A Guide to Selling Your Home Yourself - RedFin, FSBO and More
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Helpful Links
- Redfin Flat Fee Broker Service
Redfin.com offers a searchable database of real estate listings in the Los Angeles, Orange County, San Diego, San Francisco and Seattle areas. Find, buy and sell real estate at Redfin. - Owners.com - Homes For Sale By Owner (FSBO)
Homes For Sale By Owner. The Largest FSBO Home Selling and Home Buying Real Estate Website - For Sale By Owner (FSBO)
For Sale By Owner.com helps a FSBO seller sell a house, apartment, condo, or land fast with low cost, flat fee listings at MLS, yard signs, selling guides, low mortgage rates, advertising, appraisal, and title; List with no real estate agent and save
A Dynamic Market Brings Opportunity
One of the great things about real estate is that in a world of corporate monopolies, the real estate industry keeps a dynamic market churning with endless choices for buyers, sellers and investors. Among the options is the opportunity to sell your home yourself without the help of a full service broker
While over 80% of homeowners use the services of a real estate professional to sell their property, many are opting for non-traditional ways to sell their home. The motivation for do-it-yourself sellers is to save on commission fees which average between 5-7% across the nation.
There are of course many advantages to using a full service broker. They tend to be specialized in the types of properties they sell, knowledgeable about the specific regional market and up-to-date on real estate laws which vary significantly state to state. They also handle marketing, promotion and negotiations.
However, if you are willing to do the legwork, there’s no reason you can’t sell your home yourself. Plus, the past decade has seen a rise in the number of limited service brokers and real estate marketing companies offering flat fee services to do-it-yourself sellers.
Is FSBO right for you?
The acronym for a “for sale by owner” property is FSBO. If you are considering selling your property as a FSBO you’ll want to weigh all the pros and cons and decide if it’s right for you.
You want to retain the equity in your home but the FSBO choice comes with some trade-offs. In economics there are always opportunity costs (i.e. time equals money) and these apply to FSBO endeavors. In exchange for saving on commissions you are going to spend your own time selling your property.
While many of the FSBO support service companies promote how easy it is to sell your own home their claims derive from a desire for your business. The truth is that most people hire a broker because there is considerable time and effort involved in selling a property. Selling a home can be simple, but it can also be a complicated legal transaction.
That’s not to say that FSBO is not worth the effort, after all you are pursuing a considerable amount of savings and many people are capable of selling their home on their own. It’s really a matter of personal preference.
You don’t need superhuman powers to sell your home yourself but you do need to have a bit of energy reserved for the task. If you’ve got a lot to manage with regular day to day stuff or if you’re under stress to sell, you are probably better off hiring a full service broker.
It does take some mettle to sell on your own but the potential savings of FSBO are enticing. If you’ve got the time and the right mindset then by all means give it a try. Most FSBO services are short term and have opt out clauses so the commitment is minimal.That means you can hire a full service realtor if you feel overwhelmed.
Get informed about the FSBO resources available. Evaluate the different FSBO services thoroughly and choose the one that best fits your needs. A summary below outlines the services for sellers from the top three FSBO companies.
If you do try selling your home on your own or with the help of a FSBO service, it's a good idea to consult a real-estate attorney to draft or review contracts, answer legal questions, prepare closing documents and represent you at closing.
Questions to consider when evaluating a FSBO service:
- Find out where the property will be listed: MLS? Realtor.com? company website?
- Who writes the listing? (Homeowner or FSBO service)
- Who takes photos?
- Who sets the price? Does the FSBO service offer valuation tools?
- Who fields calls, offers and negotiations?
- Who coordinates the closing?
- Who handles contingencies, for instance if radon is found upon inspection?
- Are “For Sale” signs included in the package?
- Is a lockbox included so that buyers with agents may access the property?
- How are the fees determined? Per service or comprehensive flat fee?
- Is there a local affiliate agent to assist you with questions? What is their fee?
ForSaleByOwner.com, Owners.com and RedFin
ForSaleByOwner.com
One of the most popular FSBO services is ForSaleByOwner.com, a nationwide real estate marketing company in operation since 1997.
ForSaleByOwner.com is not a real estate broker. Instead, they have developed real estate marketing packages and flat fee services for homeowners to purchase and use themselves.
The packages are based on traditional marketing but offer owners the opportunity to choose services based on a fixed price rather than a percentage of the property’s sale price.
Marketing packages offered by ForSaleByOwner.com range in price from $89.95 per month to an $899 one time flat rate package.
Pros (ForSaleByOwner.com):
- Internet listing on ForSaleByOwner.com (depends on package)
- Internet listing on Realtor.com (depens on package)
- Internet listing on Multiple Listing Service (MLS) (depends on package)
- National internet exposure with page view tracking
- Services available in all 50 states
- Yard and directional signs available (depends on package)
- Legal forms available (for a per-document fee)
- Local affiliate agents available (for a fee or commission)
- Buyer broker offered standard fee (incentive for showings)
- Satisfaction guarantee refund up to $1,500 if property does not sell
- How-to-guide included
- Consulting line available
Cons (ForSaleByOwner.com):
- Not a broker, ForSaleByOwner is a real estate marketing company
- Limited to internet, doesn’t include newspaper or direct mailing ads
- General information in how-to guides, doesn’t cover state specific laws
- Personal service limited
- Owner must review listing
- Owner must determine listing price
- Owner must handle inquiries, open houses, showings, negotiations
- Owner must coordinate closing
- Doesn’t include a “lockbox” - limits property availability to buyer brokers
- Per service fees can add up
Owners.com
Owners.com is among the most popular FSBO marketing services. Started in 1995, it is among the pioneers of the FSBO real estate marketing industry. Like ForSaleByOwner.com, Owners.com is not a brokerage firm but a marketing company.
Owners.com offers homeowners the choice of three seller packages all with one-time fees starting at $49.95 for the Basic package, $79.95 for the Premium and $179.95 for the Deluxe. The company offers a flat fee of $377 for a six month MLS listing that can be renewed at a discounted price.
The Owners.com services are similar to ForSaleByOwner.com but more streamlined and straightforward. Services at Owners.com that differ from their competitor include a virtual tour by a professional photographer and a 24-hour personalized answering service.
Pros (Owners.com):
- Internet listing on Owners.com (depends on package)
- Internet listing on Realtor.com (depends on package)
- Internet listing on Multiple Listing Service (MLS) (additional flat fee)
- National internet exposure with page view tracking
- Services available in all 50 states
- Yard sign available (depends on package)
- Legal forms available (for a per-document fee)
- Local affiliate agents available (for a fee or commission)
- Buyer broker offered standard fee (incentive for showings)
- Satisfaction guarantee refund for MLS listing
- Consulting line available
- Straightforward services
Cons (Owners.com):
- Not a broker, Owners.com is a real estate marketing company
- Limited to internet, doesn’t include newspaper or direct mailing ads
- General information in how-to guides, doesn’t cover state specific laws
- Personal service limited
- Owner must review listing
- Owner must determine listing price
- Owner must handle inquiries, open houses, showings, negotiations
- Owner must coordinate closing
- Doesn’t include a “lockbox” - limits property availability to buyer brokers
RedFin
RedFin is an online real estate brokerage firm that offers simple fee services comparable to a full service broker. The fact that RedFin is a brokerage firm distinguishes it from ForSaleByOwner.com and Owner.com and elevates the level of services available.
At current, RedFin is only available on the West coast in Seattle, San Francisco, Los Angeles, Orange County and San Diego. The company will be expanding into Boston, Washington D.C. and Chicago in the near future.
RedFin offers a seller services program for an upfront flat fee of $2,000 or a flat fee of $3,000 at closing. Included in RedFin’s services are listing on the MLS, yard sign, lockbox and assistance from a real estate professional with negotiations and closing.
With RedFin’s services, homeowners have personal support from a real estate agent. The company, rather than the homeowner, is the point of contact for offers and negotiations. The inclusion of a “lockbox” in RedFin’s listing services allows buyers working with an agent to access to the property without the homeowner present.
The homeowner is responsible for pricing the property, hosting open houses and showing the property to unrepresented buyers. RedFin offers sellers a comparable market analysis based on data from the local market but the homeowner decides the listing price.
Pros (RedFin):
- RedFin is a real estate brokerage firm
- Local seller agent included
- Comparative market analysis included
- Internet listing on Realtor.com included
- Internet listing on Multiple Listing Service (MLS) included
- Yard and directional signs available included
- Lockbox included
- Buyer broker offered standard fee (incentive for showings)
- Satisfaction guarantee 100% refund even if property sells
- RedFin agent reviews listing
- RedFin agent handles inquiries, offers and negotiations
- RedFin agent coordinates closing
- RedFin agent support available handling contingencies
Cons (RedFin):
- Only on West coast at present
- Owner must determine listing price
- Owner must host open houses and non-represented buyer showings
Resources: www.forsalebyowner.com, www.owners.com, www.redfin.com
*Note: The information in this article is general advice and not meant as a substitute for personal guidance from a financial advisor, real estate professional or legal counsel. Although the author is a licensed realtor, the advice given in this article does not constitute any client contract or agreement between the author and the user. The author is not responsible for any losses, damages or claims that may result from your decisions.
Private Sale Partners is a revolutionary new home selling system designed to be better for homeowners selling their home privately and better for Buyers looking to purchase a home.
www.choicea.com should likely have been on this list. they are emerging from the pacific NW, free service.
Good article, as a Realtor, I love the new FSBO companies because I can track down the FSBO's on the Internet vs. driving around looking for the signs, (I do that also) Your stats are right on, about 8 out 10 end up listing. I am happy with picking up 3 out 10. For sale by owners are the best sourse of prospects for an agent. I know several Brokers around the country that are developing a FSBO department as a menu of services. It looks like your right on. Thanks for your article. "Expect the Best" Mike
I agree, these companies are providing a great service to home sellers. However, don’t forget that many Real Estate Professionals offering Flat Fee services are not associated with one of the above referenced companies. Sometimes the Home Seller still wants the personal service of someone familiar with their area to help them list/sell their home. Generally when a home seller seeks the service of a flat fee MLS listing, they are still intending to do the majority of the marketing of their home on their own. According to Wikipedia, “The net effect is to make the real estate industry's standard MLS available as a marketing tool to house sellers without the necessity of the seller purchasing a package of other services from the real estate agent.”When it comes to Real Estate Professionals offering Flat Fee services, it should not be an either/or it should be an “and”. You are offering options to the home seller. "Flat Fee" no longer refers only to MLS listings alone. Some RE Pros offer full service packages for a set price instead of a percentage. The possibilities are endless. There are, just as there should be, just as many Real Estate options as there are people. Everyone wants and/or needs something different. By connecting home sellers with someone that can provide personal service and help determine the needs of individual by offering various types of products and services; we establish trust and expectation in the Real Estate system.
Do not use FSFBOsupport.com. They charged $300 for an MLS listing, took 2 weeks to determine that they could not provide one at my zip code, agreed to refund the fee and never did. I have been arguing with them for 3 months, during which they sporadically agree to provide the refund, but have yet to do so. Their customer service has been awful and they charged for a service that they failed to provide.
When we sold our house we used a local mortgage broker to screen calls and pre approve potential buyers. It helped to weed out the unqualified buyers and the "lookers"
we also used this guide to help us get our house ina presentable condition http://www.dseventures.com/fsbotips
As a mortgage broker and a licensed Broker and Owner of a Lethbridge real estate company, I have seen many FSBO companies come and go over the years. The bottomline is that they are not operated by people with any real estate experience, they cannot legally offer any real estate advice, and have no vested interest in your home selling.
Unfortunately they are in the business of selling plastic signs and blank contracts, not selling houses. The success rate of FSBO companies nationwide is currently at 9%. That means 9% of the people who pay money to these people sell their home this way. Pathetic result by any measure.
FSBO companies are one the biggest scams out there, taking money from homeowners without producing results. If your daddy never taught you let me repeat, you get what you pay for!
For sale by owners are typically overpriced, and can be difficult to work with but occasionally they underprice it by a lot and it makes for a great deal. It takes some work to find them though, so you need to be really patient.
Get FSBO coupon here - http://indigotwigreview.com/2010/04/fsbo-coupon/
With the weakened economy the quick money that FSBO marketing companies once thrived on is gone. Sellers know it takes more than a yard sign to sell a house now.
William 5 years ago
Great Article. It's nice to see people writting about for sale by owner. We are Canada's largest FSBO company ( www.bytheowner.com ) and there are not as many writters that cover FSBO in Canada as there are in the US.