FSBO or For Sale By Owner is an option many sellers in NYC choose when they try to avoid the 6% agent commission. However, in doing so, they have to take over a lot of responsibilities of a broker and have to make do without a broker’s experience. Regardless of its challenges and benefits, FSBO is not the right option for everyone. In order to determine whether it’s the right option for you, it’s important to understand what the process entails.
The FSBO Cost Saving
Saving roughly 6% of the amount your home sells for is the main reason most NYC sellers don’t hire a broker, but it’s important to understand that you rarely get to save 6%. Remember that the 6% commission is split between the seller and the buyer’s agent. And even if you don’t want to get a listing agent, most buyers in NYC will most likely have an agent representing them (since they don’t have to pay the commission, you do). And if you want to reach as many buyers as you can, you have to work with the ones represented by an agent. This may require you to pay their agent’s commission, so your 6% cost-saving only remains at 3%.
Next, there are costs associated with professional photographers (for online listings and show sheets) and any other marketing costs you pay to sell your home including staging or creating a website to sell your home (it happens!). These costs, collectively, may not even add up to 1% of the price, but they can still reduce your remaining 3% cost saving by a sizable margin.
The FSBO Responsibilities
Making a successful FSBO sale requires you to do everything your agent would have done to sell your apartment. Now, it’s important to remember that not all real estate agents/brokers are equally competent, experienced, knowledgeable, or diligent, which is why researching the right agent is so important. But if you are going the FSBO route because your past experience with a mediocre or subpar agent led you to the conclusion that you might achieve similar results without one (while saving a lot of money), you should consider working with a better agent instead of choosing FSBO.
As a FSBO seller, you will have to take on the following responsibilities or replicate the following traits of an agent:
Experience and Knowledge: You can’t gain an agent’s experience, but you will have to accumulate the relevant knowledge, especially to set the right price for your property. The best way to do it is by identifying comparable properties (or comps) and finding out how much they sold for. A simple rule for comps is that the closer in proximity, more similar, and recent a sale is to yours, the better. The higher the differences, the more you will have to adjust your price to make it optimal. It’s important to try and be objective when pricing your property and don’t price it based on your emotional attachment.
Fielding The Calls: When you sell FSBO, you will have to take on all the calls from buyers or buyer’s agents, which is usually something your agent does. If you have a flexible work situation or a forgiving routine, it’s an easy enough task. If not, you may get annoyed, or if you only receive calls at certain hours of the day, you may lose some potential buyers. In addition, you will most likely get a significant amount of calls from brokers who are trying to list your apartment. That in itself can get pretty frustrating.
Hosting The Open House: From staging and actually hosting an open house, an agent may take a lot of things off your plate. But in a FSBO situation, you will have to host the open house. This is a serious time commitment, and if you are only available on weekends, you may lose a few prospective buyers.
Listing Your Home: This is an important service an agent provides. From professional photographs to writing the perfect description, creating a listing is the agent’s responsibility. They also have access to an MLS (Multiple Listing Service) . Your listing is where most buyers or buyer’s agents will get exposure to your property. As an FSBO seller, you have some options for listing your home on an MLS and websites like StreetEasy, which offers the listing service for a flat fee.
Negotiating With The Buyer: As an FSBO seller, you will have to receive and assess all the offers. If you have multiple good offers, you can initiate a best and final offer process but make sure you are familiar with its best practices and what you can and cannot disclose to potential buyers that are bidding for your property. You will also have to negotiate with buyers and buyers agents that might be more experienced in this process compared to you when they try to offer you a lower price.
You will need an attorney when you are closing to draw up the paperwork and ensure all the necessary legalities of the process are observed. The scope of an attorney’s involvement may be slightly higher when an agent is not present but may not shift the bottom line too much.
If you have the time, will, knowledge, and temperament to handle all these responsibilities and you are willing to learn whatever you need to for a successful FSBO, it’s the right option for you. But if you are not confident about handling the work involved in an FSBO sale, then having an agent handle it for you might be the right approach for you.
Tips For A Successful FSBO Sale
- Do your research. The more you know about selling your apartment and the market, the better your FSBO decision might be.
- Be prepared to pay the buyer’s agent’s commission, or you will be left with a very small pool of potential buyers.
- Create a great listing, ideally with professional photographs of your staged property. Convey all the necessary information and strengths in an objective tone. Read it from a buyer’s perspective before publishing.
- Cast a wide net. The more potential buyers you attract with your listings, the higher your chances of selling at your ideal price.
- You should be easy to reach and communicate everything clearly to potential buyers.
- Keep your property in great shape, clean, and well-organized, so you can accommodate potential buyer visits virtually any time.
- Give people space during an open house and don’t hover. Answer their questions clearly and precisely. Highlight your property’s strengths (when appropriate) but do not repeat the same generic list to all buyers. Get a feel of what they are looking for and convey the relevant information.