For Sale By Owner (FSBO) vs Low Commission Realtor: Pros & Cons
For Sale By Owner or FSBO is an option for sellers looking to save on commission fees. We've compared FSBO vs 1.5% Commission Brokerage so you can decide if going it alone is worth it.
FSBO (For Sale By Owner)
People usually go the For-Sale-By-Owner route for one reason: to avoid a real estate agent’s 3% commission fee. Going FSBO can save you thousands of dollars, but it’s easier said than done. You, alone, are responsible for the entire selling process. That means that you handle the pricing, staging, photographing, marketing, and showing of your home. Once you find your buyer, it’s up to you to negotiate the home’s ultimate price and to handle the complex stack of legal documents throughout the closing process.
It’s a daunting undertaking that real estate agents take years to perfect, and you’ll be learning on the fly. Faulty home pricing, unflattering photography, and flimsy negotiating skills can all drive the final sale price down leaving money on the table. Also, without paying extra to get your home on exclusive real estate platforms, you’ll likely rely on Zillow as your primary option for online marketing. This can lead to fewer interested buyers, which often means—you guessed it—a lower sale price. For all these reasons, FSBOs tend to sell for less money. In 2019 these properties sold for an average of $80,000 less, and usually stayed on the market for over two months longer than homes represented by an agent. This helps explain why, of the over 40% of home-sellers who express interest in selling their home FSBO, only 8% go through with it.
If you are extremely diligent, you can be the exception to the rule. However, many who go the FSBO route find themselves overstressed and underpaid for their hard work, especially after they’ve covered the 3% commission owed to the buyer’s agent.
This seller-friendly approach allows real estate agents to charge lower fees while still providing the services of a traditional real estate broker. These agents set the price of your home, help you stage it, market it, show it, and then handle the final price negotiations and closing—all for a fraction of the conventional cost. Felix Homes, for instance, will handle everything from list to close for a discounted commission of just 1.5%. This provides sellers with the typical realtor experience while saving them thousands of dollars.
How do they pull this off? Well, first discount realtors find ways to work smarter. Low-commission agents tend to favor a more tech-savvy approach to home-selling. For example, while traditional realtors may be content to just list properties on the MLS, Felix Homes combines conventional promotions with targeted social media marketing. Felix has also developed our own proprietary search platform where clients can easily post and view local properties. This connects buyers and sellers quickly and inexpensively, which is one of the reasons why Felix charges just 3% commission, total, when we facilitate the entire transaction on behalf of the buyer and the seller.
The second factor that allows discount real estate brokers to offer such low fees is volume: they simply sell a lot of properties per agent. While a traditional real estate agent may oversee 12-15 transactions a year, the technology edge helps low-commission agents to successfully complete as many as 5-7 transactions per month. Better efficiency leads to more sales, which leads to more money in the pockets of the seller and the low-commission realtor. Faster sales and lower fees without sacrificing service? It’s no wonder why sellers are steering clear of FSBOs, and maximizing profit with low-commission realtors.
At Felix Homes, we strive for more sales and more savings, which is why we believe that our low-commission model is the most financially responsible way to sell a house. If you live in the Nashville area and want more information on how you can sell and save, give us a call at 615-422-4277, or send us an email at firstname.lastname@example.org.
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