I thought this was an advice section? And I'm saying this respect to everyone, including you, saltidawg, if you don't have an advice or don't want to comment, just scroll on by. I just don't see why you are compelled to write a post which doesn't help.

To answer the question in your first sentence... why would you? Isn't the point of FSBO that you're doing all the work, so you should benefit? Why not go with the market value and use a Realtor who can handle the sale for you? Same net effect and you won't have all the bother of showing the house, finding answers to questions, etc,

Successful FSBO is doable, hundreds and thousands home owners have sold their houses going this route.

If you are good at staging, marketing, showing, negotiating and closing the transaction, by all means do a FSBO. There is no need to lower the price as the purpose of FSBO is to make commission yourself when buyer pays your house at market price. The challenge is to prepare yourself to expertly perform these steps, it requires effort and knowlege.

Why not search this forum as many have suggested, tons of valuable information available here at your finger tip.

If a buyer needs mortgage for the purchase, the lender decides which appraiser to use.

Some seller's will have an appraisal done to get an idea of the market. It will cost you anywhere between $300 to $450. But, it is not necessary to pay for this. Rather, interview realtors in your market. Let them present you with their sales presentation. There is no obligation, you may decide to use them and you will learn the information you need from their price analysis. There analysis should be close enough for your purposes and free.

As has been pointed out above, selling your own home can be an exercise in frustration. If this is the first time you have sold real estate, it would be best for you to use an agent. There is a lot you don't know. Learn from the process. Once you are more experienced, you may be able to successfully conclude a FSBO. The odds are really against you the first time around.

There is a wealth of information on this website. Get a cup of coffee and spend a few hours reading through some of the old threads. You will be a better consumer for it.

To answer the question in your first sentence... why would you? Isn't the point of FSBO that you're doing all the work, so you should benefit?

Because the seller doesn't decide what someone is willing to pay. I will not pay as much for a FSBO home, I personally assume there is some defect with the house or transaction. I also know that I have fewer legal remedies if there is a problem.

The house is worth what the market will bear, no matter who it listing it.

Thank you all for your comments. Not first time to sell a property, but maybe first time to do FSBO. Looks like appraisal is in order. Thanks again.

In my opinion, FSBO doesn't make sense most of the time, and I don't think how good you are at marketing your home has anything to do with it.

Qualified buyers who are looking for a house contact a realtor. I think most realtors prefer to work with people who are experienced in the nuances of real estate transactions so prefer to work with other realtors, which means fewer qualified buyers will see your property and you will often have less competition for the house.

Even when realtors find your house they are going to ask you to pay their commission, which you should do most times. In the end, most people are saving 3% but take longer to sell and there is some evidence that those sells are typically for less money.

The biggest exception to this rule is when your house is special enough that people who aren't really in the market for a house see it and love it. In these cases you can find people who aren't working with a realtor because they were not in the market for a house.

In my opinion, most FSBO's are a great way to turn an expensive and arduous task into a long, expensive and arduous task.

No. Set the price at market value or slightly undercut the competition to stir interest. You are doing the work. You should reap the benefit of that. If someone wants to offer less, consider it on a case-by-case basis. Don't suggest it.

I have sold FSBO successfully, and no, there was nothing wrong with the home, as suggested above. It was so desirable that I literally heard screeching outside as someone stopped at my sign. I had a signed contract the next day.

No one should assume anything about the home. If it is a desirable home in a desirable area, you don't need a Realtor unless you don't have any idea how to conduct the transaction. You have exactly the same legal remedies available to you whether there is an agent involved or not, yet some people want an agent in the middle between them and the Buyer. It's simply a matter of preference.

Here, you simply provide the Purchase Agreement (we drafted our own), and open up an escrow at a Title company when you get an offer. Buyer does inspection, and you proceed to closing, after any agreements.

You have exactly the same legal remedies available to you whether there is an agent involved or not.

This is simply not true. You can sue all parties involved in a transaction which includes both realtors. By removing realtors from the transaction you are barring recovery from the two parties who are most likely to settle and most likely to actually pay. This is something that will not matter in most situations but when it does, it can matter a great deal. Winning a judgement is not the same thing as getting paid.

A good portion of legal advice isn't about "the law" but is about the procedures of law and the practical application of them. I don't want to start a fight about this or anything but please remember that some of the things said here should really be informed.

You indeed still have the same remedies, as I said. You simply have fewer parties to drag into the lawsuit. So? If the case has merit, then it will win and you can place a lien against any losing party and collect eventually.

Like you say, it will not matter in most situations anyway. Most people don't care about whether they have agents so long as they get the job done, which is to buy (or sell) a particular house, and if they really want to do this, they do not care if the Buyer (or Seller) is FSBO or not, so long as the deal gets done.

The cleaner the deal, the easier, I have found. Your mileage may vary and certainly will if one does not know how to run the transaction.

You indeed still have the same remedies, as I said.

WRONG! Realtors have a different legal duty and a different standard of care than homeowners. It isn't particularly unusual for a realtor to get a judgment while the homeowner doesn't.

You are attempting to move from advice, and the reason for the thread, to an argument over semantics. I think you are trying to say that you have the same cause of action against all parties but even if that was true a cause is not a remedy. A judgment against several persons is a different remedy than a judgment against one.

In addition, to more legal remedies, the threat of litigation puts disclosure pressure on realtors. There is little doubt that sellers tend to hide defects, there is also little doubt that realtors don't want to be responsible for seller non-disclosure and pressure sellers to disclose. Any realtor can tell you stories of sellers trying to wrestle out of disclosures and realtors not letting them.

I have sold FSBO successfully, and no, there was nothing wrong with the home, as suggested above. - No one suggested that. In the end, all that is required for a transactional defect is more risk which FSBO's absolutely have. There is always a reason someone doesn't use a traditional sales method, while that could be because they don't need a realtor, there are other reasons and those reasons create risk for buyers.

It is important to note that I am only trying to add an explanation to something that we know happens. You can agree or disagree with my reasoning but that doesn't change the fact that FSBO's sell for less.

I'm a Realtor and listed my house with me as selling agent. I had a person want to buy the hone unrepresented. I called an agent in my office and told them to represent buyer as buyers agent purely to avoid a conflict of interest and make sure the buyer had representation.

If it was not my house, I would have been fine acting as an intermediary, but from seeing what problems can arise, there is no way I am going to sell my own home to an unrepresented buyer. And I know what must be disclosed and have had years of real estate experience with yearly mandatory legal and ethics training.

Bry, I don't know why you are vehemently arguing this, but go ahead. Maybe the original poster can benefit from a discussion.

I am directly addressing this question by Rich which is whether he should lower the price if selling FSBO. I do not believe this is necessary, based on extensive experience as a buyer and seller, so I'm simply sharing my perspective. Of course, I've sold only in good areas, and neither of us knows what specifics pertain to his home, so our suggestions can only be general ones. Nor do I know his experience or interest level, or the time he has to devote to this. In practice he may create a win-win, where he reaps more than he would have had to reap paying a Realtor and simultaneously, the Buyer gets a slightly better deal too. That's my sweet spot and I like win-win deals.

I'm not clear what you are attempting to say with"A judgment against several persons is a different remedy than a judgment against one.". This makes no sense.A judgement is a judgment and you will collect sooner or later. If you use a Realtor merely because someone else will be dragged into any lawsuit, well, I don't know what to say about that. I prefer to conduct myself honestly and do direct deals and have never been sued. I am indeed correct that you have the same legal remedies regardless of number of parties in a transaction. Sure, Realtors have pressure to be honest, but so do sellers. They are on the hook legally more than any Realtor.

You stated and I quote: "I will not pay as much for a FSBO home, I personally assume there is
some defect with the house or transaction. I also know that I have
fewer legal remedies if there is a problem."

Your assumptions are wrong, though you are free to avoid FSBO houses on your inaccurate assumption if you like, of course. There are not fewer legal remedies. That's simply false. There are fewer parties.

It is a myth that listed homes automatically sell for more than FSBOs, and that is very location-dependent. Most moderately knowledgeable people can do this transaction easily. Perhaps others need the help so they get it, but they are not always getting more money, since the same market forces prevail and they will be giving up a whopping 6-7 percent of the sale to the agent. This can't even be known unless you sold the house twice, once FSBO and once with an agent to determine the difference. If it was automatically true, no sellers would ever go FSBO because they would be throwing money away.

Here is an interesting infographic of a controlled study from here: http://www.realestatedecoded.com/do-real-estate-agents-really-sell-homes-for-13-percent-higher-prices/

NAR Study vs. Madison, Wisconsin Study

This is not to say that no one should ever use a Realtor, of course. Only the person knows his level of knowledge, interest, time, and legal skills to get the job done. There are times it makes sense to sell with an Agent, and I've even done it myself to get a deal done quickly, but because I need no help, I've gone flat-fee and have done very well.

We have an excellent flat fee agent in my jurisdiction. The average Realtor around here has a couple, or maybe 5 listings. This Realtor had 60 last time I checked the site. Obviously, lots of people are interested in doing this half-way option, where you pay a flat fee and then the 3% to the Buyer's side. The service is excellent. I'd recommend this before going full service, unless you actually need full service. Some do, some do not. So much information is available now.

Know yourself. That would be my advice to the Original poster.

MCML: Thanks for posting that link. That stat has always grated on me, for all the reasons mentioned in the article. I'm glad someone finally did a controlled experiment for less misleading results.

Midcentury, you write:

"This can't even be known unless you sold the house twice, once FSBO and once with an agent to determine the difference." And then in the next sentence you post a link to some article that states that they do know the difference w/o selling the same home twice.

I actually agree with you in that there is no scientific, statistically significant way to determine if selling with an agent nets in a higher selling price than does a FSBO.

I am indeed correct that you have the same legal remedies regardless of number of parties in a transaction.

I don't know another way to explain that you are not correct. I went to a pretty good law school and you are simply wrong. You are not even a little bit right. I have personally won a case against a realtor when I didn't have a case against the seller. Just to be clear this was something I could not have sued the seller for, it was only the realtor's standard of care that created the legal obligation. So just stop arguing this.

Now to the price idea.

I never quoted the NAR study because I don't believe it, the numbers are too high. But there are just as many problems with the Madison study, it has a massive selection bias. Their are two reasons that FSBO's would sell for less, (1) they have more asymetric information than traditional sales and (2) they form a second smaller (satelite) market. I have focused on asymetric information because that is the bigger issue for me, but I am comfortable in my assumptions because of the satelite market issue.

The simple issue is that the more people who see your house the more likely you are to see a higher price. All markets work this way, more buyers = more demand = higher price. If the FSBO market violated this every economist on the planet would study it, and it would be the talk in every economics program. The one easy way to defeat this rule is to simply attach your market to the main market. We see this when markets disenfranchise certain groups, a satelite market springs up that gives them access to the main market. This is what Madison has done.

In Madison 1 out of every 6 homes is sold FSBO and they created a central website that simplifies searches. I think it is incredibly likely that realtors already look at the site when conducting home searches, and people looking for homes certainly already search the site.

The NAR study isn't good and the use of it is tragic, but the use of the Madison study isn't any better. Results get normal pretty quick, why didn't they do various smaller areas? Or just more areas? As someone who has research and publishing pressure, I suspect they did but decided against using the data. There is immense publishing pressure in academia, you have six years to meet publishing requirements, and it can be hard to get published. Moreover, this study is important and good but doesn't really say anything about FSBO prices nationally. They have found statistically significant results that have incredibly limited conclusions. This study would never be used to reach a general conclusion on FSBO pricing.

However, it does tell us something almost as alarming (more alarming to me). Above I noted that there are 2 reasons FSBOs should sell for less. The Madison study finds a control for the second reason by finding a market too large to ignore, but also finds that asymetric information isn't priced in. This means that buyers in this study don't find any added value from sellers having a realtor. Now we need to find out how many sales had no agents, if we can find this data then we can isolate the actual value that Madison residents assign to realtors. I am sure they are tryng to find a way to do this.

In deference to this information I should change my statement, and so I will. FSBOs tend to sell for less money in almost every market in the country. Please note, a tendancy is just that, it doesn't mean your house specifically will sell for less but it has a higher probability of it.

An equally interesting question (at least to the seller) is does selling with an agent result in a higher or lower net to the seller then a FSBO sale.

I would expect that FSBO's net near the same amount in one realtor transactions and higher in no realtor transactions. But you have to consider both your time and the marginal costs of longer selling times.

The linked article notes, "By the way, you might think because of all the money to be saved that FSBOs would be a lot more popular with luxury home sellers, but they’re not." We would actually think that cheaper homes are much more likely to FSBO as poorer people are statistically less likely to value their time as high as money, and they have less capacity to make up equity gaps.

By the way, this is further evidence of a defect in the transaction. Having a higher required amount of money means less room for negotiationing repair issues and possible appraisal issues. Some will think this isn't a defect but ut is. It sets a floor based on non market forces.

No, NC, that article (if I recall correctly) said they are basically guessing the difference by an average of the prices in the area, and we all know that averages don't work in real estate because homes are not fungible widgets.

As you say, no one really knows about a particular house because there are SO many variables.

Saltidog brings up an interesting point too. All the Seller cares about is his net. If the FSBO can demonstrate that his deal gets the Seller's increased net (assuming rational, reasonable, and solvent Seller), the FSBO gets the house. You can almost always (with a reasonable seller and buyer) strike a win-win that works for both. Buyer gets slightly lower price, and Seller gets slightly higher net.

Bry, what case did you win against a Realtor, which excluded his principal? Misrepresentation of services? Fraud? Failure of Fiduciary duty? Failure to Disclose? Unauthorized Practice of Law (Realtors can only fill out forms, not draft provisions), Real estate malpractice?. You are being exceedingly vague here as to what case you could win against a Realtor for which the Seller would have no responsibility despite the fact that it is his house and the agent represents the Seller. That's not how agency works. Caveat Emptor is long gone. Of course the Realtor, since he stands for the Seller who may have skipped town is a convenient deep pocket if you have that mentality. Sure, no problem. Just let insurance cover it, and keep increasing the cost to the Seller. No thanks. If you did win a case against some Realtor who failed on some point (having nothing to do with his client or the house, but merely his own incompetence - and that sure happens out there!), then that is all the more reason not to use one, in my view.

It is true that FSBOs generally have a smaller market, only because Buyers have been brainwashed to believe they cannot conduct this transaction without the (6 week course) credentials of a Realtor. So they are artifically kept away and sometimes even literally with nonsense from some Realtor about how unsafe and scary it is to buy FSBO.

And even with the smaller market, that does not necessarily mean a lower price. It depends upon the desirability of the house (hence my squealing sound outside and signed Purchase Agreement 24 hours later, as previously referenced). Some people have amazing houses and they will get buyers. Why everyone isn't doing the FSBOs as Madison is doing is beyond me. That is the way to go. But then I'm a pretty direct, do -it-myself person. When I hire tradesmen, which I do a lot, I go straight to the guy doing the work, not some fancy-schmancy mark up the profit 30-50% big company. Win-win. He makes more money on my job. I get the job at a better price without the markup that is valueless to me. I do this on every trade I can.

I do real estate the same way. And cars, come to think about it. I guess it is a perspective that you won't understand unless you have it. But there are always people out there willing to buy a desirable house however they find it. Realtors attempt to shield Buyers and scare them away from FSBOs. Smart buyers don't go there. They will buy a listed house or an unlisted one, whatever suits them best. Sure it *could* sell for less if you can't get attention from Realtor-represented buyers. Or more. We just don't know about any particular house. But that is the beauty of high quality flat fee service, in my view. Sometimes you just need a method to get past the artificially-imposed "fear" of doing this scary thing of buying or selling a house. Flat fee to the rescue.

Do I understand correctly that someone has suggested that an advantage to hiring a Realtor is the fact that if he/she screws up the seller can sue the Realtor?

This is presumably opposed to the situation where there is no Realtor involved and thus no chance whatsoever for the (non-existent) Realtor to screw up.

Wow!

Salti, I am not sure who you are referring to. But that is not what I said or implied.

In general, there is a price ceiling of similar type of houses in one neighborhood. It is similar to same model of a BMW of same one year, new or pre-owned, could only fetch top dollar of a BMW in its class instead of a Lamborghini, regardless how many potential buyers see the car.

So if a owner knows what s/he is doing, with the help of a competent real estate attorney and a good tile company, why not sell the house FSBO? 6% commission savings is not a pocket change. As at the best a realtor could do is getting the top price in the neighborhood for the same type of house. It is entirely doable for a owner seller.

We did FSBO for our previous house. It did not take long. It was easier than most of the work tasks we encountered in our professions. The house sold higher than other realtors sold in the same neighborhood in that time frame, and was closed so much sooner; as it was easier to complete transaction between seller and owner, instead of injecting two additional realtors.

I believe failed FSBO is due to seller's competency, instead of the approach of FSBO. ,

As a Realtor going on 17 years I will add to the comments on lawsuits with or without a Realtor involved.

No Realtor or attorney involved then who does the wronged party sue? Each other unless the title company or inspector gets dragged into that situation. Sometimes it is hard to get blood out of a turnip.

Realtors involved in a transaction? In our area we are required to carry E&O insurance and I saw 2 lawsuits settled for over 7 figures in a previous office I was in....who paid it? The Realtors E&O Insurance as both were defects the Sellers Realtor should have caught and the Seller paid nothing.

Who has deeper pockets in a lawsuit? Probably Realtors with specific insurance against claims but I am darn sure not advocating using a Realtor for that reason alone.