Sell My House Working with Real Estate Agents and FSBO 1 — Questions and Answers
Question 1: What does FSBO stand for in real estate?
- Fixed Sale By Owner
- For Sale By Owner (Correct answer)
- Federal Sale of Building Ordinance
- Final Settlement By Offer
Correct answer: For Sale By Owner
FSBO (For Sale By Owner) refers to a home sale where the seller handles the transaction without hiring a listing agent, typically to avoid paying a seller's agent commission.
Question 2: What is the primary reason sellers choose FSBO over using a listing agent?
- FSBO homes sell faster on average
- To avoid paying the listing agent's commission, typically 2.5–3% of the sale price (Correct answer)
- FSBO sellers get higher prices on average
- Real estate agents are legally prohibited in some states
Correct answer: To avoid paying the listing agent's commission, typically 2.5–3% of the sale price
Saving on the listing agent commission is the main motivation for FSBO, though sellers still often pay the buyer's agent commission and handle all marketing, negotiations, and paperwork themselves.
Question 3: What is a listing agreement and what does it obligate the seller to do?
- A purchase contract between buyer and seller
- A contract between the seller and a real estate agent authorizing the agent to market and sell the property, typically for a set commission and timeframe (Correct answer)
- An agreement with the MLS to list the property
- A contract with a title company to conduct closing
Correct answer: A contract between the seller and a real estate agent authorizing the agent to market and sell the property, typically for a set commission and timeframe
A listing agreement grants the agent the right to market the home, defines the commission structure, and specifies the listing period, typically 3–6 months.
Question 4: What is a buyer's agent and does the seller typically pay their commission?
- An agent who represents the seller's interests; commission is paid by the buyer
- An agent who represents the buyer; the seller traditionally pays the buyer's agent commission from sale proceeds, though this is evolving (Correct answer)
- An agent who works exclusively for banks on foreclosures
- A dual-agent who represents both parties with no commission
Correct answer: An agent who represents the buyer; the seller traditionally pays the buyer's agent commission from sale proceeds, though this is evolving
Traditionally, sellers paid both agent commissions (listing + buyer's), but post-NAR settlement (2024), buyers may negotiate directly with their agents, changing how commissions are structured.
Question 5: What is 'dual agency' in real estate and what risk does it pose to sellers?
- When two listing agents share a listing
- When one agent represents both buyer and seller in the same transaction, creating a potential conflict of interest (Correct answer)
- When a seller hires two separate agents
- A legal requirement in states with buyer protection laws
Correct answer: When one agent represents both buyer and seller in the same transaction, creating a potential conflict of interest
Dual agency means the agent cannot fully advocate for either party since they represent both, which may result in the seller accepting a lower price or fewer favorable terms.
Question 6: What is the MLS (Multiple Listing Service) and why is access to it important for home sellers?
- A government database of all foreclosed properties
- A private database where agents list homes for sale, giving the listing maximum exposure to buyer's agents and online portals (Correct answer)
- A mortgage lending service for home buyers
- A monthly market report published by the National Association of Realtors
Correct answer: A private database where agents list homes for sale, giving the listing maximum exposure to buyer's agents and online portals
MLS listings are syndicated to Zillow, Realtor.com, and hundreds of other sites, dramatically increasing a home's exposure versus off-market or FSBO marketing alone.
Sell My House Working with Real Estate Agents and FSBO 1
What does FSBO stand for in real estate?