In the world of NYC real estate, there’s a lot of variety, from condos and co-ops to rentals and sublets. And typically, people enlist the help of a broker or agent when it comes time to put a unit on the market. Some people, however, choose to list a property themselves. This type of listing is often referred to as “FSBO” or “for sale by owner.” Electing to sell your apartment yourself can help you avoid paying a commission to a broker (as much as 6%). However, you’ll also need to handle all aspects of the selling process. (We can help. Read about StreetEasy tools to help you sell your home faster.) Here are the important things to know about FSBO before you decide to go solo.
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What Is For Sale By Owner? How does FSBO work?
Owners who want to list their apartments for sale by owner are responsible for marketing the apartment, scheduling appointments, qualifying the buyer, and negotiating.
- Prep Your Home: If you plan to have a unit as FSBO, you will need to handle all the prep work so it looks (and is) its best. This can include making repairs, cleaning and staging.
- Determine an Asking Price: You’ll need to look at comparable properties, or “comps” in your market to accurately and competitively price your home.
- List and Market the Property: You will need to create a listing description, take high-quality photos, post the listing on different real estate sites (that could be free or come with a fee), and handle any marketing like signage and social media.
- Vet Buyers: While agents typically make sure potential buyers are qualified, you will have to handle the vetting process and accept the offer.
- Handle Negotiations: There’s almost always back and forth when selling a property. So, you will have to determine the final price, repair concessions, contingencies, and any other purchase agreement negotiations with an FSBO listing.
- Manage Co-Op Boards: If the owner’s unit is part of a co-op, the sellers will need to facilitate board interviews and ensure buyers meet board requirements.
- Fill Out Paperwork: Although New York State requires that sellers hire a real estate attorney to aid in paperwork and the legal details of the transaction, you will still have to spend time filling out a bulk of it.
Essentially, everything a seller’s agent would normally handle will fall on the owner in a for sale by owner listing.
Who Handles the Contracts and the Closing?
Typically, a seller’s agent will make sure you fill out all the necessary paperwork. However, if you’re an FSBO seller, you’ll have to handle many of the documents and forms yourself. Thankfully, New York requires a real estate attorney to aid in this process, even if the property is for sale by owner. However, as the seller you will likely have to gather a lot of the information such as the signed deed, bill of sale, etc.
“Typically, ‘for sale by owner’ implies the owner would be handling it as if they are their agent,” said Brown Harris Stevens broker Joanne Greene. “The owner would provide their attorney who will draw up contracts, and they would be responsible for providing building documents. If the buyer has no broker, they will get their own attorney who would do due diligence and negotiate the contract terms.”
What Do Home Sellers Need to Know about Buyer’s Agents?
Buyer’s agents negotiate on behalf of buyers. They will be familiar with past sales, the value of comparable properties, etc, giving them potentially a leg up in the negotiation process. If you’re less experienced, this could make getting the best sale price for your home more challenging.
“Perhaps a buyer agent will bring a buyer to the table, but 99.99% of the time, any contact from agents will be a solicitation to have the seller hire them,” said Scott Harris of Brown Harris Stevens. “Sellers should expect to confirm the commission that they’re willing to pay an agent by email, and perhaps through what’s known as an ‘Open Listing Agreement.’ This only commits a seller to pay a commission to this agent if a deal happens with specifically-named buyers.”
The Potential Pitfalls of FSBO
While there is potential to make more money going the for sale by owner route, there are some downsides to consider.
“The seller may potentially miss out on a wider audience—both national and international exposure, that can translate to a higher price,” said Nada Rizk of Brown Harris Stevens. “Brokers have relationships and access to a wider network that help get exposure to a property. Without the benefit from a broker’s relationship, community, and resources, you can miss the ability to connect with your target audience or utilize alternate marketing plans.”