“We are looking to sell our condo and have been advised we should do “by owner.”

fsbo
Photo by PoPville flickr user washingtonydc

“Dear PoPville,

We are looking to sell our condo in Logan Circle, and have been advised by people (who don’t live in DC) that we should do “by owner.” I’m uncomfortable with the idea but would love to know how others who have gone that route have fared, as well as if potential buyers would be attracted or deterred by a FSBO listing.

There was a very helpful chain on PoPville from Jan. 2013 that I read and found helpful, but – given the pace of our market since then – I was curious if you might be willing to re-explore the topic?

54 Comment

  • Go with SoloPro
    A condo in Logan sells itself.
    I wish we had known about these guys when we started – we couldve pocketed the commission.

  • Personally, I think there are too many benefits from having a listing agent than trying to avoid paying the 3% commission they ask. It takes a lot of time and effort to market a property, host open houses, viewings, etc. Not having an agent doesn’t get you out of the fees and taxes, etc.

    • You can buy those services a la carte now. No need to pay for services you don’t want/need. I havent used the SoloPro company, but I would be interested to know if anyone else has.

    • Having worked with too many realtors, I’m gonna disagree. Any chance you’re a realtor that’s a little fretful of their future career prospects? I would be too.

    • It’s not 3% when you have to pay the seller and buyer REALTOR fees–6% traditionally.

  • what about using a redfin realtor. THey do the work but take less commission than a traditional realtor. These things are negotiable. If you are in a hot market, it will sell itself.

    • This is what I was going to recommend (although someone said elsewhere in this thread that Redfin isn’t taking any listings at the moment; maybe you can find a different discount realtor).
      .
      A discount realtor seems like a good compromise between straight-out FSBO and a seller’s agent who’s going to take 3%.

  • It is a risk/reward thing. (Full disclosure I am an agent, but only work with buyers)

    You can easily get your listing on MLS now with some companies that charge a flat fee. That doesn’t always get the work out like a brokerage can. Let’s say some of the other commentators are right, you can save money by going FSBO. Having a realtor can help maximize the money you can earn though. Not everyone charges 6%. Some are as low as 3.5%

    Having someone make sure you understand the contract and the virtues and vices of the multiple offers you are likely going to receive is also helpful.

    Just thoughts.

  • Honestly OP, had you included a bit more info you probably could’ve sold it in this thread!

  • A Realtor is going to make sure your house appraises. If it doesn’t you are likely going to lower the sales price when it doesn’t appraise, which is an issue in hot markets, by more than the amount you would pay a Realtor anyways.

    • This happened with my place. I was not the highest offer by far. But the owners got good advice re: appraisal and the buyer who was actually going to be able to “get the deal done” (the appraisal ultimately came in more than $20K below the highest offer). The very happy sellers still got above list, with a 30 day closing (helpful to their out-of-state move), and I *squeaked* in under the appraisal (though had enough cash in reserve that if it had come in a little low, the sale would have gone through with no changes they would have to worry about – knock the loan down to original LTV % and I’d pay the rest).
      .
      OTOH, you can probably get a good sense of what your place would appraise for by just poking around the internet. I suppose you could also hire an appraiser, which is usually under $500, so you don’t fall into that trap. And you have the buyers’ financials, so you can make an informed decision on that front, too.
      .
      Largely depends on how savvy you are and how much time you’re willing to put in yourself.

    • an independent appraiser can do that exact same thing, for far cheaper.

      • You mean those people whose primary source of income is telling lending banks exactly what they need to hear and never a penny more or less? Yeah, they’ll take your money and write a report for sure.

        • Yup – those exact people. Which, as a seller, is EXACTLY what you want to happen. 😉

        • Far be it from me to say that appraisers are a 100% honest and independent bunch, but I can “reverse engineer” their formulas pretty easily, so there’s at least some basis in reality to what they do (particularly if they don’t have a number in mind before doing the report). Because I can understand these formulas, before I had my appraisal to get out of PMI back in January (not a refi…the insurance I had required only an appraisal to terminate), I ran my own comps on the internet (Redfin and Zillow took me to the *exact* properties that were used as my comps), and came up with a number that was within $2500 of what the appraiser said. If you sit down and read an appraisal report, the math is pretty obvious. A few things, like the value of a parking spot or a half-bath, are somewhat nebulous (and that’s somewhat related to “quality differences” like garage versus open pad and assigned versus unassigned, continuing the parking example), but since I have, like, 5 or 6 “official” appraisals I could read over, I was able to pin down a “decent enough” range for the value of those things (obviously, by coming up with such a similar number).

  • I purchased a unit I was renting from my landlord and we were both ecstatic to save on the realtor fees. There’s comprehensive tutorials on the process out there so you don’t mess anything up, and services like Zillow and Redfin propagate listings to most buyers (especially in-the-know buyers who aren’t using their own buying agent; so there could be 6% in savings instead of just 3%).
    .
    You’ll still use a closing service to finalize everything, so the only risk is not finding a buyer as quickly as you might otherwise. Given the market, it’s not much of a risk. If you aren’t in a rush or anything, it’s no risk at all; you can resort to an agent if you have to.
    .
    The one thing a realtor will do (besides advise you on decor and listing practices and write awful self-parodying blurbs) is advise you to lower your expectations for selling price (while the buying agent lifts the buyer’s expectations for buying price) so the deal closes as quickly as possible. Again, this will all come down to your urgency to sell; the market will solve pricing issues for you.

  • very interesting and informative article on this subject in the WaPo Real Estate section this past Saturday. Might be worth a read.

  • We used redfin to buy and sell. I would highly recommend them.

  • You’re likely to hear a lot of conflicting opinions in this thread, but I’m going to add my two cents in any case. In short, I agree with GBinCH and think the commission actually buys you very valuable services that you may not have the time or expertise to do on your own, or the knowledge to handle on your own. Good agents can streamline the whole process for you so you’re not spending a ton of time researching the million details that come with a home sale and hoping that you’re handling them properly.
    .
    Also, an anecdote for you to take as you will. During my last DC home search, we found a great property in our desired neighborhood at our strike price, but ended up not bidding on it because it was for sale by owner. The seller seemed reasonable, but the negotiation seemed a bit off script and haphazard and we just didn’t want to move forward with the uncertainty it entailed. Based on comps, this was a property that “should have” sold within days with escalation, but is stayed on the market at least a month.

  • houseintherear

    My parents are big proponents of selling by owner. It has worked for them many times (even before the age of the internet). The key is to have a good lawyer to do the paperwork.

  • Have you sold a home before? I think that the need for a real-estate agent totally depends on someone’s familiarity with both the market and their experience with previous transactions.

    I’m with GBinCH though. There are a lot of benefits with using a listing agent that are easy to overlook until you are in the middle of the process.

  • I just listed (and ratified) a house in Petworth. It was my first sale and I couldn’t imagine doing it without my agent. Since we used them to purchase this house 4 years ago and purchase the house we’re buying, they gave us a discount on the fees.

    If you have a really good agent they will earn the money you pay them. Just my opinion.

  • It’s a condo in Logan so it should sell it self. I’ve seen homes sell pretty easily off Craigslist oddly enough. You could always do a FSBO and if you run into issues bring an agent in later.

    A few weekends of showings and you should get offers if it’s priced right.

  • as many have mentioned, the condo will sell itself. so clearly you don’t need a realtor for that part. what you probably need is a good, efficient closing/title company, once the house is sold. that way you can keep a LOT more of the profits. realtors are a thing of the past imo…

  • When we were house hunting, we put in an offer on a place that was FSBO. The seller (husband, specifically) was a pain in the ass, jerked us around so many times that we pulled our offer. So yes, that experience would dissuade me from pursuing another FSBO.

  • I’ve bought / sold 5 homes / condos in DC without a realtor the past 7 years. I know realtors try to make it all to be “mysterious” and “black-box”, but it isn’t.

    If you’ve never done it before, I would use Redfin and save yourself a couple percent on the listing.

    The truth of the matter is with DC being “boomtown”, many properties never even make it to the open house. None of last 3 properties I listed did. I listed them on a Monday/Tuesday and all three were under contract before the Sunday open house.

    Realtors have a great gig going, I get it. They waive any and all legal responsibility if anything attached to the transaction goes wrong, they spend 20-30 hours of their time over the course of a couple months driving you around to look at listings you yourself found online, send a half a dozen emails to the settlement company that you found, and the loan officer you found and voila, a 3% commission ($18,000 commission on the median priced Logan Circle Condo).

    I don’t know many other professions where you command $600/hr, got certified by a 2 hour night course and assume zero legal liability for anything.

    The settlement company is going to do all the work related to settlement, and the bank/broker giving you the mortgage does everything related to inspections, appraisals etc. Today’s realtor in a place like DC is nothing more than a really expense car / phone service.

    Find yourself a real estate attorney to review /respond to the offers you get and pick one of the 300 settlement companies in the area and you are good to go if you don’t want to use something like Redfin.

    • I, too, have bought/sold several houses including a condo in Thomas Circle. I have used realtors and discount realtors that all worked out just fine. However, one month to closing on my Thomas Circle condo, the unit above me burned to a crisp and my unit suffered complete water/smoke damage. But, thanks to the realtors involved, it closed on time and for the agreed upon price. It certainly wasn’t easy or fun, but it would have been a disaster without the help of the realtors. (experienced DC realtors, I might add). A freak accident that I never thought could happen to me.

      • How did the realtors help in this situation? I’m genuinely curious. It sounds like a property insurance claim on your end and some understanding/patience/genuine enthusiasm on the part of the buyers either way. Did the realtors do a good job convincing the buyers they couldn’t do any better? Is that how they helped?

        • Yes. There were many things going wrong with insurance and the condo’s insurance and the cause /blame of the fire. The buyers wanted to walk away several times, but my realtors really convinced the buyer’s realtor/buyers that everything would be fine and eventually they would have a great condo in a fabulous location. And it did all work out well after many sleepless nights for me.

    • @Gene or anyone: for the houses that sold before the open houses, did the buyer offered list price or did they escalated or offered above list price? Although most agents don’t accept offer before the open house, I wonder about those who do accept, what do they expect from the buyer in this hot market? Thanks

  • As with most transactions, each medium has its pros and cons. We sold our condo in downtown and bought a house in NE, both with the help of a realtor. In the end we are very happy with our choice.
    The 5.5% commission (2.5% went to our agent, rest went to the buyer’s agent) paid for an open house, fliers, lock boxes (one of them was stolen and had to be replaced), parsing through offers, filtering a few unique offers, insight into contingencies and $30k above asking price. We ended up going with a second best offer (in terms of price), based on our agent’s insight into each offer, all within a matter of 4 hours, in the heat of a bidding war.
    If you do a FSBO, a buyer’s agent is less likely to direct their client to your property, for a variety of reasons, including a concern about their commission. You will have no trouble attracting buyers in Logan, but probably not the entire universe of potential buyers. Individual buyers without agents, are also looking for a deal, so they are going to cut into any potential savings. Your list price also comes into play – if you value your time and effort at a lot less than 6% of your list price, that’s something to consider.
    The only suggestion is to make a well-informed decision. There are no right or wrong answers in this market. Good luck!

    • “Individual buyers without agents, are also looking for a deal, so they are going to cut into any potential savings.”
      .
      This didn’t occur to me until I read this comment, but SO. MUCH. YES. Because the entire commission comes out of the seller’s pocket, technically (you can think of commission as “baked into” the sales price on the buyer side, but I don’t feel that’s an accurate thought process in a functional and free market where prices are determined by competitive bidding (this does not necessarily mean “bidding war,” but rather people make offers of what they feel is fair to pay, not thinking about commission as part of that, and the price settles where the seller gets as much as the buying and lending market are willing to bear)), a buyer who decides or agrees to do the sale without a buyer’s agent is probably going to ask for a discount of greater than 2.5-3%, so your savings start to shrink. Especially if they come into that transaction wanting to do it fully independent, they’re probably really savvy, and are going to drive a hard bargain. Will that ultimately matter in this market (particularly Logan, though we don’t know the *exact* specs/condition/location of the OP’s place)? Maybe not. You may well get over list and save yourself 2.5-3% or more if someone not represented wins a bidding war. Just something else to consider, given some people being averse to FSBO in this thread.
      .
      The other thing I would *strongly* encourage you to do, no matter which way you go, is get decent pictures of your place. Hire someone, buy a friend with a knack for photography and good equipment dinner in exchange for their help…WHATEVER. I’m so sick of looking at lazy, terrible listing pictures, for both for-sale and for-rent properties. As a few do’s and don’t’s: DO take pictures at a time when your place gets the best natural light (in general, north or west facing afternoon; south or east morning; with a note that south and north reverse from June-September and if your place has conflicting exposures you might have to do two sessions at different times…if you take pictures at night, don’t ever speak to me again); DON’T forget to remove clutter/random things from pictures (I do not need to see your bra drying on the shower curtain bar; ditto for your dish drying rack hanging out on the counter); DO take pictures of every room; DON’T forget to *capture* the whole room (“wow…that corner of the bedroom is really interesting…wonder what the rest of it looks like?” This sometimes requires contortion/standing on things/sitting on the floor or multiple pictures from different angles, but I’ve managed to pull it off with a cell phone camera for rental listings).

      • To be clear, I’m indicting a lot of well-known RE companies in DC in this comment as well. Perhaps the sellers balked at the cost of bringing in a photog, but I’ve seen PLENTY of agent-listed places with TERRIBLE photos. This is not a problem limited to the independent/unrepresented landlord/seller, it’s endemic in a hot market where landlords and sellers feel like they don’t even have to try. My realtor (who is also a friend) has a pretty sweet deal with a photog, so it doesn’t even cost that much. It’s even possible for most people these days to take their own photos, but they have to actually care/pay attention/have *some* eye for composition.

  • On a tangential note… this past weekend I went to an open house for a property in my neighborhood. The realtors said it was an “estate sale,” so I wasn’t particularly surprised that there were still a few items of furniture in the rooms and quite a bit of stuff in the basement.
    .
    But what really surprised me was that the lawn was overgrown and hadn’t been mowed. (There were also a few random discarded items in the back yard.) Disposing of furniture requires time, coordination, and effort, so I can understand their not having done it yet (and I suppose they can do so any time between now and the walkthrough that precedes closing) but come on… how much trouble would it have been to have had the lawn mowed??
    .
    Especially when a property’s interior requires imagination (it needs significant rehab, possibly even gutting — although it would be a shame to lose the remaining woodwork), you’d think the realtors would make a little effort with the curb appeal. I don’t know if they’re working at the regular 3% rate, but if so, they don’t deserve it.

  • When I was house hunting, I specifically avoided an FSBO. Didn’t feel like dealing with a seller who would need to figure anything out.

  • The question is not “does an agent provide value to a seller”? The answer to that question is almost always yes (though I’m sure some agents may not). The real question is “does the agent provide enough value to a seller to justify the Commission”? In a hot market, I suspect not, but it all depends upon how you value your own time. I suspect an agent-sold place in Logan Circle isn’t going to fetch a much higher price than a FSBO. It’s probably quite a time commitment to do a FSBO relative to an agent sale, though both require a lot of time on the part of the owner. Some people are willing to pay $100+ a week for house cleaning; others aren’t. You can sell your house yourself and get a good price, but is your time (and the headache) worth it?

    • Assuming that I’m selling this median Logan condo – I’ll take those $18k, thank you very much. But then I guess I may be relatively poor, as clean my own bathroom and such.

  • It is common that people who are not familiar with the DC real estate market decide to give you advice. The DC region is quite unique in the kinds of inventory we have, the speed with which properties move, and the multiple offer stories. While going FSBO saves you some $ as the seller, you may be confronted with offers that are not particularly clear, a buyers agent who is not willing to negotiate or communicate, and a process that drags on longer than expected.

    Working with a professional realtor gets you the best results in the shortest amount of time. They are here to advise you, look out for your best interests and get the best price for your property.

  • Just echoing what others have said, but agents aren’t going to show your property unless their clients insist. Less to do with a potentially lower commission and more to do with the fact that the agent representing the buyer isn’t going to want to have to hold the hand of the FSBO during the process.

  • I’ve been in real estate and would ALWAYS use an agent. They know the market. They can do the comps with no emotion. They can negotiate with no emotion, etc. Would I like the 6% in my pocket? Sure. But I would much prefer to have the full asking price or more and to me, that, plus much more, is what an agent can deliver.

  • With the market as hot as it is, I would recommend using a realtor. You are bound to get multiple bids and choosing the best one will require expert advice. What looks like a sound proposal may have many loopholes.
    This is a huge transaction. Not a time for doing it yourself. (I am not a realtor)

  • We bought our condo from a FSBO (we had an agent). The seller just put an ad in the paper; he had no idea he was supposed to provide a list of disclosures or anything. If you want to be sure you do everything correctly and don’t leave yourself open to a lawsuit (we didn’t sue, just saying), either go with an agent or as others have recommended, get a lawyer to make sure you understand all your legal liabilities.

  • If you’re generally a competent DIY’er with the time and patience to research the process, then it’s a no brainer to go without a Realtor. It’s a pain in the ass to buy or sell a house but it’s not anywhere near rocket science. It’s actually quite simple, again, if you’re willing to do a little research. And if your home is worth a half a mill, you can buy yourself a new car with the savings. The middle ground of negotiating down the fee to something more reflective of the value Realtors add is certainly worth exploring too.

  • SilverSpringGal

    Something I want to try in the median of going it alone or forking over 6% to agents, is a flat rate service like DC Home Buzz.

  • A condo in a strong neighborhood sells itself and you can save $10,000 – $30,000.

    HomeZen (myhomezen.com) is a new DC startup that makes it easier for owners in DC to sell without an agent by providing information, tools, and access to experts (real estate agents and settlement attorney).

  • Agents no doubt provide some value— but I struggle that the value varies so greatly depending on the list price of your property. What services are you going to provide me for my $600k property that you wouldn’t provide me for my $300k property? Even allowing that there is some different level of service, as a seller of a $300k property, should I be comfortable that I’m not getting my agents “best” level of service? In a sense, you’re paying for access to information and sharing of information, which realtors no longer have a monopoly on. A flat fee structure makes a lot more sense, when what you are paying for discrete experience and expertise. Would be interested in an argument to the counter that doesn’t rely on intangible assertions.

    • Agree. The percentage commission model doesn’t make sense because the amount of work does not change linearly with the price of a home. Access to information is more open and you really just need access to the right information and tools (contract, regulatory disclosures, etc) and someone to answer your questions when you have them. That’s what we provide at HomeZen. Check us out. Would welcome your thoughts and feedback.

  • I’m not sure why people keep saying that you can save 6% going FSBO.

    You can save 2.5-3% on the sale side, but the buying agent will always cost you 2.5-3.0%.

    And like a previous commenter mentioned, if your buyer is not represented by an agent, they WILL BE LOOKING FOR A 2.5-3% discount because they are “saving” you that money to avoid a commission.

    So you just have to decide if saving 2.5-3% is worth the hassle. I don’t know what percentage of people avoid FSBO’s but I bet it is not minimal. If a FSBO is not greedy and prices fairly in a hot market (sometimes hard to do when inventory so low like now) the house will sell. Will it sell for 2-3% less than it could have with a highly skilled and connected agent? Tough call and you may never know.

    Not a agent here. I’m going to sell my $1M condo near U St soon, and I struggle with this question. The percentage model is tough at the higher price points to swallow.

    • U St, Good point re: the distinction b/w the two commissions, and buyers wanting that back in the form of a lower sales price in some, but definitely not all, cases.

      Still, saving the listing agent’s 3% is worth $24,000 on an $800,000 home, and $30,000 on a $1,000,000 home, so it’s a lot of money. This doesn’t include the cost of a non-agent solution, but those solutions are much more affordable.

      Check out HomeZen. It won’t cost you much, so you pocket a ton of cash, and it provides access to experts (e.g., experienced agents and settlement attorney who answer your questions), in addition to information and easy to use tools (e.g., disclosures, form contract, contract comparison tools, etc).

      Also, many economic studies show that FSBO homes don’t sell for less than agent-assisted sales. Sometimes they take a week or two longer, but the sales prices are comparable.

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