For Sale By Owner = FSBO
by Craig Goebbel
President & CEO, LoanTek, Inc.

FSBO. It is not really a word, according to my dictionary. Everyone in the real estate industry knows what it means. Selling your home yourself is about one thing, the perception of saving money. Since we all like saving money the FSBO transaction deserves consideration. Let’s take a look at the benefits and the pitfalls.

Seller Motivation and the Tradeoff

The typical FSBO cringes at the thought of paying a commission to a real estate agent for doing nothing but sticking a sign in the ground. In return for saving the commission the seller assumes full responsibility for pricing and marketing the home, showing the house, negotiating a sales price, making certain the buyer can perform, staying within the bounds of the law, and coordinating inspections, title and escrow.

Does it sound like a lot of work? It is. It really, really is!

Is it worth it? Only the seller can make that determination. A pristine property with a great location in a good market at the right price will sell, but everything that a Realtor does will fall on the shoulders of the seller. You must realize even the most routine real estate transactions are complicated and as the song goes “There must be 50 ways” to ruin a routine transaction. Who deals with problems? You do, with the buyer, face-to-face!

The Buyer's Side

Again, the number one motivation for the buyer is saving money. They seek the FSBO because, after all the seller is not paying a commission. Herein lies the fundamental conflict. If you get past the negotiation and an offer is written the buyer has to secure and verify financing, schedule inspections (don’t buy without an inspection) and make certain everything is done before the Purchase & Sale Agreement expires. Does this sound like a lot of work? It is. Who deals with problems? You do, with the seller, face-to-face!

What If a Realtor Brings a Buyer?

What should a FSBO seller do with a Realtor inquiry? Listen to them, they may have a legitimate, credit approved buyer! Should you pay them a commission? This is negotiable between you and the Realtor . For the price of a negotiated commission you are buying the expertise and assistance from an industry professional.

Just remember you are paying a commission to someone representing the buyer! Would you go to court without an attorney and pay for the plaintiff’s attorney? It is virtually the same thing.

© 1999 - 2004 LoanTek

Craig Goebbel is President and CEO of LoanTek.com, mortgage loan brokerage.  He is also producer and host of Real Estate Radio Show, a Seattle-based talk show featuring mortgage and real estate news, interviews and listener calls. It is broadcast on KVI Radio AM 570 in Seattle, Washington. Past show are also webcast via the Internet at http://www.realestateradio.net.

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Real Estate Radio with Goebbel and Gray is the leading real estate radio talk show in the world and is hosted by Real Estate home mortgage expert Craig Goebbel, owner of LoanTek Home Loans and Robb Gray of John L. Scott Real Estate.