For Sale By Owner: A How-To Guide
So you want to sell your home FSBO (For Sale By Owner)? Thats great! There are big advantages to doing so such as being in control of the transaction and saving the money otherwise spent on a real estate agents commission. However, to fully capitalize on those advantages, you need to be aware of a few things. In order to be truly successful and turn the biggest profit from selling your own home, theres a lot that needs to be done.
First of all there are many factors that affect the outcome of selling your own home. Things such as the location of your home, the condition that its in, as well as how its priced and marketed all play vital roles. Additionally, your disposition as a seller and the type of buyer youre looking for matter as well. These are big factors. So before you do anything, its a good idea to put together a checklist of the things that youll need to cover. Heres one that you can use to start with and adjust as needed:
This is the first factor (though not necessarily the most important one) to think about. Location of the home is important in finding a buyer. There are benefits to living in a desirable area, especially when it comes time to pinning down an asking price. If your home is in a good school district or near a big city it gives you some leeway when deciding on a price.
The condition your house is in also plays a big role in how quickly it will sell. Perhaps making some improvements will help drive the asking price for your home. Or, if you choose not to make any improvements you can lower your asking price as appropriate. You may want to ask yourself if improvements are even needed.
3. Find out what the market price is for a house in your neighborhood.
Be careful not to go along with the same asking price as your neighbor since that may not be the fair market value. It will help considerably for you to pay a professional to inspect your home. This may give you a heads-up on what a buyers inspector may say. You may also want to consider hiring an appraiser which will aid in alerting you to any potential problems with the structure. Additionally, they are informed of other factors (such as neighborhood factors) that will determine your asking price. An appraisal will also determine your homes fair market value.
4. Make necessary repairs if you need to.
The repairs dont have to be major overhauls, just obvious things that would otherwise lower your asking price. Be sure to include property disclosures to potential buyers. Even though you are not relying on a realtor to sell your home, you will still need to do this. Property disclosures can be extensive and will include things like how old the house is along with the fixtures in it, and whether there are any problems with them. They will also include things like any structure built that extends past property boundaries (fence, driveway, etc). It will also mention if the house is in an airport flight path, a flood zone, on an earthquake fault, or any other important issues. Even though these may not be mandatory, it should still be furnished.
This is a biggie because you are completely in charge of showing your home. The more you show it, the more opportunities people will have to buy it. If no one sees it, it can sit on the market for a long time. Therefore, you need to be flexible enough with your time to show the property. Put your home for sale on Bargain Homes in the For Sale By Owner section, and place an ad in your local paper. Distribute flyers in your neighborhood. Place FSBO (For Sale By Owner) signage on your property. Have an open house. Prepare ahead of time to spend some money on this. So take this into consideration when you plan out how much money you will actually be saving by going it alone. You can sell your home within a few short weeks if you do this correctly.
6. The Buyer/Seller relationship.
What type of buyer are you and what type of seller are you looking for? Do you need a buyer right away or do you plan to take your time? Its always best to find out in the beginning what type of buyer youre dealing with. Ask them upfront if they have been pre-approved by a lender for a mortgage and if they can buy the house right away or if they need to sell their current home first. If you want to sell your home quickly, it might benefit you to offer financing options. It allows the buyer to work on their terms but it could be more profitable for you.
7. Develop good negotiating skills and use them.
Negotiate with any and all qualified buyers. However, be sure to give yourself some wiggle room. Price your property about 5% more than it needs to be.
8. Cover your bases!
You can now go to any reputable office supply store and purchase a set of real estate sales contracts and disclosure forms. Its crucial to remember all of the paperwork involved in selling your home, as it can be a lot. Be sure you have all contract information, inspection paperwork, etc. It might be wise to hire a good lawyer to ensure that nothing has been overlooked. They will help you stay on top of what needs to be collected, signed and/or filed. Attorneys can also perform escrow functions hold deposits, down payments, and the like. Its probably best not to cut corners on this as not having the proper protection could end up costing more money if things dont go smoothly.
9. Selling your home FSBO can be done, and profitably.
You dont need to rely on a real estate agent and pay them a commission of money that should be yours. Its just important to know from the beginning everything that is entailed in the process of selling your home. You can start with this as a guideline and always remember to ask questions along the way. This can be a lucrative learning experience. Anyone whos looking to sell their home can have a piece of it.