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Flat Fee Listing service for FSBO's
  
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Should I List
With A REALTOR® or Sell For Sale By Owner (FSBO) Using a Flat Fee
company
"Why should I use a
realtor to sell my home when I can do it on my own and save the
commission?" In this economy, I have been told this several times when speaking with
someone trying to sell on their own. So I have teamed up with
Summerfield-Real Estate, LLC to help FSBO's sell their home
without the strict guidance of a realtor, but with the option of
having one around if you need one. We'll talk about that at the
bottom of the page.
Thousands of people buy and sell
homes each year without the representation of a REALTOR®, but
for all the Mr. & Mrs. Doe's that buy or sell once every 8 or so
years, I would suggest interviewing a few agents before goin
gout on your own. Just like
any industry, Realtor Laws and Forms change quite often. Having a
knowledgeable Agent taking the reins can be a huge asset and
well worth their fee.
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Lets Compare
Selling FSBO and Listing With an Agent
NOTE: The figures have been grossly
exaggerated as to not imply any industry standard. |
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There are several reasons to sell For Sale By Owner and
several more to List with an Agent. Take for instance this
scenario.
A busy homeowner decides to put his house
on the market and interviews 3 Agents from different
companies. He is also considering selling on his own. His
list price is $350,000 and owes $250,000 on his mortgage. He
does not have a 2nd mortgage. His gross equity in the home
is $100,000. Each of the agents he interviewed are asking
for a 8% commission fee and his estimated closing costs will
be 3% of the sales price.
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Cost of Sale
Comparison |
|
Selling Options |
For Sale By
Owner/FSBO |
Full Service Agent/
Broker |
|
Price |
$350,000 |
$350,000 |
|
Total Amount Owed |
$250,000 |
$250,000 |
|
Estimated Commission |
0% |
8% |
|
Total Commission
Costs |
$0.00 |
$28,000 |
|
Estimated
Closing Costs % |
3% |
3% |
|
Estimated Closing
Costs $ |
$10,500 |
$10,500 |
Total Commission &
Closing Costs |
$10,500 |
$38,500 |
|
Total Net Proceeds
from Sale |
$89,500 |
$61,500 |
From the above
scenario, it looks favorable for the homeowner to sell on his own.
Lets break it down a little further.
The homeowner
is a very busy person and can only show the home on weekends. He
purchases a ream of paper for $8.00, a flyer tube for $20.00,
takes some photos, makes a quick flyer on his home computer and uses
his own printer to print in black and white as color cartilages
are expensive. He puts about 10 in the tube and sets it up
outside his home. Two weeks go by and people take his flyers but
he gets no phone calls. The homeowner thinks "This is ok" and
decides to put off some plans for the next two weekends and
holds Open Houses. He makes new black and white flyers, puts an
ad in the local paper that costs him $100.00 per weekend, buys 2
Open House signs for $10.00 each, food for the buyers costs him
$40.00 per weekend and he waits. The curious neighbors come through and
maybe bring a friend or two, but no serious buyers. By now
4 weeks have gone by and the homeowner gets a little frustrated.
He decides to purchase space in the MLS from a flat fee listing
company that charges him $1,000 and a 2% fee when the house
sells. The homeowner thinks this is still better than 8%. He
provides the photos and descriptions and signs the contract for
3 months.
A few calls
come in for showings, but they are during the week. The
homeowner asks for the agents to come by on the weekend. Some do
some don't and still no serious interest. He's so busy during
the week he forgets to follow-up with the agents that visited to
see what their buyers thought. 90 days
into selling the homeowner gets an offer $30,000 lower than his
asking price. Wanting just to sell, the homeowner decides to
take the offer.
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Cost of Sale
Comparison |
| Final Selling Price |
$320,000 |
| Total Amount Owed |
$250,000 |
| Gross Equity |
$70,000 |
| Signs, advertising, paper, food etc |
$328.000 |
Total Commission Costs from
Limited Service Co. (MLS spot) |
$1,000 + $6,000 |
|
Estimated Closing Costs % |
3% |
| Estimated Closing Costs $ |
$9,000 |
Total Personal Expenses, Commission
and Closing Costs |
$16,328 |
| Total Net Proceeds from Sale |
$53,672 |
Lets see how much he really made....
$53,672 FSBO v/s $61,500 listing with a Realtor
Not taking
into consideration the cost of his personal time this homeowner had
invested into selling his home and the missed weekend
outings so he could monitor the Open Houses, it looks like
he ended up making less than had he signed with an agent who
would have relieved him of the open house obligations and
costs, negotiated the final sales price and possibly
sold it sooner.
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