Advantages and Disadvantages of Homes For Sale By Owner
Beyond the issue of commission, many homeowners are wary that real estate brokers -- for all their efforts and expertise -- may not have their best interests at heart. According to some economists and other financial experts, real estate agents may be motivated less by getting you the highest possible price for your home than by securing a buyer as quickly as possible. Since their actual commission as a percentage of the sale only rises by small increments for every additional thousand dollars of purchase price, few brokers are motivated to encourage sellers to sit back and wait a month or two longer in hopes of getting higher offers.
In his book "Freakonomics," economics professor Steven D. Levitt cited data showing that many real estate agents sell their own homes for considerably higher prices than those of similar properties for their clients. So, many sellers who tackle FSBOs are motivated at least in part by the notion that no one is looking out for their interests better than they are.
For sale by owner sellers (FSBO) have more devices at their disposal than ever before. Previously, you'd have to post a For Sale sign on your lawn, take out ads in the newspapers and real-estate circulars, put the word out to everyone you knew, maybe host an Open House, and then sit back and hope for the best. You couldn't get your property listed in the Multiple Listing Service (MLS), the marketing tool brokers use to share listings with each other in order to match buyers with sellers. The FSBO seller was definitely at a marketing disadvantage.
But recently, new real estate services have cropped up mostly online -- including Zillow, BuyOwner, ForSalebyOwner.com and FSBO.net among others -- catering to the FSBO market. For relatively small fees, you can reach hundreds of potential buyers by posting your property online and including color pictures and 360-degree virtual tours. It's even possible to get listed in the MLS for a flat fee through some of these services, though they may require you to be willing to pay a 2 to 3 percent buyer's agent commission.
If you are creatively inclined, you or a friend can take pictures with a digital camera and create flyers and brochures to distribute at open houses. Don't forget the power of word of mouth. Many homes are sold through personal and professional acquaintances, much like job networking.