Saving the commission through the 3% FSBO Myth may seem like it's worth it, but it may likely cost the seller thousands of dollars. When a seller goes the FSBO route, the goal is to sell the property for the same amount it would sell with an agent and save half the commission.

The real estate commission is often 6%, split evenly between the seller's agent and buyer's agent. If a property is sold by the owner without a seller's agent, they save half the commission or 3%. 

The key here is getting the same sales price an agent could get when selling the same property. Often, FSBO sellers think this is possible and don't realize they are leaving thousands of dollars on the table just to save 3%.

This type of situation usually happens when a buyer tells their agent they'd like to see a FSBO property. The agent finds out they will still get their 3% commission and the buyer gets to see the property, so they are both happy. The seller has a potential buyer looking at the property and thinks they will save the 3% commission, so they are also happy. Seems great, but there's a catch.



The Buyer Knows You're Not Paying a Full Commission

Usually, in this scenario, the buyer knows the seller isn't paying a full 6% commission. Buyers are not thinking that you, as the seller, should be able to sell the property for the same price, since you're paying half a commission.

Instead, buyers looking at FSBO properties often make lower offers. They think the discounted commission should lead to a lower sales price because the seller is already saving money compared to hiring an agent. This causes buyers to make lower offers than they normally would if the seller hired an agent.

Buyers often don't think an FSBO seller should be the one saving the money. Instead, they believe they should be getting a better deal since the property isn't listed with an agent. Buyers will do the math in their head and realize the seller is saving 3%. This leads to the buyer believing they should get that deal and making a lower offer on the home.

The Key to FSBO vs. Hiring an Agent

The key to the 3% FSBO myth is whether you have the ability, as the seller, to get the same price or a better price than an agent can get for you. If you can't get the same or a better price, you'll likely lose more than you will save on the deal.

In addition, most good agents will save you a considerable amount due to their relationships with inspectors, attorneys, contractors, title companies, and other vendors. Often, these savings will help offset the 3% commission paid to the agent for listing and marketing your property.

Deciding to sell your property without an agent may seem like a good idea, but it doesn't always net you a better amount when the deal is done. It may also keep your property from selling as fast. Make sure to consider this before you decide to go the FSBO route instead of hiring an agent.