I have recently come across some For Sale By Owner (FSBO) properties on property searches for my buyers. Fundamentally I have no problem with sellers trying to sell on their own, and for some people this setup works. However, after looking at some FSBO listings and touring some FSBO homes, there are some basic pieces of advice that I can give you as a seller trying to sell your home on your own.
- Post lots of photos on the MLS – If you are paying to list your property on the MLS, spend the extra money and make sure you can post a bunch of photos. I just worked with a FSBO seller who bought the “cheap” MLS package which only includes one exterior photo of the house. Buyers expect to see interior photos of a home, even if it is in poor condition or outdated. With only one photo posted, most buyers will think that you are hiding something or that something inside is wrong with the house. You will maximize your potential buyers with high-quality photos of both the exterior and interior of the home.
- Let the buyers see your home privately – Many sellers who choose the FSBO route are rightfully proud of their homes and want to show them off in-person. However, buyers generally want to see a home without sellers hovering over their every move. In a perfect world, a buyer wants to see a home privately with their agent so that they can speak freely about their opinions of the house. Security is another obvious concern. If you have signed up to have your home listed on an MLS, they will generally also provide a keybox. If you set an appointment policy, the keybox does provide assurance that showings will not take place unless under the supervision of a licensed real estate agent. The keybox will also track who has come in to your house and what time, for added peace of mind.
- Understand what your are signing – Listing contracts outline specific legal requirements of the transaction. Most importantly they outline details about agency representation and how agents are compensated when your home sells. If you sign a listing agreement that specifies a 3% commission, this will apply to all buyers who come to you with an MLS-member agent. Also keep in mind that the buyer’s agent is representing the buyer and cannot legally or ethically advise you on your contractual obligations. Seek counsel from your FSBO listing agent or attorney if you are unsure about the documents that you are signing.
- Pay a reasonable buyer’s agent commission if you list on the MLS – With our current commission system, buyer’s agents do expect to be compensated by the seller for their efforts when bringing you a buyer. While I don’t agree with this agent behavior, if you set a very low selling commission, it will reduce agent willingness to show your home. Also, keep in mind that if you require buyer’s to pay their own agent, many will ask for this as a concession in your sales price.