FSBO Tips
23/03/10 16:28 Filed in: Real Estate
Home sellers may be forgiven wondering why they must pay 6% in real estate sales commissions, and some homeowners now choose to leverage the power of the internet to sell their own homes. If you’re thinking about a for-sale-by-owner transaction, for god’s sake get a lawyer to handle the paperwork for you. You’ll still save a bundle on commissions, but also have some peace of mind that the transaction was well executed.
FSBO is not a good idea for everyone, but for some motivated, well-informed sellers, it’s an option. Our firm assists these kinds of sellers in getting their homes sold with good contracts and smooth closings – and with minimal expense compared to traditional 6% commission transactions.
An anecdote:
I purchased a home in Virginia in 1994 that nearly tripled in value by 2006, with most of the increase occurring in the 2003-2006 time frame. Had I sold the house in early 2003, I would have paid about $15,000 in sales commissions upon sale. Since I sold in 2006, however, I paid over $41,000 in sales commissions. Furthermore, the real estate agent that I hired in arguably did less to sell the home in 2006 – the house sold in two weeks just as the white-hot market had started to cool just a bit. Had I sold even two months earlier, the house would probably have been in a bidding war.
My point here is not to begrudge real estate agents their due, merely to point out that the agents in my case saw a huge increase in their commissions owing not to intrinsic effort but to inflated market prices. Fair enough – I benefited too! I was too busy running a construction firm in 2006 to handle my own sale, so I valued the efforts of the realtors who handled the transaction. However, it’s understandable that someone might look for alternatives to paying $41,000 in commissions.
In FSBO transactions, the fees to have this law firm handle the contract, documents, and closing range from $500-$2,000, depending on what level of service we provide (including on-site inspection of the property). That’s a small fraction of what sales agent commissions would be for most in-town properties in Austin.
Since at this firm we see the fallout from real estate transactions gone awry, I can assure you that getting the transaction right upfront is a tremendous money-saver.
FSBO is not a good idea for everyone, but for some motivated, well-informed sellers, it’s an option. Our firm assists these kinds of sellers in getting their homes sold with good contracts and smooth closings – and with minimal expense compared to traditional 6% commission transactions.
An anecdote:
I purchased a home in Virginia in 1994 that nearly tripled in value by 2006, with most of the increase occurring in the 2003-2006 time frame. Had I sold the house in early 2003, I would have paid about $15,000 in sales commissions upon sale. Since I sold in 2006, however, I paid over $41,000 in sales commissions. Furthermore, the real estate agent that I hired in arguably did less to sell the home in 2006 – the house sold in two weeks just as the white-hot market had started to cool just a bit. Had I sold even two months earlier, the house would probably have been in a bidding war.
My point here is not to begrudge real estate agents their due, merely to point out that the agents in my case saw a huge increase in their commissions owing not to intrinsic effort but to inflated market prices. Fair enough – I benefited too! I was too busy running a construction firm in 2006 to handle my own sale, so I valued the efforts of the realtors who handled the transaction. However, it’s understandable that someone might look for alternatives to paying $41,000 in commissions.
In FSBO transactions, the fees to have this law firm handle the contract, documents, and closing range from $500-$2,000, depending on what level of service we provide (including on-site inspection of the property). That’s a small fraction of what sales agent commissions would be for most in-town properties in Austin.
Since at this firm we see the fallout from real estate transactions gone awry, I can assure you that getting the transaction right upfront is a tremendous money-saver.
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