You’ve decided to sell your home--and you’ve chosen to sell it by owner. You might be asking yourself if you’re crazy, but I’ll go ahead and answer: no, you’re not!
A For Sale By Owner ("FSBO") is a lot of work, yes, but many people have gone before you and shared their FSBO experience, so you can rest assured you’ll have some guidance. If this is your first FSBO, you likely have a lot of questions. The process can seem complicated and overwhelming, but it doesn’t need to be!
Following are answers to 4 of MilitaryByOwner’s most frequently asked FSBO questions.
1) How do I prepare myself and my home for a For Sale By Owner?
Preparing your home to sell is more than tidying up!
Make repairs and cosmetic changes. Your first priority is to ensure that your home can pass a home inspection by repairing issues such as structural problems, HVAC, or other issues that affect the function of the home itself. Then consider touching up the paint, replacing worn flooring, and updating the landscaping.
You may even think about putting unnecessary items in storage. Not only will it make repairs easier, but it will also eliminate clutter--making your space look larger to potential buyers.
Take photos and stage. Once you’ve staged your home--the clutter is gone, the house is clean, curtains are down, and natural light is flooding in--take photos of your home.
Although you are doing a FSBO to save money, hiring a professional photographer might be in your best interest. Your photos are going to make the first impression and buyers will decide if they want to come see your house based on photos alone.
Gather paperwork. In the simplest form, selling a home is a transaction. And you’ll need to have proper documentation to make the sale.
Start collecting paperwork like property assessments and surveys, declarations, covenants, or deed restrictions. Include pest or environmental inspection results, billing statements from property taxes and utilities, and receipts from household maintenance, repairs, and upgrades.
This paperwork will answer questions potential buyers might have and convey that you have taken good care of the home during your time there.
Budget for home selling fees. Although you are doing a FSBO to save money, there are some inevitable fees involved with a home sale that you need to think about. Be prepared for legal fees, broker fees from the buyer’s agent, and taxes on capital gains.
Additionally, be aware of possible fees from the escrow company, a mortgage appraisal, the termite inspection and/or home appraisal, the property transfer or transfer tax, the homeowners insurance or home warranty, the title insurance, along with any other costs at closing.
2) How do I set a price for my home?
Placing a monetary value on your home can be difficult. It’s challenging to set aside your emotions and the memories your family shared in the space to determine the unbiased value of your home.
The process starts by following the steps listed below.
- Review comparable listings and sales in your desired locations.
- Determine how your local housing market is trending.
- Calculate your home’s cost per square foot.
- MilitaryByOwner’s e-book, For Sale By Owner: Is It an Option for You? offers in-depth strategies on how to start the research for pricing your home.
But finding your home’s value doesn’t stop there.
- Consider a professional home appraisal to know exactly how much buyers will need to borrow.
- The Journal of Housing Research still recommends pricing under whole numbers. For example, use $299,000 instead of $300,000.
- Understand online real estate searches. If the home is priced at $310,000, buyers who are interested in spending $300,000 and under may not consider the extra $10,000 for negotiation room.
- You also need to consider additional factors like location, condition, upgrades, and layout as you discuss setting a price.
Even after deciding on a price for your home, it’s important to build in some flexibility. For example, you might need to adjust the price as your home sits on the market, or if you have to move soon and don’t have the ability to let it sit. And if the market changes, you’ll have to change your price to remain competitive, too.
The key is to research and be flexible as outside factors affect your price.
3) How do I prepare my home for showings?
Although it will take some work, getting your home ready for showings or an open house is fairly simple and requires learning how to stage your home.
Clean and organize. Rent a storage unit and remove all non-essential items from your home. Then consider hiring a cleaning crew to thoroughly remove dirt and grime built up over time. You can do this yourself, of course, but a professional team will likely catch things you might miss.
Depersonalize. Remove or hide personal items like prescription bottles, mail, etc.
Style. Many buyers today look for turnkey homes. Put a fresh coat of neutral paint on walls and replace outdated hardware throughout the home.
Brighten the space. Remove heavy curtains and let that natural light in to make your space feel more open.
Create curb appeal. You want to make a good first impression on buyers when they drive up to your house. So remove and replace dead plants, trim up the yard, and consider touching up worn paint.
After your stage your home, there are a few things you can specifically do for open house days.
- Have a sign-in sheet for everyone who comes through the house to make it easier to follow up or notify of a price change.
- Remove pets and all evidence of pets for the day.
- Make your home welcoming with all the lights on, fresh flowers, and even a plateful of cookies. Remove personal items and photos. Prospective buyers will want to envision themselves in the home.
- Promote! Don’t forget signage, posting on social media, and your MilitaryByOwner ad.
Finally, dress professionally and be prepared to answer any questions your potential buyers may have about the house or the area in general.
4) Do you have any tips for negotiating a home sale?
In a For Sale By Owner, you are negotiating directly with the buyer or their agent. Generally, you should aim to be relaxed and exude confidence. Think about your posture and your body language. What do you want to nonverbally communicate to your buyers?
Limit chatter. Let your nonverbals do most of the speaking. Your buyers don’t need to know that you have orders to PCS and you’re working on a tight time frame. Keeping small talk to a minimum will ensure you don’t disclose information that could harm your sale.
Investigate financing. Know what your buyer is pre-qualified for. This will help you weed out people that can’t afford your home and give you some purchasing power. It’s also important to keep your own finances in mind. As you get into counter offers, know your limits and how little your willing to accept.
Counter. There’s no real estate agent to buffer your emotional reaction, so set your emotions aside. Don’t take low-ball offers personally, as the buyer is simply getting a feel for how flexible you are. Understand that they don’t see the emotional value in the home that you do. Instead, counter their offer with something more reasonable.
Also consider narrowing the window. For example, move the counter offer expiration from three days to two. This will help eliminate buyers who aren’t serious about your property.
Although these questions only cover a portion of the FSBO process, MilitaryByOwner is here to help answer any additional questions you have. In fact, you can read about more frequently asked questions in our free FSBO FAQ’s ebook.
We provide guidance to help you learn how to market and show your home, as well as resources to help you hire real estate professionals and gather legal paperwork. Every step of the way, MilitaryByOwner is committed to helping you you have a successful FSBO!
By Danielle Keech