Selling Your Home Yourself: Just the FSBO Facts, Ma’am!

You may be considering using different approaches to selling your home. If you want to know the real monetary differences between selling it yourself (FBSO), using a Flat Rate discount broker, or using a top notch real estate agent, then this post is for you. Previous posts have dealt with 4 Types of Home Buyers, 5 Key Factors to Consider Before You Try to Sell Your Home Yourself (money, work involved, marketing, time on market, and relevant laws), how time on the market affects the sale of your home, how the founder of ForSaleByOwner.com ended up using a real estate agent, and even a FSBO quiz to see if you are suited to sell your house by yourself. But this post will go through the actual dollars involved in each choice based on typical sales in the third quarter of 2015 provided by ChartMaster Services, LLC. These are the most realistic currently available figures in the Atlanta, Georgia real estate market.

FSBO Facts: Comparison 1

According to the data, the average market value (what a willing buyer will pay a willing seller for his house) for a seller’s house today is $250,000. This figure is then used for the comparative figures. The real estate commission is assumed to be 6% with 3% going to the selling broker and 3% to the buyer’s broker. This is a common but not a fixed rate and may be negotiable higher or lower. The third quarter data from total closed sales reveals the following key statistics:

1. 54.4% of total listing inventory was initially overpriced.
2. 38% of closed sales underwent a price reduction in order to sell, received 93.1% of the listing price and took 84 days to sell.
3. 62% of closed sales required no price reduction and received 98.7% of the list price and took only 17 days to sell.

Other assumptions include:

1. The FSBO prices the house at $265,000 (to price in the commission he expects to save).
2. The monthly carrying costs for mortgage, taxes, insurance, utilities, is $2000 or $67 per day (you might also have to price in HOA dues and be prepared to fix anything that breaks down while you are still holding the house).
3. The market value price set by the agent using comparable sales and ChartMaster Stats is $250,000.

Net Result: FSBOs make $372 less, all while being on the market 73 days longer, and doing all of the work themselves.

FSBO Facts: Comparison 2

Second comparison assumptions: Seller pays $500 + 0.34% at closing. Although this is from a well known company, charges may vary and typically include additions for lock box, pictures, and other promotions.

Net Result: FSBOs makes $1,700 less, all while being on the market 73 days longer, and doing all of the work themselves.

As you can plainly see, there is little to gain by selling your house yourself and it may actually cost you to use a discount broker. Obviously, the differences can be much greater on higher valued homes. And as Benjamin Franklin once wrote, “Beware of little expenses. A small leak will sink a great ship.”

*Note: The majority of home buyers will use a real estate agent because, in part, it doesn’t cost them anything (the seller pays the buyer’s realtor 3% at closing).

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