Experience with FSBO - Colorado

[Patrick Farley]

I am looking to connect with people who have experience selling home by owner.  This could include pros/cons though we are pretty set on going our own way with this one.  Thanks!

[Steve K.]

Hi Patrick,

I've consulted with FSBO's here in CO (friends who wanted to save by not paying agent's fees who I was happy to guide through the process as a friend). Frankly, in our expensive market the agent's commissions are a lot of money so I don't blame anyone for wanting to sell on their own. From watching how a few of these transactions have played out recently, here's what I'd say are the pro's and con's...

Pros: 

No listing agent fee (may also save some on buyer's agent fees but most buyers will be working with an agent so you may still have to pay their side)

Some people just don't like working with agents and prefer to control the whole process

Cut out the "middleman"

If you already have a buyer, a title company can manage the transaction 

If you have direct real estate experience as an investor, you may know more about the process than even some newer agents do

Cons: 

The financial benefit is often not as great as seller's imagine. I know it sounds like exactly what a listing agent would say, but this is often actually true. Just like hiring a lawyer to represent you in court gets better results than representing yourself, a good listing agent will net seller's more on the sale than they could on their own. It may seem like "houses sell themselves" in this "seller's market" but there is a science to doing it right. If done properly, a listing agent will get you more and earn their commission. They'll do this by exposing the listing to the maximum number of people through their network and through the MLS, listing at the best price to attract the most eyeballs and spark a bidding war, staging/photographing/advertising professionally, and sorting through the multiple offers/countering them to get the best terms and best overall offer (as well as the one most likely to make it to the closing table).

Fees to list on FSBO websites, staging, cleaning, photography etc. that are usually paid for by the listing agent will come out of your pocket. If you're inexperienced and the buyer has an agent, they may also stick you with a lot more of the transaction costs without you ever even realizing it.

In addition to buyer's leads coming in from your advertising, be prepared for 9 out of 10 calls to come from people soliciting you. FSBO's are targets for all kinds of bargain shoppers, wholesalers, agents "wondering if they can help", etc.

It's a lot of work selling a property and not everyone has time to deal with it.

Liability. This one is real. Two of my friends who recently thought it would be easier to buy and sell on their own are currently involved in lawsuits related to those sales. Both are situations that using an agent would have easily avoided. Agents have knowledge and experience to protect you from lawsuits, as well as insurance.   

Hope that helps!