No, no, and no. To be very clear, the answer is NO.
We will start off by issuing a quick apology to our clients, family members, friends and fellow professionals working in the real estate profession. This blog is by no means an attempt to diminish their work. They are a very important and integral part of the real estate system. There are still many situations where a realtor is necessary, but there is no requirement to employ or involve a realtor to buy or sell a home. If you have a unique home or a difficult property to sell, then by all means, a realtor’s assistance is a significant benefit. But for most standard residential homes, why not give yourself a chance to save thousands of dollars.
Examples are always helpful. Not long ago, one of our neighbor was talking about selling his home. We attempted to convince him to give a little experiment a try. We challenged him to list his house for sale by owner “FSBO” for a few weeks, or a month, before listing the house with a realtor, just to see what would happen. He decided to go ahead and list the home with a realtor. The realtor put the sign in the yard at 8:00 a.m., and by 2:00 p.m., they had 3 offers, one for more than the listing price. Let’s say the house sold for $250,000, our neighbor just lost $17,500.
Things have changed a lot since the real estate agencies put a default 7% standard fee to sell a home. 20+ years old you had to rely on a real estate agent to show you houses and to let you know what was available to buy. Now, with a click of the button, you can find multiple free websites that do the exact same thing. Most people do their own browsing online before they even think about buying a new home. The days of needing a full service realtor to sell your home or find a home just are not a reality anymore.
Let’s say you have decided that you like money and want to keep the equity you have earned in your home and want to put your home on the market FSBO. Obviously, you will need a sign in the yard and there are multiple websites where you can also list your home. Once you have done this, you typically will get realtors contacting you asking if they can show your home, for a percentage. What I mean by that is, when a home is listed with a realtor, the selling agent and the buying agent split the 7% commission, if they are not the same person. Therefore, with a FSBO, a realtor will call and ask to show the home to a buyer for 3.5% or half the 7% since there is only a buyer commission and no seller commission. As the homeowner, you can entertain this is you want, by agreeing to the 3.5% or you can counter a different percentage to save yourself even more money. You can also simply decline the offer altogether and wait for someone that is interested in the home without a realtor.
Now you have your home FSBO and someone makes you an offer. You can accept, decline or counter-offer. Once you have an accepted offer, there isn’t much left to do. Depending on the agreement, you may have to fix a few things, clean, possibly have an inspection done. You will need to find your abstract, have it updated and sent to the buyers for review. You will need to bring three documents to the buyer, Deed, Ground Water Hazard Statement and a Declaration of Value. Typically, you would need to hire an attorney for the preparation of those documents for a flat fee at a fraction of the cost of a full-service realtor. The buyer, or the representative, will be the one required to actually close the deal. The buyer may have a few things to sign, but other than that, you just sold your home for sale by owner.
For Sale By Owner is easier than the real estate world would like people to believe. Feel free to reach out to Jim Sayre here at GRL Law for more information on the process and costs associated with FSBO. Thousands of dollars saved today can mean tens of thousands of dollars in your future.