OT: For Sale by Owner Home Selling Advice, Experiences, etc.

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Posted By: Kyle

Hey Everyone,

I'm using up my off topic freebie for the year, with Leon's permission granted.

In the coming weeks and months, I will be selling my condo without the use of a real estate agent. I can't financially afford the 4-6% commission fees, so I've decided to see what I can do. My agent thinks I'm nuts, but I think he's just mad he's not going to get any commission.

So I am trolling for any advice, insights, past experiences, suggestions, etc. from board members who have done the whole sell on your own thing. What to look for, what to avoid, what works best and worst. I've been told I'll need a lawyer, and I've also been told otherwise.

I appreciate any and all input, and thank you to those who share their experiences.

Have a great night,
Kyle

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Posted By: Steve M.

Lots of lawyers on this board, me included. It will help if you identify the city and state.

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Posted By: Kyle

Hi Steve,

Clayton, Missouri.

Much appreciated,
Kyle

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Posted By: Mike

My parents recently sold their house "by owner" and it went swimmingly. I would consult a lawyer near you who handles all of this type stuff and make sure that they can take care of all of the forms for the sale.

My only suggestion would be to trust your instincs and if something smells wrong in the process it probably is. If your home has a lot of comparable sales and you don't forsee any problems with inspections or appraisals, I say go for it. The worst case scenario is that you end up hiring an agent later if you don't get what you originally ask or something else goes wrong.

I also purchased my first home from a "by owner" seller and it went very well too. Good luck!

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Posted By: Steve M.

email sent. Would be pleased to talk.

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Posted By: JimB

Unless you really know the real estate market and how such negotiations are handled, I think a good agent can more than pay for themselves in a number of way.
JimB
P.S. I am not a real estate agent.

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Posted By: Frank Wakefield

Hey there.

Using yourself for the agent isn't as crazy as using yourself as a banker. Don't finance the sale. If a bank won't loan them money, then you don't need to be doing it.


As for the agent, consider getting creative and offering some sort of commission that is structured to encourage them getting a better offer.

If sale price is 80% of you estimate, commission is $100.

If 85%, they get 2%
If 90%, they get 3%
If 95%, they get 4%
If 100%, they get 4.5%
If 103%, they get 5%
If 108%, they get 5.5%
If 110%, they get 6%
and they get 10% of everything over 110% of sales price.

Something like that would give them an incentive to hustle!!

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Posted By: Joe Jones

If you have any questions I would be glad to help.

Thanks for the nice comment about Realtors Jim.

(I am a Realtor)

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Posted By: barrysloate

I would use the agent but get him to lower his fee. Everything is negotiable. I think there are too many areas where you can make a mistake if you've never done this before.

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Posted By: boxingcardman

It should only cost you a fraction of a commission cost and if something goes wrong you can recoup with malpractice insurance.

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Posted By: Alan

It's just like selling an expensive card. You have to find a buyer. Does the condo grade near mint ?

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Posted By: andy becker

kyle,
i tried to sell my previous home myself. big, big mistake.

my house, which was high end for the neighborhood, sat on the market 6 months....in a 45 day market.....you just cannot create the traffic that an agent can. sunday lookers by the dozen, real buyers....not that easy.

the sale ruled my life.....open houses, being home for every appointment, negotiating, etc.....it was bad, really bad.

and after the six months, i had to dump under market.....like a t206 set under market ....but i did save the fees!

good luck in whatever you decide kyle.....

-andy

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Posted By: Kyle

One reason I am leaning towards selling it myself is the timeline it will give me. If it were to take 6 months to sell it at my original purchase price, I'd still save money versus using an agent. I don't think my agent will budge on the commission rate as he'll decide its not worth his time. I could find another agent, but I'm up for the challenge of doing it myself, and hiring a lawyer to facilitate the transaction.

I plan on creating a website, putting a sign outside, listing on craigslist and taking appointments when requested. If necessary, I can host open houses. Lucky for me, I work out of home and can pretty much make any appointment. So we'll see. The area I live in is very demandable, and I'm more than confident the condo can sell. Med students are coming in this summer!

Thanks for all the input!
-Kyle-

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Posted By: Judge Dred (Fred)

I like that sliding scale. The only issue would be in a lot of areas the price of home is $500K (and that's cheap). If they take a quick offer of 85% ($425K) then they'll still bank $8.5K for doing very little (losing $75K for the seller) or nothing at all except list the property.

Those numbers work good on smaller scale home sales. I remember when $200K was a modest home and 6% (isn't that the industry standard) was $12K. Could you imagine paying 6% on $500K? That's $30K for trying to get market value for a house. To me it's nuts. Why should someone pay $18K more to sell the same house a few years later when there's not much effort in a truly moving market. I've seen so many people flipping houses (like people flipping cards). If someone put a house on the market and it sold in 5 days (at 100%) then the price was probably under market and I'd be a little peaved if I was the seller. I guess it's hard to balance all of it.

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Posted By: Dan Kravitz

Kyle-
I own a real estate company in Chicago... Chicago Properties Inc. I can't tell you that you are making a mistake, but there is research that the average FSBO (for sale by owner), realizes 18% less than a licensed real estate broker. Among other things, I think it has to do with the way that it is marketed and the relationships with other brokers that you would not have. That being said, I think you could sell your unit by yourself, cause it just isn't that hard.

If you need any secret pointers, you can email me. dan@chiprop.com

Good luck!

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Posted By: JK

Kyle,

If you sell it by yourself, you will still have to offer the buyer's agent (assuming there is one) a commission or else you wont get any traffic at all. Any ad should state that you will pay the buyer's agent a commission. You should also pay to list the house with the multiple listing service (there are ways to do that now even if you are not an agent yourself).

My wife and I recently sold our house and unintentionally/luckily were able to do it by owner. About a month before we were ready to put our house on the market, the agent who worked as our buyer's agent (we had already purchased a new house that was being built) told us that she had some buyers coming in from out of town and wanted to show them our house. To make a long story short, her buyers ended up choosing our house. I technically sold it "by owner" but did pay the agent a 2% buyer's agent commission.

I do think that most FSBO properties are listed too high and that is one reason they dont sell. My father in law recently tried to sell their house by owner and had to hire an agent after 6 months. It sold, but for a good bit less than they had it listed (though probably closer to market). Finally, I agree that you should have your own lawyer look over any paperwork, but typically, its the buyers who select the closing lawyer (and pay for it).

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Posted By: S. Gross

<<...told us that she had some buyers coming in from out of town and wanted to show them our house.>>>

Reminds me of one of my favorite Bugs Bunny lines:

"Well...., I did have a nice young couple from Kansas City come through this morniing....."


To get back OT: Get an agent, you'll sell it for much more than the 6% vig.

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Posted By: peter chao

Kyle,

Mr. Gross idea of having an agent is right on point. I'm an attorney in the SF-Bay Area and I would never sell a house or condo on my own. Too many things could go wrong. It's okay to buy without an agent, but it's far too dangerous in this litigious society to sell a property.

Good luck.

Peter

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Posted By: pat

i have bought and sold over 10 properties at my age (37) and i strongly suggest that you use a realtor. you normally can build the 5 or 6 percent commission into the price and the exposure is multiplied many times over. i know 1 person who tried to sell a house on his own and all he got was unqualified buyers who just wasted everyone's time. after 6 months, he finally hired a real estate company and the house sold right away. of course it was in a down market so they probably cost themselves an extra 10 percent in the long run by screwing around.

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Posted By: Silver King

I am sitting in a hotel in Alton Illinois working on my fixer upper and I have a "for sale by owner (fsbo)" sign in the front yard. I have the fsbo sign outside only to generate some interest and see if somebody might bite. The house was built in 1885, an old Victorian that is beautiful. The home will be completed within two weeks at which point I will hire an agent to sell it for me.

I am not a real estate agent but my family is back in California. I have done many fsbo's but I always make it very clear that I will pay a full 3% commission to any buyer's agent. I put the homes in MLS and advertise heavily in the paper. Bottom line is that I don't overprice anything and once an agent comes around with a buyer I'm happy to pay the 3%, play dumb and let them do all the paperwork. It's a pretty good deal. However, I strongly recommend an agent to most people. Even if you don't like paying a full 6% commission, chances are that you will get more action which will generate a few pecent more than fsbo.

robert shaw

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Posted By: Kyle

I was able to show the condo twice yesterday, but it doesn't look like either will be biting. If anything, I think I can get 3% more than what I paid, and use a buyer's agent to cover the paperwork.

Thanks to all those who have helped me and provided a lot of insights and suggestions. I've really appreciated it.

Have a great weekend,
Kyle

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Posted By: leon

I sold our/a house about 7 yrs ago before we mistakingly built one a little too big...but anyway, I did use an agent to sell it. I had 2 real good ones come over and try to "sell" me on their services. They were both tit for tat....really good. It was a toss up. I told them both as much. I asked the first one if he would negotiate his 6% (of which he might pay a buyers agent 3%)....he said he would negotiate...but only up .......I asked the other guy...he said he would come off 1%....he was hungry and got the deal...the house sold in about a week for very close to the asking price...It was all good...I just wanted to give another example in case the FSBO doesn't work....good luck...