For Sale by Owner - 10 Inside Tips
For Selling Your Home Yourself
If you ask anyone
who has ever tried to sell their home themselves
they'll tell you that from the moment the "For Sale
by Owner" (FSBO) sign goes up, the phone begins to ring.
Unfortunately, many of those calls will not be from
prospective buyers, but rather from real estate
agents looking to obtain your listing. Obviously the
idea of not having to pay a commission to a real
estate agent is attractive to any home seller. But
because of all the issues involved in the process,
selling a home on one's own can be challenging as
many home sellers will attest to.
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 a point
where many homeowners become frustrated and consider
giving up their dream of selling their home
themselves. However, there are sellers who
accomplish selling their own homes, very well. You
can be one of them.
This industry report has been especially prepared to
assist home sellers, such as yourself, understand
the elements involved so you, on your own, can sell
your home quickly and for the most amount of profit.
To help you prepare, here are 10 inside tips that
you should be aware of before you make the decision
as to whether or not this is the right approach for
you.
1. Price it Right
Correctly setting your asking price is critical.
Setting your price too high can be as costly as
setting it too low. Home prices are determined by
fluctuations in the marketplace not by your
emotional attachment or by what you feel your home
is worth. In order to establish a realistic price
for your home, objectively compare the price,
features and condition of all similar homes in both
your neighborhood and other similar ones which have
sold in recent months. It is also important for you
to be familiar with the terms of each potential
sale. Terms are often as important as price in
today’s market. Carefully budget your selling costs
and prepare a net proceeds sheet to calculate your
best estimate of what you will take away from your
home sale. Prospective buyers may also request this
kind of analysis of buying costs.
2. Prepare Your Home for Sale
First impression is crucial. Make sure your home
makes a positive statement by carefully inspecting
all details and viewing it through the objective
eyes of a buyer. Don’t gloss over needed repairs and
fix-ups, as your prospective buyers won’t. Your job
is to ensure that your home stands out favorably
from the competition.
3. Prepare Yourself With All Necessary Legal
Documentation
Not surprisingly, there are many important legal
contracts and documents which you must assemble,
complete and understand. A partial checklist of
forms that you will require for prospective buyers
and for legal documentation is as follows:
4. Market Your Home Effectively
Beyond the sign you will put on your lawn, you
should find effective ways to spread the word about
your home. Local buyers can be reached through the
newspaper, but this is only a small part of the
market you are after. Be sure you include the many
buyers who could already be working with a Realtor®.
To locate them, target as many top agents as
possible in your market to see if the criteria of
their buyers matches that of your home's. Because
out-of-town buyers are also an important target, you
should create a strategy to reach these people as
well. Above all, you should be very service minded
and make it easy for pre-qualified buyers to view
your home. Ensure that there is always someone
available to answer the phone, pick up messages
promptly, and be ready to give qualified prospects a
tour of your home as soon as possible.
5. Remain Objective During a 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.
6. Pre-Qualify Your Prospects
Don’t waste your time entertaining buyers who could
never afford your home. Research their financial
steadiness with respect to job security, salary,
debts, liabilities and credit standing.
7. Negotiate Effectively & Knowledgeably
There will be many details to resolve before a sale
can be considered final: price, terms, inspections,
possession date, buyer concerns and objections. Make
sure you fully understand the contract you have
drawn up so you can in turn explain details and
ramifications to the buyer and make any amendments
to the sale that are necessary. The contract you use
should be thoroughly examined by your real estate
attorney. Some real estate brokers may be willing to
help you do this. While this is going on, manage the
buyer’s interest in your home so that it doesn’t
wane during negotiations.
8 . Know Your Buyer
Your objective during negotiations is to control the
pace and set the duration. Try to determine what
your buyer’s motivation is. Does he or she need to
move quickly? Do they have enough money to pay your
asking price? Knowing this information will give you
the advantage in the negotiation because you will
know up front, what you will need to do in order to
get what you want.
9. Don’t Move Out Before You Sell
Studies have shown that it is more difficult to sell
a home that is vacant. It looks forlorn, forgotten,
simply not appealing. It could even cost you money.
If you move, you’re also telling buyers that you
have a new home and are motivated to sell fast which
can, of course, give them an advantage at the
negotiating table.
10. Know Why You're Selling and Keep it to Yourself
The flip side of “understanding your buyer” is to
“understand yourself”. Your reasons for selling will
affect everything from your list price to how much
time and money you will invest in getting your home
ready for sale. Your motivation will help you
determine what is more important to you: the money
you walk away with, the length of time your property
is on the market, or both. Different goals will
dictate different strategies. As someone who wants
to sell without a real estate agent in an effort to
save the commission, it is likely that money is one
of your primary considerations, (see, "How to Assess
You Net Gain" below). Whatever your reasons,
however, it is very important to keep them to
yourself so as not to place yourself at a
disadvantage at the negotiation table. When asked,
simply say your housing needs have changed.
How to Assess Your Net Gain
To analyze whether or not you will end up ahead by
choosing to sell on your own, consider the fact that
most buyers do use a real estate agent because it
doesn’t cost them anything for this service (i.e.
the seller pays the agent’s fee). Be cautious as
buyers, investors and speculators who seek out For
Sale by Owners are typically those in search of a
bargain. The low-ball offers from these types of
buyers will often net you much lower in the long
run. What you will have to judge for yourself is the
following:
1)
Be as prepared as possible with your marketing,
negotiations, evaluations, showings and all
legalities.
2)
Consider what it will cost you to effectively market
your home and assemble all necessary materials from
the “for sale” sign to any contracts.
3)
What price will a buyer offer you as a For Sale by
Owner minus the costs identified in point 2 above.
Is this net price higher than the price an
experienced agent could net for you minus his/her
commission?
