No matter how you do it, selling a home; and doing it to your satisfaction; raises a number of questions and involves making some decisions. What price should you ask? How quickly should you sell the house? What sort of marketing and advertising do you need? And the list goes on.

So why bother going to all the trouble of selling your home yourself? That’s the question we address in this chapter. We hit on the advantages and drawbacks of using an agent to sell your home and then discuss a few of the more appealing advantages that come from selling your home yourself.

We also spend considerable time helping you answer this central question; is selling your home the right decision for you? Strategies and skills can always be learned, but knowing whether or not you’re the kind of person who can put those skills into effective practice is every bit as critical.

Choosing to sell your home on your own involves weighing a variety of issues, but none is more central than weighing the advantages and disadvantages of going on your own—that is, not having the help of a real estate agent to sell your house and manage the entire transaction. In effect, it’s a choice between going with an agent or choosing a FSBO.

We get into the meat of the FSBO versus agent discussion in the section “Why Use an Agent,” later this chapter. But, first, let’s look at a couple of the central issues pertaining to both options.

By selling your home on your own, you bypass commissions paid to real estate agents. Most FSBOs cite this as the number one reason for taking on the job themselves. Rates vary, but you can expect to pay about 6 percent of the selling price of your home in real estate commissions. That’s money that comes directly from whatever proceeds you get from the sale.

Six percent may not seem like much on the surface, but it adds up, particularly if you’re selling an expensive home. Check out the following chart for a breakdown of various commissions:

Some additional good news and bad news. First, the good—the higher the purchase price of a home, the more open many agents may be to trimming their commission somewhat. That, in the end, may trim your out of pocket expenses.

Still, any significant commission can prove a discouraging factor for any homeowner. Say an owner bought a home for $210,000, then sunk some $10,000 into improvements. While that boosted the home’s value to $220,000 in the marketplace, the $15,000 she’ll have to pay on commission cancels out the investment in improvements.

It doesn’t take long for a 6 percent commission to add up to a significant chunk of change, does it? It can get even costlier. More expensive homes with higher selling prices result in very handsome commissions for the agent, but mean less left over for the owner at the end of the sale.

As the Internet has grown and matured, so have the websites available that offer information, calculators, and other valuable tools for homesellers. See the figure that follows.

The potential problem of real estate commissions becomes even more acute if you only have a modest amount of equity in your home.

The term equity refers to the difference between the market value of your home and the claims that exist against it, such as the outstanding amount of a mortgage, a home equity loan or line of credit, and other charges. To illustrate: a homeowner with a $200,000 home and a $150,000 mortgage is said to have $50,000 worth of equity.

See how the issue of equity becomes so important? The less equity you have in your home, the smaller the profit margin, and the greater the impact of a sales commission. In fact, the prevalence of low interest rates has, in many cases, worked to reduce many homeowners’ equity. Because refinancing is easy and cheap, many homeowners roll high credit card debt and even the expense of refinancing into the new loan. Taking advantage of lower interest rates may lower their monthly mortgage payments and personal debt, but it also trims the amount of equity they have in their home.

Another plus to selling your home by yourself is that you’re in complete charge of everything. That means every last decision comes down to you. You decide when to sell your home, when to take it off the market if you so choose, where to set the price, and every other element attached to the sale. A lot of people enjoy that sense of command and autonomy.

Although saving money and having control over every part of the process are important, don’t overlook the sorts of skills you stand to gain by learning how to handle a FSBO. Not only are you likely to sharpen your math skills—no fuzzy math here!—you also stand to learn negotiation techniques, as well as sales and marketing strategies, not to mention a good dose of dealing effectively with people on top of it all. Those are attributes you can use to your advantage, not merely in any future home sales in which you may become involved, but in any number of professional and personal situations as well. Not a bad deal.

Onward we go into our examination of the various ways you can sell your home. Here, we touch on a couple of the advantages of using the traditional real estate agent system to list, market, and, ultimately, sell your home.

Research shows that one of the biggest problems encountered by FSBOs was setting the correct selling price for their home. Fans of the agent system contend that a good agent takes that worry out of the mix by staying on top of fluctuating market conditions, factoring in other comparable homes also up for sale, and taking into account other elements that impact exactly what goes into determining the right price. A good agent can prove to be an effective sounding board, helping the homeowner keep his or her goals and objectives aggressive yet reasonable.

Knowing what price makes for a good sale is another often-cited advantage to working with an agent—they are experienced with the process. Although quality naturally differs from one agent to the next, commission expenses should at least buy you a sales representative who’s not only trained in all elements of the home selling process, but one who has picked up experience and savvy along the way. That, say fans of agents, more than justifies commission costs.

Obtaining all this experience and know-how doesn’t always have to mandate the going commission rate of 6 percent. Depending on the circumstances, there may be some room to negotiate a lower commission. Some agents are willing to do this. A recent report by the National Association of Realtors found the negotiated commission rate had dropped to an average of 5.1 percent—nearly a full percentage point below the usual going rate—and sometimes more.

That’s something, but it’s not exactly a windfall. Using the commission chart that we saw earlier in this chapter, a $250,000 home sold at a 5.1 percent fee takes $12,750 in commission. That’s $2250 less than you’d pay under the usual 6 percent cut. In fact, the dynamics of commission runs against you here—the less your home costs, the less you stand to save with a discounted commission. Only with exceedingly expensive homes do the savings become genuinely substantial. Using the $450,000 home sale example, the owner would save approximately $4000 by opting for the 5.1 discount ($22,950) versus the conventional 6 percent commission ($27,000).

There are real estate agents out there who charge considerably less than conventional agents—either a flat fee or significantly less than the going 6 percent. The trouble is, you pay less but get a great deal less in service. Advertising and marketing efforts may be haphazard or downright nonexistent, not to mention cutbacks in other programs or services that a full-service agent always provides.

So, it’s clear that FSBOs and the traditional real estate agent system have their various advantages and drawbacks. But there are other issues that factor into the equation—considerations that can greatly boost the case for opting for a FSBO.

Money saved or money paid in commissions, of course, are not the only considerations in selling your home on your own and doing so successfully. The speed with which all this happens is often of great importance as well. A well-planned and executed FSBO can take advantage of speed in any number of ways.

Selling your home yourself can be the perfect answer to a home that needs to be sold as soon as possible. Look at it one way, you’re the primary person involved in getting the home on the market and attracting a suitable buyer. You don’t have to conform to a real estate agent’s calendar or work schedule. You don’t have to wait on someone else to draw up an ad or find the time to arrange an open house or a showing. It’s up to you, including the speed with which you want those various things to occur.

Other elements play into a home that needs to be sold ASAP. Let’s say you’ve already found a new home that you want to close on as quickly as possible. Because the pressure is now on to find a buyer for your existing home, selling it on your own provides you complete leeway in setting the price you think will attract a buyer quickly. You may even go so far as to set the price below the reasonable market value you could expect to get if you want to move things along. A low price can attract a lot of buyers who recognize they’re getting a value. You, on the other hand, benefit by turning things over fast (and, by the way, still pocketing a reasonable profit since you’re saving a 6 percent sales commission.)

This table illustrates how a lower price moved a home faster but, in the end, provided a FSBO with a greater profit due to the absence of a commission.

The other end of the speed spectrum also fits nicely with the workings of selling your home yourself. Although many owners want to turn around their sale as reasonably fast as they can, others want to take their time. For instance, some homeowners aren’t certain what they want to do after selling their home. Other homeowners are interested in dipping their big toe in the home sales market to see just how much they might be able to get.

If you’re not in a breakneck hurry to get the deal done, selling your home on your own can make a world of sense. Like other elements of the process, you’re the one who decides what and when. You may want to take your time in drawing up a marketing and advertising plan. You can be as picky as you wish about potential buyers and what they bring to the sale. It’s entirely up to you.

Remember, freedom is a wonderful thing, but you’re as bound as anyone to adhere to the law. That means following anti-discrimination guidelines in selecting buyers with whom you deal. If you have any concerns, check with an attorney.

Another important issue to bear in mind is that you’re likely your home’s best salesperson. Who could possibly know more about it than you—its charming little nuances and features, advantages, and joys that may not be readily apparent on the surface?

That, in turn, puts you in the best possible position to know exactly what sort of sales and marketing strategy will ultimately put your home in the best light. Granted, a skilled real estate agent can learn some, if not all, of those advantages. But as the homeowner, you know them through the power of your own experience. And that adds up to another advantage to FSBOs: at the end of the day, you know more about your own home than anyone else possibly could.

We’ll look at this in greater detail later in this chapter, but knowing everything there is to know about your home shouldn’t come at the expense of objectivity. In-depth knowledge can be undercut by an inability to acknowledge problems or becoming too emotional about the process—in other words, not being able to detach from your home. It’s essential to approach the sale of your home as a house—a commodity than you know very well, but a commodity nonetheless.

By now, you’re hopefully sold on some of the advantages of selling your home on your own. But, truth be told, not everyone is cut out to sell their own home. This can be due to any number of reasons. Perhaps you just don’t have the patience or the attitude necessary to steer a home sale from beginning to end. Many would-be FSBOs were nothing but enthusiastic at the outset of the project, only to abandon their efforts in failure and frustration. So it’s essential to do a bit of soul searching to see if you’re the kind of person who can make the most of the FSBO experience.

That ancient bit of wisdom applies to various aspects of our lives, and it’s very much the case in determining whether or not you’re the sort of person who can sell their own home successfully. Even the best intentioned homeowners can have a tough time preparing, marketing, and, ultimately, selling their homes if their personal attributes aren’t compatible with the responsibilities they’ll be taking on.

The key to evaluating yourself and your potential to be a winning FSBO is complete honesty. Don’t sugar coat or rationalize your thoughts! Take the process outside yourself—ask friends and loved ones to point out those things about you that may be positive or negative.

There’s an old saying: attitude is everything. It’s true—no matter how many outside obstacles you confront, how you process those problems can make all the difference between coming out on top or letting elements beyond your control get the best of you.

That’s absolutely central to how you approach selling your own home. One of the most common attributes among successful FSBOs is a positive, solve-the-problem-don’t-just-complain attitude. Think about that for a moment. If you’re selling your home through a real estate agent and a problem crops up, it’s often up to the agent to devise a solution. In a very real sense, when you hire an agent, you’re allocating the problem solving responsibility to someone else.

Not so with a FSBO. For the most part, if you encounter a problem—say, your home just doesn’t seem to be attracting enough attention or a potential buyer’s being a pain in the you-know-what—it comes down to you to deal with it. And how you deal with it boils down to attitude. If you approach problems constructively and with confidence that you will find a solution, you’re on your way to selling your home. But, if problems frustrate you and the particular whims of the home buying public drive you up a wall, that’s not an attitude that encourages a successful sale.

So, examine your attitude as a whole on top of individual advantages and drawbacks. How you approach the process likely will influence every single element—and, the likelihood of a “sold” sticker eventually crowning your signage.

Needless to say, every homeowner trying to sell his or her house wants the process to be a rousing success. Many sellers make every effort toward that goal—an immaculate house to show, killer marketing and advertising, and top-notch open houses.

However, one overriding problem derails all that terrific effort—being too emotionally attached to the process. As we discussed earlier, some sellers are not just selling a house—they’re selling their home.

The problem with this is one of objectivity. Because what they’re trying to sell is very much theirs—perhaps something in which they have a substantial financial and emotional investment—they forget that what they’re trying to sell is a commodity, pure and simple.

This can cause real problems. Perhaps an owner rejects a fairly reasonable offer because the money, somehow or other, isn’t sufficient for his “baby.” Maybe an owner takes offense when an otherwise interested buyer remarks that she doesn’t care for the paint scheme. The seller may even go so far that he rejects a buyer simply because he doesn’t care for the way the buyer looks. He can’t leave his precious home in the hands of someone like that! (Not only illogical, but potentially illegal as well.)

The ability to approach the process as objectively as possible is an essential skill for being a successful FSBO. This is not arranging your child’s marriage. You’re trying to sell a home that, no matter how much it might mean to you, is nothing more than a collection of wood, cement, and brick.

Our discussion in this chapter boils down to a simple truth. Like everything else in life, not every homeowner is in the right position to sell his or her home. So to wrap up, here’s a checklist of 20 questions that hit on many of the essential issues that are important to a successful FSBO. Some we’ve already raised; others are new. Regardless of whether you’re familiar with a few of these questions, approach each one as thoughtfully and honestly as you possibly can.

The FSBO 20

Add up your yes and no answers. If you’re more on the yes side, chances are excellent that you’re the right kind of person to sell your home on your own. If, on the other hand, there are more no’s, think carefully about whether you wish to proceed on your own or pursue other options.

One final issue winds up our discussion of FSBO—time. In fact, that’s actually more than one single issue. As we’ve seen, time is an important part of the FSBO process—for instance, how quickly or deliberately a homeowner wants to sell his or her home.

But time plays other roles as well. The first issue is the time of year you put your house on the market because this can impact your efforts in several ways. Keep in mind that certain times of year are better than others for selling a home. While that depends in part on where you live and other factors, spring is generally considered optimal. By this point, winter is finally over, and buyers are looking to make a fresh start in a new home.

Not only does the time of year influence your chances for success, it also effects your preparation time. If spring is around the corner and you’re looking to sell, will you have enough time to get ready? If you’re approaching a slower time of year, are you in a position to wait for a more favorable selling period?

The time of year isn’t the only issue. The time involved in the process is just as important—not to mention your commitment to meeting those time demands. A FSBO can be a time-intensive task. As we’ll see in subsequent chapters, there are many steps involved—many of which mandate significant time and effort—and each unto itself can be demanding in any number of ways.

So think about your commitment to that time-consuming process, not to mention your own circumstances. Will your home and professional life afford you enough time to do the job correctly? Will you have to travel any significant amount of time, either for business or pleasure? We’ll offer some tips and powerful strategies to help meet the time demands of a FSBO, but it’s important to acknowledge that you’ll need adequate time to see the process through to the best conclusion possible.

But know that, no matter how time-consuming, the investment is usually worth the end result—not only in money in your pocket, but in the satisfaction and personal reward that a successful FSBO can offer. Now that you know some of the ways a FSBO can pay off in a big way—not to mention whether you’re suitable for the challenges ahead—we can move on to the first practical steps in preparing your home for a successful, and hopefully brief, stint on the market.

Here are a few websites that can introduce you to FSBOs and further your understanding of the differences between selling your home yourself and using a real estate agent:

The Least You Need to Know