FOR SALE BY OWNER
Is FSBO right for you?
If you've put a lot of work into your home and your house in excellent shape then chances are the home will sell itself, therefore FSBO should be a great match. Another good FSBO scenario is if your home isn't fixed up or not in great condition and you just want to get out of the home for the bare minimum. This situation will appeal to bargain investors, such a people who flip homes to sell or rent.
No matter what your situation is in order to succeed in selling your home on your own you must be flexible. If you have a tight timeline to move then FSBO might not be a good fit. Most real estate agents are incredibly savvy at selling a home quickly, they have a long list of serious buyers who are ready to buy a home, industry connections, great communication, and are smooth talkers with sales. As a Fizbo seller you will need to create a team to fill these shoes. It's a major commitment that will require a lot of time and energy to keep up with the sharks and professionals that make up the real estate industry.
Steps To Sell Home FSBO
1. Prep Your Home
Before listing your house on the market make sure you have it properly prepared so your home will appeal to motivated buyers.
- Fix any repairs, especially those that may not pass FHA appraisal inspections.
- Declutter the entire home, garage and yard. Junk and clutter will prevent the buyer from picturing your home as their own. Go beyond picking up trash, toys, old things, and focus on leaving shelves bare, desks and dressers cleared off, closets nearly empty. This will allow the buyer to see empty shelves and closets and picture what they would put there. They are already making your home their own.
- Pack Up! The best way to show your buyer that you're motivated to sell is having your belongings packed up. We didn't have the luxury of selling our home without anyone living in it because we were buying our new home based on the contingency of selling our current home. It is possible to live in the home while selling it! Packing up almost all of our belongings except the essentials helped us sell our home while we lived in it. We stored the boxes and totes in a storage room in our basement, which turned out to be a great selling point when buyers saw how much stuff we could fit! If you don't have a feasible storage area on your property consider renting a pod or storage unit until you can officially move.
- Thoroughly Clean! A clean home will sell significantly faster than a dirty home. The last thing buyers want to think about is cleaning up after a stranger. Make sure your home is spotless and glowing so you make the impression that you've taken good care of your home.
- Stage Home! After the house has been organized, packed up, and cleaned it's now time to stage the home to create a cozy feeling for the buyer. Using minimal furniture and little decor, stage the home so it has a nice flow that makes sense to the buyer for everyday living. Be sure to position furniture and decor so it makes the rooms look bigger not crammed. For instance hanging smaller artwork or no artwork at all on walls will make the walls look larger and will allow the buyer to think about what they would want to hang on the wall, again subliminally making your house their own.
- No Personal Items! It's an important objective for the buyer to be able to picture your house as their own. It's a major turn off for the buyer to see others personal items and beliefs in a home they want to make their own. Be sure to pack away all of your photo albums, frames, and other personal belongings, including religious items.
2. Take Professional Photos
Now that your home is packed, cleaned, and staged it's time to get some great photos of your investment! It's worth the money to hire a professional photographer to capture all the great assets your home has to offer. It's important to have wide angle lens for your staged home. When we originally uploaded our home for sale online we used photos that we took ourselves but we got a significant amount of more traffic and interest once we uploaded professional photos to our online portfolio for the home.
3. Set Realistic Price
There are many tools available to help you find the price that is right for your situation. You wouldn't be selling your home FSBO if you didn't want to achieve selling your home for the maximum price! It will be important to have evidence to support your pricing point, otherwise buyers could use the Zestimate as a guideline and low ball you. We found that the Zestimate was horribly underpriced for our home, which was something that made it more difficult to sell our home for the price we wanted.
The tool that will help you justify your price the best is paying for an appraisal. Typically the buyer pays for the appraisal, which is ordered by their lender during the closing process because it's very important for banks to confirm that the home is worth the amount of money their lending. Banks will only loan the amount that the house is appraised for, anything more must be accounted for by the buyer. This is where bid wars become tricky during the closing process.
A free solution to help set a realistic price is to order a couple different comp reports of the homes currently on the market and recently sold in your area. You can ask local real estate agents to help you with this. Most real estate agents will jump on this opportunity in hopes that you will convert from FSBO to hiring them as an agent. If you're willing to pay their somewhat hefty fee, usually 6-7% of the selling price, then it may be worth it to have an agent take on the tedious work to find a buyer and help you close on your home. This is a decision you can make once you decide a realistic price for your home and determine how much money you need to make from your investment.
Once you set your price be firm with it but allow wiggle room. What price would you like to get but also what's the lowest you're willing to go? My husband and I turned down 3 low ball offers before going under contract with a buyer who backed out, and finally going under contract with our buyer who ultimately bought the house for what we were asking. Be patient for the right offer to come along and don't cave in to people who low ball. We also learned that every time we changed the price on Zillow it sent out an email notification to the several hundred people who saved our home. This was a great way to promote, but we had to do so delicately as we didn't want to drastically adjust the price of the house.
4. Promotional Gear and Plan
Now that your home is prepped and you have awesome photos it's time to get your promotional gear and establish a plan that works for you to get the word out that your home is for sale!
- Buy a for sale sign that doesn't look cheap and won't fall over. We found that having a sign was important as we got a lot of foot traffic from people driving through our community looking for homes with for sale signs. Having a quality sign that's designed to be durable will be key to establish a professional ambiance. I highly recommend this sign from amazon, it hardly budged and survived the inclement weather during the rough winter season in Buffalo, NY.
|This is an example of a sign that won't hold up well|
- Use your social media platforms to help spread the word that your home is for sale. You can even take out ads on your social media to boost traffic.
- If you live in a community that will benefit from printed flyers, then design informational flyers and place them in strategic places that will generate enough foot traffic to help get the word out. We did not use flyers to help sell our home because it was winter season when we put our house on the market and we found that using the internet was more powerful.
Consider putting an ad in your local paper or magazine.
Promotional points to include in your timeline as you sell your house:
- Coming Soon
- New Listing
- For Sale
- Open House
- Sale Pending
5. Create Description Of Home For Listings
This is your opportunity to highlight all the great assets, upgrades, and renovations your home has to offer. From the headline, opening statement, features, to the closing statement; your description should be concise and avoid any negative or confusing words, like fixer up, needs TLC. Most importantly, make sure your description is proof read by one or two parties since accuracy and professionalism will go a long way appealing to potential buyers. Here's a helpful blog discussing creating real estate descriptions.
6. Get In The MLS
The MLS is a directory of houses on the market that connects real estate agents with buyers. When a home is added to the MLS, through a filtration system it will ping with the buyers who are looking for a similar home, then the real estate agent will connect their clients to the home. Buyers don't get access to the MLS, it's a catalog for real estate agents only to help connect their buyers to the right home. Having a real estate license is the only way to get listed in the MLS. However if you're FSBO you can pay a nominal fee to use a middle man, like forsalebyowner.com, to get your home listed in the MLS. It will cost a couple hundred of dollars depending on the package that's right for you, but it will help sell your home much faster and will weed out serious buyers only.
If you don't get in the MLS you will most likely appeal to buyers who aren't represented by a real estate agent, which is a small pool of home buyers and it could take longer to sell your home. Wishy washy buyers and lookie-lou's usually don't have real estate agents and aren't in a hurry to buy a home.
Just because your buyer has a real estate agent doesn't mean you have to pay any agency fees. You can clarify this with your buyer and the agent, that you're willing to work with buyers agents but you will not be paying any agency fees.
7. List On Zillow and Other Services
Now that you have all of the prep work done it's time to officially put your house on the market by getting listed. While Zillow is the most popular listing site for sellers to directly connect with buyers, there are plenty of other online listing sites that are free or offer services for a nominal fee. If you list your house in the MLS the company you go with may take care of listing on Zillow and other sites for you, another great benefit to getting in the MLS.
8. Open House
Inviting buyers and agents into your home for an open house isn't required but will significantly help on your quest to find the one buyer you need. Here are some helpful tips that we learned along the way.
- Sundays from 1:00-3:00pm are the best day to host an open house but find out when other homes for sale in your neighborhood are having open houses and coordinate yours around their time. When buyers are in the neighborhood they're more likely to hit up all the available open houses that meet their criteria.
- Have a shorter open house as opposed to a longer. A shorter time frame will allow more traffic. The more people that visit your open house all at once the better, especially if buyers are overlapping their tours. This creates a sense of urgency for the buyer to make an offer before someone else does, clearly multiple people are interested in the home.
- Take precautions to protect yourself from people who will take advantage of you opening your home. Do not leave out any personable items, especially of value. You can even ask guests to sign in and check ID if you want to keep track of who is coming into your home.
- Make sure your home is spotless clean and smells good for the open house. Quiet relaxing background music, like this album, can be played to help the buyer feel calm and at ease.
- Promotional Tip! Every time you host an open house an email blast goes out twice to all of the people who have saved your home on Zillow or meet your homes criteria, once you create the open house and the day of the event. This significantly helps with promoting your home and if you're lucky enough Zillow will chose your home to be featured in their open house suggestion email blast or blog.
9. Showing Your Home
During open houses and showings it will be important that you give a clear precise tour that respects the buyers time. Be very descriptive about the perks of the house such as items you upgraded, replaced and/or have extended warranties for the new home owner. Be honest about flaws and imperfections, instead of trying to hide them as most of these imperfections will come out later in the inspection and appraisal, which will then lead to negative negotiations. It's important to make the tour about connecting the buyer to your home! Do not talk about anything personal during the showing, including your family or your plans to move.
10. Negotiations and Going Under Contract
Once a buyer is interested you will receive an offer. An official offer will be in contract format usually after you have spoken and agreed on a price. Don't be surprised if you receive a contract without speaking about the offer first, if you don't like the offer your can counteroffer.
Once you accept an offer you will go under contract and enter sale pending status. From here your real-estate lawyer will help you through the closing process. From the buyers inspection, repair requests, appraisal, and final closing documents.
Waiting in limbo is never easy and takes time, usually 1-3 months to finally close. Be aware that unless it's specified in your contract with the buyer, at this point you don't have to take your house off the market or stop accepting new offers, as there could be a chance the buyers will back out.
11. Closing On The House
Congratulations reaching this milestone in the journey! Wether it was quick or long drawn out, this is the finish line! Now it's time to sign the final closing documents with your lawyer and finalize the contract, receive funds, move, and hand over the keys!
As an accomplished musician she offers voice and piano lessons to aspiring children and adults.