If you advertise using a flat fee mls type company, where you are still for all practical purposes, doing it by owner, you must put down the commission percentage you are paying in the listing.

If you are not using one of those companies, agents will not show your home if they aren't getting paid. If an agent has a buyer, they will normally call you and verify commission and have you sign contract agreeing to pay them commission before they show it. If a buyer has an agent and signed a buyers representation agreement, they will owe agent commission even if they buy a fsbo. Most will not want to pay out of pocket. You will be competing with listed homes where the buyer doesn't have to pay commission.

If you are in a hot market, you may be able to sell fsbo, to a person that is unrepresented. In that case hire a real estate atty. Make sure you fill out proper seller disclosure forms.

If you have a buyer with an agent, you can let them do paperwork, but since they represent the buyer, I'd consult with your own atty to be sure you understand contract.

Thanks for the response. Hmm, I don't mind paying an agent's commision between 2.5% - 3% since I would try to settle between the 163-166 range honestly. In that case, agent (3%) would getting $4,800 from my total profit. I will have to contact my banking institution to see how long it would take to clear my current mortgage from the account (paid off after purchase) else I'd have to fork over the $4,800 right on the spot.

it all gets taken out of the proceeds at the closing. You dont need to clear any checks first.

You should also contact a title company and ask them to do a net proceeds for you. Get a loan payoff first, then give an estimated closing date about 60 days away. In some states you will have property taxes thru the date of closing taken out of your proceeds, then, if you had them escrow ed in your pmt, your mortgage lender will refund them back to you within 30 days of the loan being paid off. You might also have title policy fees, title company fees, and depending on the type loan the buyer uses, other fees as well (va loans for example make the seller pay more of the costs.)

thanks for the tips. I will have to look into those with the title company and negotiate plans through a real estate attorney on what ideally i'd like to pay.

Bry911 wrote, " I know this is not the advice you are looking for, but I am not sure you are a great candidate for FSBO. Unless this is rental property and is generating income while you sell it, it will not take long for your $900 per month payment to eat into any benefit from FSBO'ing."

I was going to say the same thing, but coming from a non - agent should be more meaningful.

Have to agree with NC and Bry

Budget for closing costs:

$500 title work, recording fees, stamp taxes, other junk

$500 attorney review of purchase agreement

3% commission (unless buyer is unrepresented)

?? pre-paid taxes (you pay buyer for accrued taxes--will get back from your escrow refund afterwards)

If you've got flat fee MLS in your area, that would be the least expensive (~$500) way to get the most exposure.

Listen to what the above posters have said about pricing. What you need out of the house to break even has nothing to do with what people will pay for the house. Spend a few hundred dollars on an appraisal to figure out where your house fits into the $145-190K range.

Why are you selling? If it's because you have to (e.g., relocating for a new job), then time is more of an issue and bry's advice may be wise. If you have no deadline, and thus it doesn't really cost you much to sit for a while (a possibility if you FSBO without MLS advertising it), then it might be ok. Hiring a realtor is no guarantee that you'll sell it quickly. But MLS exposure maximizes your visibility, which should drive traffic and raise the probability of a faster sale.

There is a flat fee Realtor in my area that gives full service if you need it (I do not). It's a fantastic deal. I've used that company multiple times and will continue to do so.

Look for one of those, preferably one without the "discount" word in the name of the company. Great service, and you save thousands, but you do have to pay a Buyer's agent, if one comes with a buyer.

Why are you selling? You certainly don't have much equity and sales and carrying costs could put you in the red. People will only pay the minimum they can get the Seller to accept, so I would be very surprised if you even broke even.

Many people assume a FSBO is not going to pay any real estate commission so buyers will often offer much lower than your asking price. Any fairly educated buyer will also look up the tax record and see what you paid for it one year ago, and will be unlikely to offer you any more than that unless you did some very significant renovation.

I really liked point #5 in the article below. "Many homeowners believe that they will save the real estate commission by selling on their own. Realize that the main reason buyers look at FSBOs is because they also believe they can save the real estate agent’s commission. The seller and buyer can’t both save the commission."

http://www.keepingcurrentmatters.com/2016/03/28/the-top-5-reasons-you-should-not-for-sale-by-owner/?utm_campaign=Blog_Promo&utm_medium=Social&utm_source=Facebook&utm_content=dailyblogpost