For Sale By Owner - FSBO - in Seattle
Thinking of selling your home yourself, without an agent and “by owner”? There is a ton of good information about it on the internet (just Google it!). Here are a few modern and state-of-the-art tips from us, plus the pros (what savings!) and cons (oh, what a hassle…).
FSBO (For Sale By Owner): How and why (or why not).
Make sure you go into this project with your eyes wide open. As you’ll learn, there is a “hidden” downside to FSBO that might — might! — outweigh the huge savings. But first…
“For Sale By Owner” explained
True “for sale by owner” sellers are not using any real estate brokers (also called “agents”). Usually, a seller hires two agents: one works for the seller (the “listing agent”); and one for the buyer (ironically, the “selling agent”).
The Multiple Listing Service is the database maintained by local real estate brokers of homes for sale. It is the best way to reach the biggest audience of possible buyers.
But in order to list on the MLS, a seller must offer a commission to the buyer’s agent. Typically, that is 3%, and on top of an additional listing commission of 1-3%. It’s why commissions are close to 6% — even though the internet was supposed to change things.
So a true FSBO seller — any seller who really wants to save the most money possible, hopefully the full 6% — must find ways to market the home and find a buyer outside of the local MLS.
Zillow is the place to sell For Sale By Owner
Look no further than a homegrown web site, Seattle’s own Zillow. It provides a fantastic alternative to the local Multiple Listing Service.
Zillow launched with its now famous “Zestimate,” an algorithmically derived estimate of a home’s market value. Intially (and was all the rage back then) it had no revenue stream. But today, Zillow makes its money from ads placed by buyer’s agents. When you find a house for sale, you’ll see three agents on the side who would be happy to help.
Which means that Zillow requires buyers. If buyers aren’t using the web site, their revenue stream will evaporate. It is giant, publicly-traded company. Rest assured, it will make sure it gets buyer traffic.
Here is the best part: Zillow offers For Sale by Owner listings. That’s right! You can hang a “For Sale” sign on the internet right where millions of buyers are shopping for a home. Mission accomplished!!!
Work required to sell For Sale by Owner
Unfortunately, that is the easy part. Now the real work begins. You’ll need to “tech skills” needed to navigate the Zillow process. You’ll need pictures and a good description of the home. You’ll need the confidence to price the home correctly (although you have a lot of slack by saving 6%). You’ll have to make sure you understand your legal obligations as a seller. Hopefully, you’ll get an offer — and then you’ll need the confidence to negotiate with a real estate professional.
You can get help, of course. Stagers, appraisers, particularly lawyers — all of them can be hired to lend a hand as needed.
Oh yeah, the payoff. Possibly running into the tens of thousands of dollars, depending on your sale price. An average Seattle home is worth about $700k. So the FSBO savings at 6%? More than $40 grand. WOW! A year of college. Or a trip of a lifetime.
The incredible hassle of selling FSBO
Finally, the really big downside: Real estate brokers. Here is how they manage to pretty much ruin the experience.
FSBO sellers are a known “lead generator” for real estate agents. Some brokers make a living by looking for FSBO listings. They contact the seller and try to get the seller to list with them on the MLS. Because it is so hard, many sellers do indeed give up and hire a real estate agent. They will oftentimes hire the agent who first contacted them.
Unfortunately, to get a conversation started, many if not most of these agents will say they “have a buyer.” This is received as very very encouraging — even though it is not. It is just a real estate agent trolling the waters. They don’t “have buyers” these days. Buyers search the internet — including Zillow! — to find the home they’d like to buy. Back in 2014, 92% of buyers used the internet in their search. Surely that number has only gone up.
So expect to hear from real estate brokers. Lots of them, and many times. Expect some of them to dangle the promise of “a buyer in your area.” Expect to get frustrated.
Or hire RobotAgent and still save a ton.
We are an absolutely fantastic FSBO alternative. We’re a full service real estate firm. We just charge less. Way less.
Our modern flat commission structure allows for big savings. And our modern, online alternative to the buyer’s agent gives you the chance to save even more. Our listings include a 3% buyer agent’s commission. But if a buyer uses the web site, the seller doesn’t have to pay that commission. We pass some of that value back to the buyer by a price reduction. Everyone wins!
Contact us to learn more or get us on board to sell your home.