Before you place a "For Sale" sign in your front yard and sit back and wait for the phone to ring, you must first determine if being a FSBO is for you

Should you, as a homeowner, looking to sell your home, consider selling the property yourself or take the conventional route and engage a Realtor? That is the preverbal $64,000 question – or if you use the national average sale price of existing homes of $268,000 – the $16,000 question. Based on pure value, this is a question that really should at least merit consideration. For Sale by Owner (FSBO) is not for everyone. In this article, I want to go over the pros and cons of each method of selling your home.

Why should you consider FSBO

First and foremost – you save money – simple statement to make. How do you save money? You don’t pay the typical 6% real estate commission associated with a real estate brokered listing and sale. This isn’t just any money - it is your tax free (usually) home equity. Money that you have ultimately earned either through appreciation, home improvement, sweat equity or savvy real estate investment. Anyway you slice it, it’s YOUR money. It is often said buying a home is the single most important and largest purchase of an individual’s life. Does it not stand to reason that selling a home represents the single most important “Sale” of an individual’s life? The National Association of Realtors will tell you that FSBO homes sell for 16% less then Realtor sales. The problem with their calculations is they use a flawed formula to support their argument - they use a MEDIAN price as opposed to an AVERAGE price. The median is a “middle number” in a series of numbers - the average is a sum of all numbers divided by the total number – which is what as a homeowner cares about.

Another consideration is that an FSBO can take all or part of the real estate commission savings and deduct it from the price of their home to expedite a sale. This works great in a “soft” market or if you simply have to sell your home in a limited amount of time. You can also use this cash to provide "seller assist". Many mortgage companies will let you pay up to 6% of the buyer's closing costs. Since many buyers are cash-strapped, you can sell your home faster by helping a buyer get into your home.

Do you need a Realtor in a hot real estate market? I would say – no! If the homes on your street or neighborhood are selling within 2 -4 weeks of listing do you really think there is some hot shot realtor responsible for it – the market is responsible. It could be related to all sorts of things, including local economy, zoning, school system, new amenities, or a number of other factors but rarely, if ever, is it due to a Realtor. List your home FSBO – it will sell just as quickly and in the same price range

Another advantage of selling FSBO is the simple fact that you know your house better then a Realtor. Buyers that are interested will ask very specific questions like what type of perennials are in garden or what the neighbors like.

In fairness this can go the other way too; some homeowners do more harm then good – they cannot help themselves.

I personally attest to this with listings at FreeFSBO.com that just seem to go on and on. It is important not to overwhelm a potential buyer to the point that they never want to risk exposing themselves to that situation (the homeowner) again.

Why you shouldn’t consider FSBO

FThere are over 2 million licensed Realtors nationwide. Most are highly trained and experienced professionals. Can a single FSBO compete with this – maybe (14% of all existing home sales are FSBO).

Realtors may have clients that are looking for a property just like yours. That said, they will normally approach you if they do – they will ask if you are willing to cooperate and likely request that it be formalized and have you sign a document agreeing to pay their commission. Beware if they ask you to sign a listing agreement that is longer then 48 hours they may just be trying to grab your listing and the “buyer” may be fictitious – do not pay over 3%.

You simply may not have the time required to undertake an FSBO – for every four people that say they are coming to look at the property one will likely show up – get used to that fact. Don’t get your feelings hurt if someone doesn’t like your taste or property – that is just reality.

If a potential buyer calls and wants to see your home at a moments notice you may have to drop what you are doing and rush home to show them your home. If you’re not prepared to deal with that or if your job does not give you the flexibility to be home when prospective buyers want to see your home, then maybe FSBO isn’t for you. Buyers want to see as many homes as possible. If you are not available for that prospective buyer, then that buyer may quickly forget your home unless it offers something special.

You do not possess any sales or marketing skills. I know it’s not easy to admit, but if you are an introvert – forget it. Most successful Realtors are extroverts and spend countless hours attending social functions, clubs, associations, golf courses (sorry had to throw that in) to generate leads and contacts. They have usually taken countless sales training courses and most importantly, they know how to close a deal.

Multiple Listing Service (MLS) – this in my opinion is the single most important advantage that Realtors have over FSBO. The MLS is made up over approximately 500 individually owned and operated MLS organizations. It is essentially a nationwide repository of existing properties available for sale. It provides both realtors and buyers alike an opportunity to locate properties using a number of search criteria including, but not limited to, geographic location, size, price, bedrooms, bathrooms etc.

There are two factors to consider here – one - you can buy a Flat Rate MLS at either a national or county level and take advantage of the marketing exposure that MLS provides – it will cost you in the range of $299 - $599 and an agreement to pay 2 - 3% to a selling agent if a Realtor sells your home. You do however maintain the right to sell your property yourself without paying a commission fee. As far as “quality” of exposure goes, I truly believe that an online FSBO listing is superior (in appearance and functionality) to an MLS or realtor listing. That said, no FSBO website enjoys the level of traffic and potential buyers offered by Realtor.com.

Are you willing to pay for advertising? How are people going to know your home is for sale? Do you really expect many people to drive into your neighborhood, see your home for sale sign and actually call you? In order to sell your home FSBO you need to market your home. You are competing with real estate agents who spend thousands of dollars finding buyers and marketing their listings. These agents also market their listings using the MLS, which you don't have access to (unless you are willing to pay a co-broker fee). What is your marketing plan? How will people see your home?

Do you have the necessary paper work to complete the deal? What happens if someone makes an offer? Do you know how to make a contract? Can you get the buyer, attorneys and banks to the closing table? Real estate agents take care of this for you. You don't want to spend money to market your home, show the home, and get a buyer just to lose them at the paper work stage. Be prepared to do some serious paper work.

Do you know how to price your home so that it will sell? The right price is key to selling your home. You must know the value of your home. Price is the single most important factor in selling a home. If your price is too high you will never sell it. If your price is to low you will miss out on getting all you deserve. Get your home appraised online using free home appraisal services. There are several services on the internet that offer free home appraisals so use at least three and average the appraisals. Once you have a good home appraisal it is much easier to sell your home.