St Louis Real Estate

If you're considering putting your home on the market, be it on the St. Louis real estate market or another, one of the options available to you is to attempt to sell your home For Sale By Owner (FSBO).  This article is intended to be a honest and forthright examination of this option.  Therefore, I'm going to examine both the advantages and the disadvantages of attempting to sell your home FSBO. 

As mentioned on the first page of our seller's information section, selling your home FSBO has one major advantage.  That is, you can save a lot of money!  If you price your house right and make it available to the market, there is a good chance that you will find a buyer.  The biggest question is how long it will take.  This is a question of the marketing of your home.  Who can do a better job of it, you on your own or a Realtor?  I'll make the argument below that the Realtor has some distinct advantages and the question for you to consider is, are these advantages worth paying the Realtor the commission for?

The fact of the matter is that by being for sale by owner, you are only marketing to somewhere between 15% and 25% of the total market.  This is due to the fact that Realtors still pretty much have a monopoly on the buyers.  It doesn't cost the buyer anything to work with an agent who can walk them through the process and do a lot of the leg work for them.  Realtors also have the MLS system which contains all of the houses that are currently listed by Realtors.  In the St. Louis real estate market, about 95% of homes on the market are listed by St. Louis Realtors.

While with the internet and such websites as Zillow and Craigslist, it's easier for potential buyers to do their own research and find homes that aren't currently listed with a Realtor, the FSBO market is still very fictionalized, making it difficult for that potential buyer to find your home.  Not impossible, just more difficult. 

Your biggest tool as a FSBO is your yard sign.  Even with buyers who are coming from out of town, most still end up driving the neighborhoods that they are interested in.  If they are looking in your neighborhood, find your house attractive and see that it's on the market, many potential buyers will call from the sign. 

Why did I say "many potential buyer's will call"?  Because a fair number of potential buyers are uncertain about dealing with an owner directly.  Many will simply call "their" agent to see about arranging a showing.  If this happens, be prepared to pay somewhere in the 3% range to this buyer's agent.  Even if the buyer doesn't come with an agent in tow, many times they will assume that the commission that you would have paid to a real estate brokerage is going to be part of the negotiations.  Ask yourself how you would approach this if you were the potential buyer and I think that you'll see what I mean!

In addition to the marketing of your home, some other considerations of going FSBO are;

Security:  In order to sell your home you will have to allow complete strangers in your home.  At least with an agent you know that somebody else knows who these people are and have knowledge of the fact that they are looking at your home.

Time and Aggravation:  It's not unusual at all for a buyer to set an appointment and then not show up.  Many times if they do show up they may not be qualified to buy your home.  Most times if they are working with an agent the agent has at least pre-qualified them to at least a minimum degree.

Negotiations:  If someone makes an offer on your home you will be on your own as far as negotiations go.  This might not seem like such a big thing, especially if you have experience in negotiations, but I can tell you that I have been involved in negotiations where the buyer and the seller are just a few hundred dollars apart and one party won't budge.  Having that third party to act as a facilitator can mean the difference between selling your home and being back to square one.

Liability:  Selling your home can be a very complication procedure and the opportunity to screw up will surround you.  While a lot of the liability can be minimized by enlisting the aid of a real estate attorney and/or a good title company, having someone in your corner who has sold more than a house or two in the past decade can be a god send!

All this considered, selling your home yourself is not impossible.  It's just not the easiest thing in the world to do.  There is a reason that 90% of the homes that sell do so with the help of a real estate agent. 

As I mentioned above, I attempted to write this article as objectively as possible.  I don't know how feasible this was being that I own a real estate and mortgage company, but I hope that I did at least a reasonable job.  If you don't think that I did, please feel free to drop me a line and to provide some constructive criticism.

R.B. "Bob" Mitchell
ValueList Real Estate Services, Inc.
04/12/07

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