Real Estate Term of the Day: FSBO

Real Estate Term of the Day: FSBO

FSBO – for sale by owner. A term referring to properties on the market that are not listed with a real estate broker (Barron’s Dictionary of Real Estate Terms) 

Here is a great article that I found on CBN.com featuring Dave Ramsey:


Real Estate Agent vs. For Sale By Owner

By Dave Ramsey
Author, The Total Money Makeover 

CBN.com – These days it pays to be smart about money. That’s why it’s important to take this wise counsel from financial expert Dave Ramsey.

For sale by owner?

Dear Dave,

What are the advantages of using a real estate agent versus going the for-sale-by-owner route when it comes to selling a home?

– Seth

Dear Seth,

I’ve had a real estate license for 30 years. If I were to put my personal residence on the market today, I’d use an active real estate agent who really knows his or her stuff in the marketplace. I’d gladly pay them their commission, too.

Now, why would I do that if I could just sell it myself and save the commission cost? For starters, if I do a for-sale-by-owner, or FSBO, I’m only getting my place in front of buyers I can attract from seeing a newspaper ad, Craigslist, and anyone who happens to drive by the house. If you go with a high-octane real estate agent, you’ll have the advantage of being exposed to their entire pool of buyers. More importantly, you’ll be in the MLS, or Multiple Listing Service, database. There, you’ll immediately have thousands of potential buyers. So, who do you think will have the best chance of selling your house? Market exposure is everything in the real estate game!

And think about this: Even if you went the FSBO route every time you moved, you might do three or four of these transactions in a lifetime. A good agent closed three or four deals last week! They’ll know all the ins and outs of buying and selling a home, and they’ll walk you through every step of the process. Research has shown that between basic mistakes, pricing errors, and lack of negotiation skills, you’ll cost yourself more than the agent’s commission by trying to sell it yourself.

Trust me, you’ll get a much better deal—with a lot less hassle—by using a top-flight real estate agent!

Dave


Source: http://www.cbn.com/finance/ramsey060710.aspx