I’m just curious whether this appraisal would reflect the NET that Aecetia pocketed (no realtor fee paid) – or the gross, which he’d have to reduce by the realtor fee.
I suspect the FSBO was a win-win. That Aecetia pocketed more money, and the buyer got a below market price – because no realtor fees were taken out.
But I could be wrong. I’m wrong often and regularly.[/quote]
An appraisal will list the market value.
That means the gross value.
The net is then calculated by subtracting out the seller closing costs (title insurance, comission, repairs, etc).
As a general rule, seller closing costs are between 6 and 9 percent.
Therefore if you sell for 5% under market but pay no seller closing costs (which is not easy) you could have a gross discount and a net benefit.
Lets attach some real numbers.
My friend is selling his house for $510k as a fsbo.
It has a fair market value of $540k-$570k.
His house is free and clear so some of the seller payoff administration costs do not apply.
Therefore his estimated seller costs would be about 7% if he used an agent and followed the common course.
That means a net sale of $502k-$530k with a realtor.
As it stands now, he will pay only about 1% in seller costs.
He will also cover about $5000 in repair costs.
So he will be looking at a max net of about $500,000.
In this case, the discount is costing him between $2k and $30k.
Sometimes fsbos make sense.
Sometimes they do not.
As a general rule, if your agent is not adding legitimate value, then a FSBO makes sense.
