Selling FSBO? You Must Hate Money

I've read a few posts on BP where the seller is contemplating selling their home For Sale by Owner (FSBO). While I'm all about saving money, selling FSBO is often NOT going to get you the most money on your home sale!

Here is the logic:

According to NAR, 87% of buyers have an agent and those agents are typically not going to show a FSBO home to their buyers (they need to make a commission), so the 13% of unrepresented buyers are your target.

FSBO does not have the same marketing reach as an MLS listing - in that FSBO can post on Zillow and some other sites, but misses out on brokerage sites, realtor.com, etc.

As an example, if the FSBO sites account for 40% of all real estate traffic, and your target market is 13% of buyers, you have effectively reduced your potential audience to 5% of all buyers (100 * .4 * .13).

A better way to proceed is to get a flat fee MLS listing, where you pay an upfront fee (we do this in California for $95) to an agent to place your home on the MLS. 

You can also offer a commission to the buyer agents via the MLS - this is smart because you may very well get a buyer who is willing to make an offer high enough that it covers the money paid to their agent. Buyer agents typically just want to get a deal done and are not concerned with how much their buyer pays (the agent usually makes more when the buyer pays more!). 

If the above doesn't happen, just accept an offer from an unrepresented buyer. The most important thing is that by listing on the MLS you got the mass market exposure, so you know that you didn't leave money on the table due to a buyer (who would have paid more) not being aware that your home was for sale.