Saturday, November 1, 2008

Steep FSBO learning curve pays off

A FSBO's savings on commissions can be a real windfall of thousands of dollars. In a recessionary economy, that's a lot of dead presidents to put to work. Just beware. Before you become a successful FSBO you'll have to become a smart FSBO, real fast.

by Broderick Perkins
© 2008 DeadlineNews.Com
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Deadline Newsroom - In the time it takes for you to sell your own home, you've got to summon the experience of a real estate agent who's been in the field for years.

However the crash course in home selling is worth the cramming because it comes with a hard-earned windfall most FSBOs (for sale by owner) put to good use.

It's that fat bottom line, of course, that motivates FSBOS. Do the math. Based on the typical 6 percent commission, a FSBO can save up to $15,000 on a $250,000 home. Buy in high-cost areas like Silicon Valley you can easily save $30,000, $40,000, $50,000 or more.

In today's economy that's a lot of hard cash sellers can't afford to abuse.

When surveyors at the asked FSBOs who'd sold homes on the Web site what they did with their "commission" 80 percent of them said they found financially prudent ways to spend it.

That's not surprising, given savings-minded consumers typically don't squander what they've squirrled away.

How FSBOs Used Savings
Down payment on next home42%
Paid off bills26%
Saved for retirement13%
Paid child's college tuition 2%

Enjoying an average savings of $12,750, more than 1,000 FSBOs responded to the survey conducted via email to those who'd listed homes on charges from $89 to $899 for a range of advertising and marketing services.

But another cash benefit FSBO's realize makes those amounts relatively small fees that are worth the expense.

“Many families would need years to save $13,000, especially in current economic conditions.”

A recent Consumer Reports study "How To Protect Yourself In Today's Rocky Real Estate Market," revealed that 82 percent of respondents who sold with the help of an agent received $5,000 less, on average, than their original asking price. Almost all of the only 17 percent who sold their homes without an agent said they received about what they originally asked.

"Many families would need years to save $13,000, especially in current economic conditions. Our survey reveals the noteworthy trend that, unlike the recent practice of using home equity to fund big-ticket discretionary spending, FSBO consumers are using the commission savings for more conservative purposes,” said Greg Healy, Vice President of Operations for

FSBO News Center

FSBO Listing Sites
IRED's National FSBO Web Site List

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's news that really hits home!

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