How to Sell a Home as a For Sale by Owner
Selling as a For Sale By Owner, that is without representation, no agent (also known as FSBO), is not terribly difficult if the market is moving fast and inventory is snapped up as soon as it becomes available for sale. However, for most FSBOs, finding buyers is typically a challenge, not to mention, finding a buyer is only the first step, and there is a lot that can go wrong between contract acceptance and closing.
Not every seller is a candidate to sell by owner, but if the market is right, it can make that job a lot easier. The worst that could happen is you will sell for too little, and you might encounter difficulty with negotiations after a home inspection.
Further, not every seller is successful selling as a for sale by owner. For example, The National Association of Realtors reports that the majority of for sale by owners end up listing with a Realtor. Part of the reason is that the majority of home buyers are represented by an agent. Other reasons are because owners who sell by themselves lack the expertise to accurately price a home to sell and often fall short on marketing knowledge and negotiation skills Here are tips on how to do a sale by owner:
How Much a For Sale By Owner's Home Is Worth
- Pricing a home to sell is part intuition, part research, and part market timing. Price within the comparable sales and you should receive immediate offers.
- You can't always depend on an agent's opinion of value because sometimes agents take overpriced listings just to lure your business away from the competitors. In other words, they might say anything to get the listing. Ask a title company to send you comparable sales.
- However, you do not want to fall victim to a seller's biggest mistake and not price your home correctly, because the first two to three weeks on the market is crucial. That's when buyers' interest levels are the highest.
Preparing Your Home to Sell as a For Sale By Owner
Gone are the days of selling homes with unmade beds, dishes in the sink and toys scattered throughout. Today's homes must be spotless and resemble a model home. Make it look like nobody lives there.
- Before you begin to prepare your house for sale, examine the home from a stranger's viewpoint. Ask a friend to help, who might be more removed from your attachment. Ask her to walk through your home and note deficiencies.
- Consider spending money on improvements, fixing things that don't work and making repairs before selling to improve your profit. Don't spend too much money! The single biggest downfall for sellers is spending too much money on repairs that will never be recouped.
- Do not underestimate the power of home staging. It can mean the difference between selling now for more money or not at all. If you cannot afford to hire home stagers, at least get rid of the bulk of your furniture. Most sellers can do without 50% of their stuff.
- Pets in the home present its own set of challenges. It's harder to sell a home where pets live. It is difficult to show with a pet in residence and always separate your pets from buyers during showings.
Marketing Your Home as a For Sale By Owner
With all the money you will be saving over hiring an agent, spend a big chunk on advertising. Figure out your target audience and get the message to them by specific targeting. Today's home buyers are looking on the internet at homes for sale.
- Choose several or all of these house marketing tips, from how to do photographs, limited amounts of print advertising, direct mail, and flyers to hosting tours.
- All marketing should be geared toward making your phone ring and increasing traffic to your home. Remember, you aren't trying to sell the home online, you are trying to get buyers inside.
- Avoid marketing mistakes by being flexible with showings, offering incentives to buyers and obtaining buyer feedback.
- Seasonal sales require unique approaches. The way you would sell in spring is very different than selling in winter. In most parts of the country, April is the best month to put your home on the market.
- If you decide to offer a commission to selling agents, you will want to put a lockbox on your premises for easy access by agents when you are not home.
- Follow these tips on how to hold an open house, and remember that in some areas, Saturdays are just as popular as Sundays. Not every home is suitable for an open house, regardless of what HGTV might lead you to believe. Homes in high traffic areas are excellent.
- Hire a good photographer to shoot a virtual tour. Consider drone photography as well and advertise the virtual tour link in your marketing materials.
- Consider targeting buyer's agents with your marketing and offering additional compensation to lure a buyer's agent to show your home. Remember, most buyers have an agent.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.