Realtor or FSBO

Here is the age ol' real estate question, "can you sell it on your own?"

I think one of the main reasons people shy away is the negotiating stage of selling the home. That's understandable but if anyone has the backbone to go out on their own to sell their house, they probably have the smarts to balk at an insulting offer. If you are really intimidated by the thought of handling the process of negotiating and meeting with prospective buyers, it probably isn't a good idea from the start.

On the flip side, if I am comfortable with that and I decide tomorrow to sell my house what do I need to do.

My first step would be to get an idea of the market. I can use Web sites like zillow.com to identify recent area home sales, visit open houses locally to see what comparable homes are selling for, and even meet with some local Realtors to get their take. After a little leg work, you should roughly have a $10,000-$15,000 window to work with.

Let's say for the sake of argument that we determine the range to be $495,000 to $505,000, which hits the easy to work with midpoint of $500,000. Now considering that is a competitive number, we will be very happy to receive our listing price and net $470,000 after paying $30,000 for commissions to realtors -- if we list with a realtor our price is less 6% (3% for listing agent and 3% for buying agent). Now that being said, wouldn't listing the house at $490,000 on your own make sense?

Every Realtor blog I ever read says "it is all about price!" so why do they matter? If we low-ball the market and list competitively aren't we set to win?

Here in lie the problems: 1) Many Realtors don't like dealing with FSBOs because they will not be making the deal with a realtor 2) Buying Realtors are not guaranteed a commission. They will either have to arrange commission with their client or with the seller. Likely they will ask the seller if they will honor a 3% commission if their client makes an offer. 3) These two combined reasons lead to less foot traffic to your home as Realtors may choose to shy away...

But with the Internet and flat fee prices for MLS listings for roughly $500, the ability to post your home on free classifieds like Craiglist, and online marketing tools for everything from virtual tours to newsletters, to forums and blogs -- aren't home owners going to get more comfortable going "FSBO" than ever?

I suppose only time will tell but I plan to talk about in upcoming posts...