8 Insider Tips to Selling Your House
There are many reasons that people choose to go the FSBO route when selling their homes. FSBO means ‘For Sale by Owner’ in the world of real estate. It sounds like ‘fizbo’ when said aloud, and the concept most definitely has some serious pros.
With the recent appreciation in home prices, now might be a good time to sell your home. But which is the smarter way to do it, hire a real estate agent or list it yourself?
For someone experienced in the purchase, sale and marketing of a home, selling a home as a FSBO makes good financial sense. On the flip side, for someone who is inexperienced in marketing and real estate, or who is short on time, the FSBO route could cost the seller a great deal of time and money. Making a mistake in pricing, marketing, legal compliance or paperwork can have serious repercussions, both financial and legal.
How common are FSBO listings? FSBO listings are more common today than in 2007, thanks to consumer-facing listing platforms such as Zillow and easier access to the Multiple Listing Service (MLS) for non-agents.
But FSBO is no walk in the park. A 2017 Zillow report found that 36% of homeowners attempt to sell their homes without an agent, but only 11% actually complete sales themselves. In other words, more than two-thirds of sellers who try FSBO are not able to sell their home.
Many Real Estate Agents are protective of our “top secret” selling techniques, but I am not your average agent. I would like to help you go the FSBO route if that is your desire. I have created a guide with tips on how to sell your house by owner. In this guide, I map out how to price and prepare your home, the showing process, and what to expect at closing. As always, if you get into this and decide a real estate agent is the way you would like to go, please call me anytime.
The key is to be properly prepared. If you are not, your home could remain on the market longer than you expect because you are not attracting and getting offers from qualified buyers. This can be the point where many homeowners become frustrated and consider giving up their dream of selling their home themselves. However, keep in mind that there are sellers who successfully accomplish selling their own homes. You can be one of them!
I also include an industry report that has been especially prepared to assist home sellers such as yourself in understanding the elements involved so that you, on your own, can sell your home quickly and for the most amount of profit. To help you prepare, I am giving you now 8 insider tips that you should be aware of before making the decision to sell your home by yourself.
Tip #1. Market Timing
There are a couple of aspects to timing that should be understood; one is that there are better times than others to put a property on the market (such as seasonal variations), and these will depend on the specific area the property is in.
Secondly, there is a concept of “golden time” that says a property will receive bigger offers within the first week of going on the market and go down after that.
FSBO sales can fail when the house sits for too long on the market (perhaps because the owner doesn’t have a lot of time to deal with marketing or negotiations), and they then receive lower offers than they should.
Tip #2. Establishing the Listing Price
The price of your home is one of the most important factor in determining how quickly your home will sell. If it is priced too high you may never sell it, and if it is too low, you may lose money.
To be honest, the biggest mistake people make when trying to sell their home without a Real Estate Agent is found in the price. People over price their homes all the time and this keeps potential buyers from offering. If you want to sell your house, you need to price it appropriately.
Unfortunately, what you bought your home for and what you have invested in your home does not determine the value. The current market determines what the selling price should be, and this means you need to consider what similar homes in your area have recently sold for.
If you want an idea of where to start on pricing your home, give me a call. At no charge and with no strings attached, I can help you figure out what your current market value is based on current market conditions.
The condition of your home plays a big roll on the price as well. If there are several minor things that need to be repaired, expect lower offers. If you want to maximize your selling potential, address as many minor repairs as needed.
If there are larger repairs that could be made, such as windows, a leak in the roof, problems with the central air, or sump pump problems, fix what you can. Any offer you receive will more than likely be contingent on inspection and the potential buyers will more than likely ask for a price reduction or repair if it is significant. Keep in mind that making some repairs might be require by the appraiser prior to closing.
Tip #3. Property Preparation
Take a deep breath, because you’re going to need it. Pricing is tough, but the next part is really time-consuming and a bit nerve wracking to be quite honest. There are several steps that you need to take in order to prepare your property for showing. The time-consuming part is why I suggest that you give yourself a little stint between actually deciding to sell and putting a sign out front.
Tip #4. Showings and Open Houses
Before you show your home, make sure you create an inviting atmosphere. Turn on all of the lights, keep all of the interior doors open, and open blinds or curtains. Have your children at a neighbor’s house, friend’s house or with family so that the buyers focus on your home and not on your kids.
Also, make sure pets are secure as a potential buyer could see them as a nuisance with excessive noise. Some people are afraid of dogs and allergic to cats. Keep this in mind when showing your home. Cleanliness is of utmost importance and so is the lack of clutter. The smell of your home can be very important too. Make sure litter boxes are clean and the trash has been taken out. Get some potpourri or a nice smelling candle. Make sure it is not too strong and it is a light and pleasant scent. The smell of fresh baked bread or cookies can definitely help too.
Buyers need to feel comfortable and free to look around. From my experience as a real estate agent, nothing is more uncomfortable for a buyer than a seller who won’t stop talking and let them look at the property.
Buyers need to have time to look at the features of the home, think, and determine whether or not the home fits their needs. They can’t do that if there is a constant distraction of someone following them around and talking. The buyers won’t feel free to talk among themselves about the features, pricing and so on. Don’t try to sell the features of the home. Unlike a real estate agent, you don’t have the inside scoop on the buyer’s likes, dislikes, or what their needs are, so you might unintentionally try to sell them on a feature that is not important to them. Let your home sell itself.
Just be there to open the door, be inviting and answer any questions the buyer may have. If they ask you to accompany them while they view your home, feel free to.
Buyers might stay longer than expected to ask questions and to try to get additional information from you. If you begin to build a good rapport with the buyers, that’s great. Just remember, don’t give too much information about yourself; especially when it comes to your own home buying situation. You could possibly ruin your negotiating power if you share too much. Savvy buyers will try to learn as much about you as possible in order to help themselves in the negotiating process. They will more than likely ask why you’re moving, how motivated you are to sell or how willing you are to negotiate. If answered incorrectly, these questions can ruin your ability to negotiate price later. Remember, the less personal info you give them, the more power you have to negotiate. Be friendly, but be careful in your conversations. You need to protect your own interest.
DO NOT discuss price other than the asking price. Negotiating price and terms should be done in written purchase agreements, not casual conversation. If they ask or bring up price, simply let them know you are open to offers. Keep in mind, some buyers choose sellers who don’t use real estate agents because they think they can manipulate the seller to a lower price due to lack of experience.
Tip #5. Remain Objective During the Showing of Your Home
Keep emotion out of the sale of your home, and the best way to do this during a showing is to remain physically in the background. If a prospective buyer says something negative about your home, it is better to counter-balance this point of view by illustrating the positives rather than becoming defensive. Many buyers won’t be comfortable making comments with the homeowner present.
Tip #6. Pre-qualify your Prospects
Don’t waste your time entertaining buyers who could never afford your home. It is a big time-waster, and the experience of showing your home to unqualified buyers can be very frustrating.
Research their financial steadiness with respect to job security, salary, debts, liabilities and credit standing. Prequalify buyers before you spend time showing your house to any of them.
Tip #7. Negotiate Terms and Price
To avoid wasting valuable marketing time, only negotiate price and terms with someone who can provide you with a pre-qualification letter. Most lenders can pre-qualify someone in a few hours. If the potential buyer is serious, they will be able to get this to you. If you are dealing with a cash buyer, they should be able to provide you with proof of funds such as a letter from their bank or bank statement.
Conflict between the buying and selling side are quite common in a real estate transaction especially if you decide not to use an agent. The buyer obviously wants the lowest price possible and you obviously want the highest price possible for your home. The information listed below should help reduce the amount of possible conflict you may experience during the sale of your home.
Tip #8. Close the Deal
During the closing, you will meet with your buyer and other necessary parties, such as your attorney, to transfer the ownership of your property. Sometimes closing is also referred to as a settlement. All paperwork is signed, agreements completed, and details finalized at the closing. Normally, the whole transaction takes about an hour.
Exactly where and how your closing will take place simply depends on the customs used where you live. Quite often, the closing takes place at the closing agent’s office. Make sure to stay in touch with this agent to make 100% certain that your sell doesn’t get off track.
There shouldn’t be any surprises at the closing. All expected costs should already have been covered and put into writing between you and the buyer.
Ready to hire a professional?
While doing the work yourself can save you the significant commission rates many real estate agents command, for many, flying solo may not be the way to go–and could end up being more costly than a realtor’s commission in the long run. Buying or selling a home is a major financial (and emotional) undertaking.
Better Access/More Convenience
A real estate agent’s full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents. Both the buyer’s and seller’s agent work full time as real estate agents and they know what needs to be done to get a deal together.
Negotiating Is Tricky Business
Many people don’t like the idea of doing a real estate deal through an agent and feel that direct negotiation between buyers and sellers is more transparent and allows the parties to better look after their own best interests. This is probably true–assuming that both the buyer and seller in a given transaction are reasonable people who are able to get along. Unfortunately, this isn’t always an easy relationship.
Contracts Can Be Hard To Handle
If you decide to buy or sell a home, the offer to purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren’t met.
Below are some of the most frequently asked questions I receive.
ARE THERE CLOSING COSTS IF I SELL A HOME WITHOUT A REAL ESTATE AGENT?
Yes, there are other factors that go into closing costs outside of a real estate agent’s commission. Closing costs and fees will be around 2 to 5% of the house purchase price.
HOW DO I SELL MY HOUSE WITHOUT A REAL ESTATE AGENT?
Below are the steps you will need to take to go the For Sale By Owner (FSBO) route.
1. Make sure the market is right
2. Determine your listing price
3. Prepare your property for showing
4. Be available for showings and open houses
5. Keep emotion out of the sale of your home
6. Pre-qualify your prospects
7. Negotiate the terms and the selling price
8. Close the deal
You can find a more detailed explanation for all steps above in my blog article.
WHAT DOES FSBO MEAN?
FSBO means ‘For Sale by Owner’ in the world of real estate. It sounds like ‘fizbo’ when said aloud, and the concept most definitely has some serious pros.
WILL IT BE DIFFICULT TO SELL MY HOUSE WITHOUT A REAL ESTATE AGENT?
Selling your home without a real estate agent can be difficult. A 2017 Zillow report found that 36% of homeowners attempt to sell their homes without an agent, but only 11% actually complete sales themselves. In other words, more than two-thirds of sellers who try to sell without a real estate agent are not able to sell their home.
Selling your house by owner can be done but it is important to make sure that you go in “eyes wide open” so that you are properly prepared and do not have any surprises, whether personal or financial.
If you would like a free copy of my 19 page FBSO guide or have questions about the selling process please contact me today.
Did this blog post help clear up any questions you may have on selling your house by owner? Please let me know by commenting below.