Mr ABC had a pretty good understanding of the real estate market. Having bought three houses in the area, he was familiar with the process, and as a lawyer, he was undaunted by the legalese.
So when it was time to sell his house last year, Mr ABC thought, “I can do this on my own.” After all, given housing prices, the 6 percent commission normally paid to real estate agents could amount to $40,000 to $50,000 — a pretty hefty savings if he didn’t use an agent.
So he gave himself a challenge.
“I decided to get the house ready for the market as much as possible,” he said, “put it on the market and spend 30 days trying to sell it on my own.”
If it didn’t sell in a month, he’d enlist the help of a real estate agent.
In real estate wording, Mr ABC was doing an FSBO, short for “for sale by owner.” It’s the do-it-yourself way of selling a home, which involves prepping, pricing and marketing a home — plus negotiating with buyers and conducting the closing — all without the help of a real estate agent. In the process, sellers save some or all of the 5 to 6 percent commission typically paid to agents.
FSBO transactions have been declining in recent years. The National Association of Realtors estimates that about 7 percent of home sales nationally are FSBOs, down from 14 percent in 2004.
Given the popularity of sites like eBay and Craigslist, “people are used to selling things on their own. There’s a growing population of people who feel that they know their home as well as anyone and can sell that home better than anyone else.”
And if that means they’ll save a bundle in commission fees, why not give it a shot?
Ultimately, that’s what happened to Mr ABC. But first, the lawyer — fixed up his house and yard, spent time researching comparable properties to price the house accurately and had the house listed on the MLS.
He held open houses, “but they weren’t as busy as I thought they might’ve been. They had only a trickle of people,” he said.
In retrospect, Mr ABC said, he would’ve done one thing differently. On the MLS listing, he had stated that he would pay only a 1 percent commission to the buyer’s agent, rather than the usual 2.5 to 3 percent.
“I suspect part of the lack of interest in the house was because agents saw they wouldn’t make any money on the house,” he said. “Were I to do this again, I’d probably say I’ll pay a 3 percent buyer’s agent fee.”
In the end, only a couple of people expressed interest in the house, and no one made an offer. After 30 days, MR ABC hired an agent, Mr XYZ. Mr XYZ said Mr ABC's original price was a good one.
A few weeks later, a couple who had come to one of the early open houses approached Mr ABC and made an offer. That’s when having a real estate agent turned out to be most useful.
“XYZ was very helpful in the negotiating process with the buyers and their agent. Where my instinct was to compromise, his was to hold firm,” Mr ABC said. “So Mr XYZ paid for himself, and I ended up getting full asking price.”
All of which isn’t to say that FSBO doesn’t work. It may well be worth trying — but if it doesn’t succeed, there’s no shame in calling a professional.
It always helps working with licenced Realtor.
I have been full time Realtor since 2003 and loving this business.
For properties for sale in Surrey Langley White Rock, North Delta call 6045189000 or visit https://www.vijayvirk.com/