Thinking About For Sale by Owner (FSBO)?
Here’s The Pros and Cons!
Tips for FSBO’s
There are many things to consider when selling your own home (FSBO). Before you decide to take on this endeavor get educated in the process. Know the people who will be involved in this transaction, be aware of the current market, understand legal ramifications and identify your marketing plan.
Here are steps to consider if you decide to sell your home with out the aid of a Real Estate Agent:
Get an education of the current market
The real estate market is in constant flux. Know if you are in a buyer’s market or a seller’s market. Make sure you researched closed properties and not just assume that your neighbors have their house on the market for a certain price and you can also get that price. Active properties are just someone’s wish list and closed properties are what really matter.
Stage and price your home to sell!
When pricing your home we all as homeowners think our homes are worth more than they really are. Maybe you put in some new light fixtures, fixed some plumbing issues, painted, or updated your kitchen and baths. Be sure you understand the difference between home improvements that add value and home maintenance. Make necessary home repairs, do a deep clean, and de-clutter your home. Even small maintenance projects matter. Let your buyers see that the home was not neglected and well maintained. Upfront preparation can go a long way to ensure top dollar and a speedy sale.
Hiring a professional home staging expert will go a long way to ensure a quick sale, get you the best possible price and outshine your competition. Most importantly don’t over price you house!
Set Aside A Marketing Budget
So you have done your homework and your home is ready to be sold. Define your marketing budget and tell the world about it with a well thought out marketing plan. You want to attract the largest number of buyers possible and increase the traffic and showings to your home.
Simply putting a professionally made sign in your yard and an ad in the local paper will not be sufficient to get the desired results.
Today’s buyer’s start their home search on the internet.
Make sure you have exposed your home to the online buyers on all the major sites including social media. Do you have a large network and sphere of influence to market to? Perhaps have your own domain name and website so you can capture contact information of potential buyers and reach out to them.
Make sure you have hired a professional photographer and create a professional floor plan.
Make a home video and upload it to Vimeo and YouTube. Be sure your flyers are colorful and your copy is well written. There are online graphics that you can use for this. Put ads in local newspapers and magazines, mail announcement cards to neighbors, friends and business contacts.
Make sure your open houses are well advertised. Follow-up quickly on any leads! Today’s buyers expect instant contact. Don’t wait a day or even a few hours to respond. Track and analyze your marketing efforts to see which ones work the best so you don’t waste your marketing dollars.
Know the Laws!
After the marketing is done and potential buyers are calling to preview your home, make sure you are readily available to show the property. Many buyers are out looking at multiple properties and if you are not available to show the property when it is convenient for them, many do not reschedule the showing. You must be available 7 days a week to answer calls and show the home. I cannot stress enough how important it is to be available.
There have been studies done by the board of realtors that asked “what was the most important thing you look for in a realtor?” You would think it would be “knowledgeable, ethical, and hard- working” but it was the speed in which they followed up that mattered most! Follow up with buyers and ask for feedback. Don’t be offended and don’t take it personally. It can be hard to listen to the feedback. Try not to get emotional. This is a business transaction.
Get All The Documents
Obtain all the forms, documents, and disclosures, and lead pamphlets required.
Hire a real estate attorney to guide you through this process but be aware that hiring an attorney as an agent is more expensive than hiring one to work with you as a closing attorney.
No one wants to get sued over seller disclosures, fraud, negligence or breach of contract. Be aware of your states laws, regulations and ethics.
Qualified Or Not?
Make sure the potential buyers are pre-approved. Understand the difference between pre-approved and pre-qualified.
You will find leaving work or a special event to show your home will be very time consuming. When a home is on the market it draws in curious neighbors and people that are not serious buyers. Your time is important and so is your safety. If someone is pre-qualified a credit check was run on them and it there is a good chance they are good buyers.
Prepare To Negotiate
Be prepared for types of buyers that are attracted to For Sale By Owners. Understand the psychology of this so you are prepared to negotiate on your behalf. It is common for sellers to think that they will pocket the 6 percent commission but it rarely happens. Most buyers immediately lower their offer by 6% because you do not have the expense of a professional agent. Be aware that there are many aspects of a contract that you need to negotiate besides the price. There will be other contingencies like dates, appraisal issues, inspection issues etc. Learn the in’s and out’s.
The majority of lookers are honest people looking for a home but FSBO’s and Open Houses can be targets for some criminals. Never show your home alone. Put all valuables, important paperwork and medications in a safe place. Keep your cell phone on you at all times and always be near an exit door. Ask for identification and a pre-approval letter before a showing.
What’s The Downside You Ask?
Keep in mind that relocation companies will only work with approved real estate agents so you will miss out on some potential buyers here.
Agents may not work with you even if you offer a commission because they know they will be doing twice the amount of work and there is a chance they won’t get paid at all.
The other downfall is that buyers will immediately lower the price 6% knowing you don’t have to pay a commission. If buyer has hired a buyers agent to represent them and they want to make an offer on a FSBO the buyer will be responsible to pay the commission fee if none is offered by the FSBO. This is a deterrent and the buyer may bypass your property and purchase one listed with an agency that will pay the fee.
True Confessions Of A Realtor Gone FSBO!
Yes, I am a professional realtor that co-owned an out of state property. My ex insisted that we sell the home ourselves and “save the commission”. I wanted to hire a local agent knowing all too well the pros and cons of selling without an agent. He insisted we try FSBO before listing with a broker. I marketed the house the best I could with limited funds and spent way too much time driving there to show the property. Most of the buyers were tire kickers and just curious.
We got two low “verbal offers” which meant nothing. I knew the value of the home of course. After months on the market we had a tired listing. No one was interested and we watched homes sell all around us. I convinced the court that we must list the home with an agent. Two days after listing we sold the house 110k over the price of the last 2 offers. Boom done! I had to pay 35k in commission but I gained that and more in the sale price. It happens every time.
If you have any questions or need advice, please don’t hesitate to ask. Contact me! I am happy to help.
If you need to search for properties and are tired of finding that homes on the big realtor sites are already sold, use my property search. It is live, accurate and there is no obligation!
Additional Resources Include:
What is Dual Agency: Why Buyers & Sellers Should Avoid it! via Bill Gassett
4 Tips To Get Your Home Sold Fast! via Wendy Weir
Why Every Home Buyer Needs A Mortgage Pre-Approval. via Paul Sian
8 Tips For Selling a Luxury Home. via Kyle Hiscock
Real Estate information was provided by Eileen Anderson, a recognized leader in her field. Eileen can be reached via email at Eileen@eileenandersonrealtor.com or by phone at 860-966-2112. Eileen has helped people move in and out of many Connecticut towns since 2000.
Thinking of selling your home? I love Real Estate, sharing my knowledge and helping people find the home of their dreams!
I am licensed for residential real estate sales in the state of Connecticut including but not limited to the following CT towns: Avon, Bloomfield, Burlington, Barkhamsted, Canton, Colebrook, East Granby, Hartland, Hartford, Suffield, Windsor, New Hartford, North Granby, Farmington, Simsbury, Suffield and West Hartford, CT.