Some Madison-area homeowners are deciding to market their units themselves so they can cut out the largest expense in traditional home-selling: the real estate agent's commission, typically 6% to 7% of a house's sale price. At least 1,500 homes were sold without the help of Realtors in 2006, according to FSBOMadison.com.
But forgoing the help of an agent isn't the solution for everyone, and it doesn't always result in net savings. According to FSBO Madison's own records, about 25% of its clients don't sell their houses as a result of listing on the site. "Realtors sell a good percentage of those houses," says Jan Byrne, training director at Restaino Bunbury. "Usually, these owners tell us that they're not getting the kind of activity they want."
Even if you succeed in selling your home independently, all the money you would otherwise spend on an agent won't end up in your pocket. Typical FSBO costs include listing your home on a real estate Web site ($150 to $550), fliers, newspaper ads, attorney fees (at least $500 for flat-fee services), a professional property assessment ($300 to $400) and third-party title and negotiation assistance ($600 from one of the service providers we consulted).
If you accept a bid from a buyer using a real estate agent, you may also be responsible for the agent's 2% to 3% commission. Despite this added cost, Byrne says she is seeing more FSBO sellers who are willing to work with buyer's agents. "What we do is provide kind of a distance between emotions and business," she says. If there's a problem, "the seller doesn't have to worry about my buyer coming back on him. My buyer's going to come back on me."
Then there's the issue of time spent showing the property and negotiating offers. Amy Gannaway, who sold her downtown condo without an agent last summer, rushed home from work several times to show the unit to prospective buyers who never showed up. After it was on the market for six weeks, she lowered her asking price by $5,000. About selling without an agent, she says, "I don't know if I'd do it again, because it's just kind of a pain."