FSBO or Bad Idea?
I am thinking of going for sale by owner on my little apartment. I’d like to sell it and am concerned that I will lose money if I have to pay a broker a commission. However, I have no idea how to do a FSBO. And quite honestly the idea scares me a little bit…
I am thinking of going for sale by owner on my little apartment. I’d like to sell it and am concerned that I will lose money if I have to pay a broker a commission. However, I have no idea how to do a FSBO. And quite honestly the idea scares me a little bit too! I’m wondering if some members of the b’stoner community can explain a few things to me.
What happens when the buyer comes in with a broker (how do they get paid?)
What is it like during open houses, is it uncomfortable? And during the negotiation phase? Is it hard to be the owner and negotiate the price?
Does anyone have anything they would avoid doing? Has anyone experienced mistakes they learned from?
I get the whole know-your-comps idea and price it accordingly. I also have an attorney that I trust, so I feel fairly confident on those fronts. But all else…mmm…not so confident. Would love to hear other’s thoughts or experiences.
Thanks!!!
ps to the few in the b’stoner community that know me, sorry for being so MIA. Unfortunately my work has got me buried under a huge rock and I never have time to keep up anymore. 🙁 please forgive me for my lapses!
You might want to consider doing a FSBO MLS listing for additional exposure. Just like it sounds – this is a flat fee MLS listing, perfect for FSBOs.
You pay a low flat rate to get listed on your local MLS, which is not only where any buyer’s agents would be looking, but will feed to hundreds of MLS sites across the web. Since 87% of buyers search for homes online, this is incredibly important exposure. And then, since you’re not paying a traditional Realtor, you save the commission you would pay a listing agent, and handle all other parts of the transaction yourself. You’ll find all sorts of information about how the process works here: http://forsalebyownerhomes.com
Good luck, whatever route you choose!
Thanks for everyone’s advice. I am fairly confident that I can probably do this without a broker’s assistance. Just trying to cover all the bases and learn from other people’s experiences. I appreciate all the thoughtful responses.
In all likelihood, I am going to move ahead with a FSBO. My kitchen was renovated in the past year and my bathroom recently as well. I will make some small repairs (broken closet door), but other than that, I think the apartment is in good shape to sell. Might want to contact a stager to come by though, since I think how the furniture looks greatly impacts the interest. Some people have a hard time seeing past the seller’s stuff. Anyway, I’m excited to embark on this and will most likely keep posting with questions! Thanks for the feedback all!
🙂
If you are in a coop, tell the board president. I am a buyer and have seen several apartments where residents are selling or plan to sell. They mentioned it to the board. I have contacted coop board presidents (through the coop’s address) and asked what is or will be available in their building. They usually know of sponsor, coop owned, and residents’ units. They give me the contact info.
It is a pleasure to work without the mumbo jumbo of “broker speak” and the 6% saving to the seller makes pricing more attractive to everyone.
Everyone’s advice is on point, yes def, just the on-line NYT ad – facebook, twitter seem to be getting more popular for listings. Mopar, believe me, I wish that were the case but the fact is, especially with coops, many people still work with buyer’s brokers and their opinions count. It may also help to do some slight upgrades in the kitchen and bathroom is they are really dated: grouting, new fridge etc but don’t go crazy.
List FSBO for a slightly lower price than you have in mind and offer cooperating brokers 3%.
When folks see a good deal, even in a bad market like this one, they get excited and sometimes are ensnared in bidding wars — all to your advantage.
It takes “ironballs” to list “below market,” but it’s the best way to sell, in my opinion, of course.
Everyone says the only need “one buyer” and are willing to wait. But, unfortunately, you could be waiting for years in this economy.
We unsuccessfully tried selling our place FSBO for several months. Then we got one broker who seemed to be even more incompetent than we were at selling. Then we took the place off the market and waited a year. Prices had fallen during that year and we put it back on the market with a different broker at a substantially reduced price (about 12% less than our asking price the year prior). Within 2 months we had an offer at close to that price (which closed several months later in November of 2009 – remember that time? not pretty). Overall that experience taught me that a good broker is better than FSBO but FSBO is definitely better than a bad broker. What made the broker good was both her personality (she basically just made people feel at ease) and the fact that she was known as a go-to broker for people looking in the particular area of the city we were selling. We never would have found the buyer that ended up purchasing our house if we hadn’t used a broker. There definitely are buyers out there who will work with a broker in looking for a house and won’t come to your FSBO open house. My experience is also that certain buyers will not go to an open house that’s FSBO (I know I generally tried to avoid them in purchasing a place), just because there is a bigger risk that it’s a total waste of time.
all the above advice is good, i’d say the most important things are a website with as many pictures as you can get (and a reasonable price) and listing it on NY Times online. I bought my place ~6 months ago FSBO and had an accepted offer 1 week after it was listed. Neighbor just sold FSBO, had an accepted offer quick too so i’d at least give it a shot for a little bit. You will have to do the work in getting the paperwork together from the coop, but if it’s a small coop or you are friendly with the board members, shouldn’t be too bad.
Great advice from Crownlfc. Thanks, that was very helpful. I agree if you are not confident, don’t have the time, etc., or live outside the area, a broker who knows what they are doing can be extremely helpful.
Re not missing buyers, I am pretty sure I didn’t miss any. In Brooklyn and Queens it’s mostly a disadvantage to work with a buyer’s broker and very few buyers do.
PS, it is uncomfortable having people traipse through your home and not admire it. You just have to let it be. As for offers, I asked people to put their offer in writing and told them I would need time to discuss it with my lawyer before responding. No reason to engage in stressful conversations without time to reflect/discuss. If you are lucky enough to have multiple bids, you can tell all the bidders that you have multiple bids and ask them to submit a final, sealed offer that includes details about their financials so that you have a better sense of whose offer is most likely to come to fruition in this economy.