

    Thanks for the insights, I plan to sell my home in the near future and was wondering about which way to go.
    I think I will go with an agent who will negotiate his rate with me.
    Jane

  4. MattKeegan February 20, 2008 at 12:59 pm ·

    Jane, that is a wise way to go. Don’t settle for the 6 percent fee — you can negotiate a lower rate and get full service to boot. Best wishes with your sale.

  5. Trafficmaster Tom March 3, 2008 at 4:32 am ·

    Thanks for some great advice. We are in the process of selling our home and there are so many pitfalls to watch out for. It is difficult to know what areas we should spruce up before trying to sell the house. At first we went for an agent who charged a fairly high commission. We didn’t get results. Now we are going for less expensive options. The Craigslist idea sounds great. Never thought to try it.

  6. MattKeegan March 3, 2008 at 9:05 am ·

    Tom, Craigslist is worth a shot. If you find a buyer, you can always approach a real estate agent and ask them to take over from there. Negotiate a 2% fee (3% tops) and they should be happy to finish up everything for you. Otherwise, find an excellent real estate attorney who can complete the job for you.

  7. Angie March 12, 2008 at 3:10 pm ·

    I think the most important step is to be realistic in what you can and cannot do. I’ve seen so many first time home buyers jump into something they cannot afford only because they have big dreams.

    Do your homework done first if you are thinking about taking out a loan or mortgage. The time spent looking into your options can save you a good deal of money later on.

  8. MattKeegan March 13, 2008 at 10:06 am ·

    Thank you for your comment, Angie. Exploring every option available to consumers is one way to save and avoid getting burned down the road. Big dreams can become a nightmare in short order if consumers leap before looking.

  9. Real Estate Resource March 24, 2008 at 2:36 am ·

    Correct, Craigslist is worth a shot and very effective if you make your listing there. It takes only 15 minutes to get listed if Craigslist.

    It depends on you where you are comfortable at of having your house sold whether by FSBO or through real estate agent. Either way is effective if you know what are the processes to be done.

    -Jan

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