Demystifying For Sale By Owner
Let’s cut to the chase--selling a home by owner can be intimidating. Perceived as a complicated process of marketing, showing, negotiating, inspecting, and signing, there are those homeowners who wouldn’t dream of embarking on the task of selling their home themselves.
Often homeowners mistake the idea of a FSBO (For Sale By Owner) as "saving the commission" when, in reality, you earn the commission. So is selling your house as hard as it seems?
Let’s break down the basics of a For Sale By Owner.
1) Adopt a new perspective.
Breaking down a daunting task into manageable pieces may help make the process appear less overwhelming, so first things first…selling your home is a business transaction!
While the four walls of your home undoubtedly hold an abundance of incredible memories, it’s important to go through a paradigm shift and remove the emotional tug the home has on you.
Take a business-like approach to selling your home in order to maintain clarity throughout the process.
2) Create a to-do list.
Start compiling your "to do" list by scheduling an appointment with a real estate attorney or closing agent, as this may prevent a delay later down the road. The appointment will disclose time critical issues such as termite inspection, well and septic inspections, radon, etc.
Walk outside and take an unbiased view of your home from across the street. You’ve heard it before: curb appeal. It’s true that every home makes a first impression, and you want yours to attract buyers the moment they drive up.
Trim trees and shrubs so that you can clearly see walkways and windows. Power wash the exterior of the house, clean your windows, and touch up any painted surfaces.
3) Freshen up.
Step inside and assess the unique scent that every home has. Find any hidden sources of odor and eliminate them (unless, of course, Fido is the culprit).
Clean your home as you have never cleaned before. Depersonalize and declutter every room. Buyers are attracted to clean, open spaces and they want to be able to envision themselves living in your home. So while the kids’ art is precious, it’s probably better boxed away for displaying at your next home.
Consider asking a friend to come by and give you their honest opinion or hire a professional stager to get your home in tip-top shape. Fix all of those nagging items that have taken up permanent residence on your "honey do" list.
Buyers will notice the leaking faucet, so take time to repair those items or hire a handyman.
4) Set the price.
Now comes the moment where keeping your emotions in check is critical.
We all tend to overvalue our home, particularly if we’ve invested a lot of sweat equity, but this is the time to be realistic.
With the vast amount of information available through internet research, you should be able to get a very good sense of the fair market value of your home. Sites such as MilitaryByOwner, Zillow, and Trulia will provide you with the resources you need to take an in-depth look at the homes in your area to include their amenities and their asking price.
Use the search on MilitaryByOwner to find homes in your zip code with the same number of bedrooms and bathrooms and see how they compare to yours.
While internet sites can give you a ballpark of what homes are valued at in your area, a more accurate assessment is available from a professional appraiser.
An average appraisal can run between $350-500 in most areas. But investing the money ahead of time can save you from finding out at closing that the bank will not lend above the appraised price and will help you price your home competitively.
Asking fair market value for your home will ensure that it will not linger on the market or, on the other side of the spectrum, leave you wondering if you should have set your price higher.
Once you have set a well-researched asking price, it’s time to get the word out. Market your home in every possible way.
You have taken the FSBO path to save money on the commission, but that only happens if the home actually sells. Reinvest some of the money you expect to save and put it toward an aggressive marketing strategy.
6) Your photos matter.
Take a plethora of photos, shot from different perspectives, at various times of day--including pictures taken at night--and then choose the best of the best. Create a slideshow or virtual tour of your home and upload it to YouTube.
7) Your online presence.
Advertise on MilitaryByOwner, utilizing a package that allows you to include photos and a virtual tour link. Place a free ad on Craigslist, Zillow, and Yahoo! Real Estate. Place a classified ad on your local newspaper’s site.
8) Social media.
Share photos and details of your home on your Facebook page, and set your post’s settings to "public." Ask friends to share the information with people they know who may be in the market for a home in your area.
9) Advertise locally and with paid services.
Place "For Sale" signs in your yard and at nearby intersections. Create a professional and detailed flyer including photos and place them in a waterproof container in front of your house for potential buyers to pick up. Post flyers in the housing office of the military installations near you, as well as on billboards at local grocery stores.
Consider the option to list your home on MLS (Multiple Listing Service), the system used by real estate professionals to advertise homes. There is a fee involved in listing it, and if a buyer finds your home on MLS you will be required to pay a commission. Bottom line: have a creative and pervasive marketing strategy.
10) Schedule showings.
Be available to show your home to potential buyers. In a 9-5 world, it isn’t easy to be at someone’s beck and call, but if you don’t show it, it won’t sell.
Enlist the help of family and friends to show the home or ease the burden of the life events that keep you from being available.
11) Get feedback.
Ask potential buyers for their honest feedback. Set out a notebook for them to share what they did and did not like about your home.
This is where separating your emotions comes into play again. You know the drill: you can say something bad about your mom, but if someone else does, your feelings get hurt.
Growing a thick skin and not taking what potential buyers have to say about your home personally can help you to make the changes necessary to get the home sold quickly.
12) Be prepared for paperwork.
Be prepared for your potential buyers by purchasing the state specific forms required to sell your home. MilitaryByOwner makes this easy by offering a Home Sales Package from US Legal Forms.
The paperwork portion of selling your home can be intimidating, so hopefully my own personal experience will help quell this fear. The Offer to Purchase on a home we currently own was written on a cocktail napkin! Of course, we eventually signed official contracts, but the offer and my earnest money were enough to present to our attorney to get the process started.
Due to the intricacy of real estate transactions, you need to employ the services of a closing agent to carry out the legal portion of the transaction.
The parties authorized to perform real estate closings vary from state to state, so consult your current mortgage lender to ask for guidance on whom best to contract for assistance. Establish a relationship with your closing agent prior to receiving offers on the home so that they are prepared to assist with the review of all documents.
Once you receive an Offer to Purchase, which is both exciting and nerve-wracking, it becomes the ultimate game of chess! But before you can call "checkmate," you should make sure that the offer is from a pre-qualified buyer.
Asking to see a Pre-Approval Letter from the potential buyer will save both of you a lot of time and needless negotiating and no, it’s not rude to ask.
Take time to consider the offer and contemplate your counter-offer options through your business-like perspective. Driving away a potential buyer because you are offended that they asked for a carpeting allowance to replace your 1970’s shag is not in your best interest.
Once you’ve agreed upon the terms of the sale, submit all documents to your closing agent.
From this point forward, the agent will assist you with the inspections and documents required for a real estate transaction, such as appraisals, termite inspections, and a title search. Completion of this phase will result in the closing, which will officially transfer the ownership of the property from you to the new owner.
Congratulations! You have successfully sold your home by owner. Now you can sit back and enjoy the fruits of your labor: your proceeds check!
By Monica Schaefer, updated 2018 by Danielle Keech.