For Sale By Owner: A How-To Guide
So you want to sell your home FSBO (For Sale By Owner)? That’s great! There are
big advantages to doing so such as being in control of the transaction and
saving the money otherwise spent on a real estate agent’s commission. However,
to fully capitalize on those advantages, you need to be aware of a few things.
In order to be truly successful and turn the biggest profit from selling your
own home, there’s a lot that needs to be done.
First of all there are many factors that affect the outcome of selling your own
home. Things such as the location of your home, the condition that it’s in, as
well as how it’s priced and marketed all play vital roles. Additionally, your
disposition as a seller and the type of buyer you’re looking for matter as
well. These are big factors. So before you do anything, it’s a good idea to put
together a checklist of the things that you’ll need to cover. Here’s one that
you can use to start with and adjust as needed:
Location
This is the first factor (though not necessarily the most important one)
to think about. Location of the home is important in finding a buyer. There are
benefits to living in a desirable area, especially when it comes time to
pinning down an asking price. If your home is in a good school district or near
a big city it gives you some leeway when deciding on a price.
Condition
The condition your house is in also plays a big role in how quickly it
will sell. Perhaps making some improvements will help drive the asking price
for your home. Or, if you choose not to make any improvements you can lower
your asking price as appropriate. You may want to ask yourself if improvements
are even needed.
Find out what the market price is for a house in your immediate neighborhood
Be careful not to go along with the same asking price as your neighbor
since that may not be the fair market value. It will help considerably for you
to pay a professional to inspect your home. This may give you a heads-up on
what a buyer’s inspector may say. You may also want to consider hiring an
appraiser which will aid in alerting you to any potential problems with the
structure. Additionally, they are informed of other factors (such as
neighborhood factors) that will determine your asking price. An appraisal will
also determine your home’s fair market value.
Make necessary repairs if you need to
The repairs don’t have to be major overhauls, just obvious things that
would otherwise lower your asking price. Be sure to include property
disclosures to potential buyers. Even though you are not relying on a realtor
to sell your home, you will still need to do this. Property disclosures can be
extensive and will include things like how old the house is along with the
fixtures in it, and whether there are any problems with them. They will also
include things like any structure built that extends past property boundaries
(fence, driveway, etc). It will also mention if the house is in an airport
flight path, a flood zone, on an earthquake fault, or any other important
issues. Even though these may not be mandatory, it should still be furnished.
Marketing
This is a biggie because you are completely in charge of showing your
home. The more you show it, the more opportunities people will have to buy it.
If no one sees it, it can sit on the market for a long time. Therefore, you
need to be flexible enough with your time to show the property. Put your home
for sale online and place an ad in
your local paper. Distribute flyers in your neighborhood. Place FSBO (For Sale
By Owner) signage on your property. Have an open house. Prepare ahead of time
to spend some money on this. So take this into consideration when you plan out
how much money you will actually be saving by going it alone. You can sell your
home within a few short weeks if you do this correctly.
The Buyer/Seller relationship
What type of buyer are you and what type of seller are you looking for?
Do you need a buyer right away or do you plan to take your time? It’s always
best to find out in the beginning what type of buyer you’re dealing with. Ask
them upfront if they have been pre-approved by a lender for a mortgage and if
they can buy the house right away or if they need to sell their current home
first. If you want to sell your home quickly, it might benefit you to offer
financing options. It allows the buyer to work on their terms but it could be
more profitable for you.
Develop good negotiating skills and use them
Negotiate with any and all qualified buyers. However, be sure to give
yourself some wiggle room. Price your property about 5% more than it needs to
be.
Cover your bases!
You can now go to any reputable office supply store and purchase a set
of real estate sales contracts and disclosure forms. It’s crucial to remember
all of the paperwork involved in selling your home, as it can be a lot. Be sure
you have all contract information, inspection paperwork, etc. It might be wise
to hire a good lawyer to ensure that nothing has been overlooked. They will
help you stay on top of what needs to be collected, signed and/or filed.
Attorneys can also perform escrow functions – hold deposits, down payments, and
the like. It’s probably best not to cut corners on this as not having the
proper protection could end up costing more money if things don’t go smoothly.
Selling your FSBO home can be done, and profitable
You don’t need to rely on a real estate agent and pay them a commission
of money that should be yours. It’s just important to know from the beginning
everything that is entailed in the process of selling your home. You can start
with this as a guideline and always remember to ask questions along the way.
This can be a lucrative learning experience. Anyone who’s looking to sell their
home can have a piece of it.