For Sale by Owner
FSBO Costs
Selling a home without a real estate agent can save you many thousands of dollars in sales fees. However, there are many costs associated with selling a home that an agent usually covers in their commission. Also, the time involved in selling a home without an agent is transferred to the FSBO seller.
Both the time put in to selling a home by FSBO and the money involved are significant.
The costs involved in selling a home without using a real estate agent follow:
Determining the sales price of the property. This can done by the seller using comparable recent sales prices of similar properties in the area, and adjusting it to the property being sold, or by a professional appraiser (from $350 and up)
Writing a sales contract. Boilerplate contracts can be purchased, or may be free on the internet. Also, you can get a real estate attorney to write the sales contract for you. (from $200 and up)
MLS listing. You can purchase a listing on the MLS (Multiple Listing Service) from some real estate agents. Agents are the only ones who can list on the MLS. Using this option, you must specify a commission amount you will give to a real estate agent bringing you a buyer. ($200 to $500 for the MLS service plus a commission of usually 2% to 3% of the final sales price.)
Advertising the property. Advertising can take many forms, and the costs vary widely. Several websites will list a home from no cost (like Craiglist), to Ebay (which charges up to $300 for fixed period listing.) Advertising materials, such as "For Sale" signs in front of the property and around the neighborhood, brochures and pictures of the home, classified advertising in newspapers and real estate magazines. ($50 to $2,000 is typical)
Home inspection. Having a professional home inspection is recommended for most FSBO sellers. First, most buyers will hire a professional home inspector to find defects and deficiencies in the home they are considering purchasing. Secondly, a seller is liable for major deficiencies in the home they are selling that they know about or should know about. Having a home inspection gives the seller guidance on what a buyer will find in the home, and offer the seller a chance to repair any deficiencies before offering the home for sale. ($200 to $500)
Surveying the property. Surveying is sometimes important to define the exact scope of the property being sold. Usually, you can find this information in a local tax office, and for a small fee can get a copy of the property boundaries. ($15 to $200 and up)
Holding an open house. Most real estate agents will hold at least one open house to let prospective buyers and other real estate agents look at the home in a small period of time. Cost involved in holding an open house are advertising the time of the open house, and preparing the house for visitors. (free to $100)
Staging. Staging involves everything necessary to prepare the property for being sold. This involves cleaning, repairing, possibly remodeling, landscaping, painting, installing new appliances, lighting, and carpeting, and arranging the contents of the home in a pleasing way. Many times, this also involves renting storage space to store personal effects and furniture, to make the home look larger and more appealing to a potential buyer. This could also involve renting furniture and other items to make the home look more appealing. Cost for a FSBO seller can range from nothing, to several thousands of dollars. The time involved can also range from no time at all to several months of preparation. an FSBO seller can also hire a real estate agent or professional stager for advice. (free to several thousands of dollars)
Assessing the buyer's financing. It is important to know that after a potential buyer signs a contract to buy your home, that they have the means to pay for their purchase. You can either investigate their financing, or hire someone to do it for you. (free to $300)
Financing. Sometimes, an FSBO involves the seller financing all or part of the purchase price. Besides assessing the buyer's financing and financial situation, there are costs involved in writing and registering a finance contract. ($50 to $1,650)
Home warranty. Many homes, both new and old, are being sold with a home warranty. The purpose of the warranty is to reduce the risk to the buyer of unexpected repair costs. This warranty is an insurance contract, usually covering major systems in the home. This can include the roof, HVAC, appliances, electrical systems and more. Sometimes, this cost is borne by the buyer. ($300 to $800)
Closing attorney. A closing attorney is almost always necessary to
prepare documents for selling the home, and handle the financial transactions involved between the buyer, seller, financier, and government agencies. The cost can be paid by the buyer, seller, or split between the two. ($200 to $600)
Negotiating with the buyer. Negotiating with the buyer is usually directly between the FSBO seller and the buyer or their agent. However, you can hire an attorney or real estate agent to help you negotiate both the sales price and all the contract details. (free to $300)