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Realtor vs FSBO

In the modern real estate market, the question for most sellers is whether to use a realtor or go FSBO. The realtor vs FSBO issue is important since you can save major money going FSBO.

Realtor vs FSBO

Why go FSBO? The biggest upside is that you save thousands of dollars in realtor commissions when you sell your property on your own. This is obvious and it's real.

The downside is that it takes your time to market and show the property.  (You'll need to prepare your property for sale in either case; that's a whole separate topic.)  You also need to be familiar with how the real estate sales process works in your part of the country.  It isn't necessary to be an expert; just understand what things one must generally deal with in a real estate sales transaction. 

Also, it's important to have access to the helpers you need.  Such things as a lender who is willing to qualify your prospective buyers, someone qualified and willing to draw the sales contract, and a person or firm qualified to close your sales transaction are examples.  Fortunately, there are many lenders and settlement offices willing to work directly with the principals to a transaction.  And, for the brave and hopefully, very experienced, there are online, fill in the blank, sales contracts.

What Can Go Wrong?

About a gazillion things.  But this is true if you're working with a broker, too.  A broker is probably more experienced than you, and may well have solved the problem you are encountering several times, but, if you can stay calm and think under stressful conditions, you can be your own problem solver.

A longer list of possible problems from real life are for a later article.  I will include a couple here just to help you size up your willingness to cope on your own.

Problem One   

You have a contract with a buyer, but he/she/they get cold feet.

Solution

Be calm, matter of fact, and pleasant.  Encourage your buyer to open up and tell you what's in the way.  "I don't want you to buy our home if it's not right for you, but you seemed to really like the house (condo/townhouse/whatever), and now you're not sure you should go forward.  What's changed?  What's troubling you?"

If they level with you, you have a shot at helping them overcome their objections and solve their issues.  You may even find they've misunderstood something.  If so, correct information may be all that's needed.

However, if this approach doesn't work, and the buyer no longer wants to buy, let them go and move on.  As long as the buyer wants to buy and the seller wants to sell, most problems can be sorted through.  If one of them changes his mind, it's over.  (You can probably sue for "specific performance" under the contract, but do you really want your property off the market while you deal with that?)

Problem Two

Your buyer has made an inspection by a home inspection firm a contingency of the contract.  The home inspector comes up with a laundry list of items to be repaired or replaced.  Your buyer requests that they all be done prior to settlement.

Solution

Don't let your ego get in the way.  It's not personal.  It's real estate, and big bucks are involved.  Take a deep breath.  Go over the list.  How much money is really needed to make the repairs?  Can you do any of it yourself?  Call a plumber, carpenter, roofer, electrician, or whatever trades you need and get a ballpark idea.  If the result looks reasonable, get closer estimates and agree to have the work done.

If it's too expensive (you priced your home knowing its condition), too time consuming (the trades can't take care of it before scheduled settlement), give it some thought.

If the repairs are too expensive, can you agree to "split the difference?" That is, can you do some items on the list and not do others because (you will explain to your buyer) the home was priced accordingly, but you are willing to compromise if he is.

If there's not enough time to complete the repairs before settlement, can you agree to provide a sum of money to the buyer at settlement with which he can have the repairs made?

Stay calm and thoughtful. The buyer is not your enemy. With any luck you can work out a win/win solution.

Why Use A Realtor?

If the above discussion leaves you feeling insecure instead of alert, thoughtful, and excited, you will probably want a real estate broker to go to work to sell your home for you.

If you have not had much experience buying and selling homes, a realtor may be for you, too.

If you have bought and sold in Virginia (where termites and radon are concerns, for example) and you are now planning to sell the one home you've owned in Colorado (where water and mineral rights might be on the discussion table), it's possible you may want a realtor.

If earning your living provides for you and your family very well, but takes up enormous amounts of your time, ditto.

If you have no notions about how you'd go about marketing your home (the subject of a future article) using the Internet, magazines, newspapers, bulletin boards, brochures, signs, word-of-mouth, etc., a realtor can get you the marketing exposure you need.

The Right Choice?

There is no one right choice when it comes to the realtor vs FSBO debate. Only you can decide what's best for you. Hopefully, this look at the pros and cons has gotten your mental juices flowing nicely. I hope your sale goes smoothly.

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