I am going to be publishing an article about the pros and cons (Or percieved pros and cons) of FSBO listings. I would appreciate any input or insight you guys can provide to further my research.

Specifically: Why do home owners tend to try FSBO? Is it because they think they will save the commission? Do they think they can sell it as fast for as much as a realtor?

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I believe the only reason fsbo's take on the huge job of trying to sell on their own is to save the commission. I got into real estate after my own fsbo experience when trying to sell my 1st home on my own. I thought I could save the commssion plus sell it a little lower than what a brokerage could, thereby saving money on both my end & the buyer's side.

I had showings & people jumping up & down because it was such a cute house. I even had an offer - for 50% of what I was asking! Listed it with a friend at a price much higher than I would have put it at & it sold very quickly at full price. That's what got me interested in becoming an agent; knowing that the services of a real estate company can truly net a seller more money than if they try selling on their own.

Of course, with the low interest rates of the past 3-5 yrs. it has definitely been a different market and many more fsbo's were successful than in a usual Buyer's Market. But the bottom line is that they still think they can save the commission and are willing to do all the work involved plus spend advertising dollars.

For those that are successful, maybe they did save a few bucks. But no one would really know if what they sold for on their own was better than what they could have netted using a brokerage.

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Judy,

PROS: The biggest one: The POTENTIAL to save money.
As Judy mentioned, in a Sellers Market everyone is a Real Estate Expert In a SELLERS MARKET the fact that you will be doing very little marketing is offset by the much higher demand.

You are so right about the motivation for most FSBO's. They have a perception that they will save costs. Yet, the reality is often that the FSBO looses quite a bit of money.

One of the easiest ways to see this is by looking up the sales stats for a local flat fee realtor and doing a Comparative Market Analysis on that companies recent sales.

While you are looking up that Flat Fee Company, be sure to note their failure percentage (cancellations and expired listings divided by solds and pending sales). This is usually much higher then the market as a whole. Some of the local Flat fee companies here in San Diego have 50-60% falure rates with their lisitngs.

Here is an example I recently found:
I had a recent inquire from a potential client who was wondering about the value of their home... One of their neighbors had recently sold with a full service real estate company for $805,000 (this resulted in between $48,300-40,250 in Realtor Commissions). Another neighbor, with a home aproximately 12% LARGER, Listed and Sold their home for $753,000 and ended up paying about $11,000 in total real estate commissions.
805,000-48300=$756,700
753,000-11000=$742,000 (400 sq/ft larger, Same builder, & the same street!)

The bottom line is most serious Buyers contract buyers agents to find them homes.

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