Three Points That Will Help a "For Sale by Owner" (FSBO) Sell Their Home in Half the Time

In today’s economy, many homeowners try to enter the real estate market without the help of a broker. As an agent, I have noticed that the main reasons for this may be the price homeowners pay to get their homes sold or simply bad experiences with realtors. Many brokerage firms charge a standard 6% commission, which can turn out to be a lump sum to some homeowners. However, it is important to remember the time and money that homeowners have to invest if they want to sell through for sale by owner.

1. Price your home right

This is the most important part of the process. Be very careful not to overprice your home; overpricing will reduce the buyers’ interest in the property and makes competing homes seem like they are of better value. Overpricing when selling a home is the single biggest reason why many “for sale by owner” (FSBO) home sellers don’t sell their homes successfully.

The best way to price your home is to research the selling price of similar homes that have recently sold in your neighborhood. The easiest way to accurately price your home is to contact your local home appraiser. This will prevent mortgage rejections from happening in the future if you find a potential buyer.

Finally, set your price right under a whole number, such as $349,000 rather than $350,000

2. Market your home correctly

Welcome to the era of the Internet: EXPOSURE, EXPOSURE, EXPOSURE. In today’s market, 92% of buyers search online for their next home. That is in comparison to only 28% looking at print advertisement. We specialize in internet strategies to promote the sale of your home. A couple of places where you could start reaching out to potential buyers are on Zillow.com, ForSaleByOwner.com, FSBO.com, and through social media.

It is very important to write a detailed description of your house, but remember that being simple and to the point is everything. Details like beds/baths, square footage, nearby schools, supermarkets, and your home’s best features are all critical when a buyer is trying to find the perfect fit.

Last but not least, get a yard sign. It is proven that about half the time the person buying your home is referred by a fellow neighbor or friend who lives in the area so make sure everyone in your neighborhood knows you’re selling!

3. Photography and staging

First impression is key. Photography and staging go hand in hand. Make sure that the home’s yard/driveway is uncluttered. Remove parked cars, garbage cans, and bikes. The same thing applies for interior shots. Remember to think of furniture as props and the room as a stage. Take a lot of photos as the more you shoot, the better the odds are that you’ll get some great shots.

You are selling your home. Usually, this is one of your most valuable possessions. It deserves quality. Put some effort into it. It will pay off.

Conclusion

Most “for sale by owners” (FSBO) are willing to cooperate with brokers, usually offering a 3% commission and saving the remaining 3%. The main concern is the time and money a “for sale by owner” (FSBO) has to invest. After paying for advertisement, disrupts family time for showing, keeps the house clean at all hours, hosts open houses every weekend, negotiates with unqualified or bargain-hunting buyers, and finally covers lawyer fees, are “for sale by owners” really saving much? For some homeowners, it is not really worth their time and since 95% of properties are listed with an agent, and 95% of buyers buy something that is listed, it only leaves a “for sale by owner” with a 5% reach. If you played that in Vegas, it wouldn’t be very good odds in today’s market. Happy selling!

For Sale By Owner – The Smart Choice for Independent Sellers

For Sale By Owner is one of the fastest-growing segments of the real estate industry. Also abbreviated as FSBO, this refers to the practice of selling property without the intervention of a broker. Some FSBO sellers do use limited services of a real estate broker for getting their homes listed with a Multiple Listing Service. With the right research and marketing efforts, you can sell your home FSBO and avoid costly broker fees. These real estate broker fees can range between 5% and 10% of the final home price. FSBO selling allows the home owner greater control over the sales and marketing process and brings in buyers who might not be attracted by ordinary real estate listings. Because FSBO sellers are often willing to make arrangements with a buyer, such as a rent to own situation, buyers can negotiate directly with the owner. For Sale By Owner selling accounted for 12-13% of the properties sold in 2005 and 2006.

Marketing your FSBO property is an important part of the selling process. Buyers can’t come to see your house if they don’t know it’s there. The simplest and least expensive method is the yard sign. In areas with hot real estate markets, a yard sign can be enough to bring buyers to your door. Even in slower markets, signs can bring in interested parties in your immediate area.

Next up from the yard sign is the classified ad. This is still inexpensive, and allows you to reach a large number of people easily. Local papers are read by many prospective customers every week. A short ad that runs multiple times will reach more people than a long ad run only a few times. You can announce open houses and other such events with a classified ad, also.

Brochures and bulletin board ads are other good ways to get your house noticed. With the help of a camera and computer, you can produce announcements about your FSBO sale. Many public buildings and workplaces will allow posting of these ads. You can also make brochures available in a container attached to your yard sign. Be sure to keep a few at home so that visitors can remember important information about the house that they have come to see. Home shoppers see many houses in a day, so having a brochure could be the thing that makes your FSBO property stick in their minds and eventually sell.

Another great way to market your For Sale By Owner property is through Internet FSBO sites. These sites allow you to put up details and photos of your house, including dates for open houses and other events. A site like FSBOmarketing.com or one found through a search engine can help you reach a wide range of browsers. Many people in the real estate market now start their house hunt online with a FSBO site. For a small fee, these web sites can improve your exposure dramatically. If you’re comfortable with the sales and negotiating processes, there is no reason at all that you should pay a Realtor to do things that you could very well accomplish on your own. Hot real estate markets can make real estate agents almost irrelevant.

Can a For Sale By Owner (FSBO) Be Successful?

Attempting to sell your home today, on your own, is at best an uphill battle. Understanding the complexities of the market, home pricing, timing, marketing challenges, safety, legal issues and navigating the new TRID, all paint an interesting and challenging scenario for the “For Sale By Owner” (FSBO).

Selling your home on your own in today’s marketplace is akin to winning a championship game without a coach. Can it be done? Possibly. Is it the best you can do? Not Likely.

People desiring to sell their homes on their own typically have their personal reasons for doing so. Usually, it is perceived that one will save money on the sale of their home. While this may appear to be sound thinking at the surface, there are many reasons why this is not necessarily true, especially today. Industry statistics show that a home owner will typically net a higher sale price when utilizing the services of a professional Realtor®.

Let’s start with the TRID. This is an acronym for TILA-RESPA Integrated Disclosure rule. In a nutshell… it replaces the familiar HUD with a whole new level of complex rules and procedures that will affect your transaction. You and your buyer will come face-to-face to TRID at closing time. The scope of this new legislation is far beyond the scope of this article, but there are numerous web resources where one can become better educated as to it’s procedures and requirements. Under more ideal circumstances, your Realtor®, Mortgage Loan Officer and the Closing Attorney navigate these waters for you.

How do FSBOs screen potential buyers? Typically they don’t. Most are so anxious to sell that they open their doors to anyone. Most sellers, if they ask at all, do not understand the difference between loan pre-qualification and pre-approval. They have no idea if their “prospective buyer” is even able to secure a sufficient loan to buy their home. They possibly may not even be who they say they are. Frustrated, many will waste a great deal of time with “window-shoppers and tire-kickers.”

Dealing with home inspections, effectively staging the home, preparing the all-important first impression via the presentation of the exterior of the home and landscaping, and knowing what to say to prospective buyers often are areas that cripple a sale. Furthermore, a seller’s emotional involvement with the sale of their home often has detrimental disadvantages. The home seller usually has too much of an emotional bond to their home to remain objective in negotiations.

Most FSBOs do not understand market pricing and often have their home’s price set higher than it should be. Sellers are frequently under the misconception that the selling price of their home is related to their financial needs or to how much they have invested in their property. Not so! They often will miss that precious four-week window when a home is first introduced to the market because of pricing error, poor staging and other issues. Establishing an accurate selling price for market entry is a skill that professionals well understand but novices lack.

Sellers must also be comfortable communicating directly with buyers, their agents, lawyers, home inspection companies, appraisers and loan companies. This area alone stifles most transactions. There are also numerous ways to make legal mistakes. Contracts have specific deadlines that must be managed effectively or sellers can be held in breach of contract. A Real Estate Contract To Buy is a legal document that contains deadlines, specific instructions, clauses and contingencies that are often difficult to understand for the untrained.

Since FSBOs are extremely vulnerable to so many areas that can halt a transaction, many sellers have the experience of seeing their sale disintegrate at or prior to closing because of failure to manage the legal details of the transaction. In fact, the National Association of Realtors®(NAR) has collected data that shows that less than 10% of all FSBO’s actually sell their property that way. Less than 1% of all home sales are FSBOs.

Unless the homeowner is fully prepared for the reality of selling their home on their own, many may quickly realize the need for a trusted professional partner, a Realtor®, who will effectively market their home in a variety of mediums, providing maximum exposure, show it to prospective, well-qualified buyers, negotiate the purchase contract, suggest financing and closing attorneys, oversee the inspections, handle all necessary legal paperwork and monitor the closing. Your Listing Agent can take care of everything you need, from start to close and communicate with you throughout the process.

Is hiring a professional Realtor® to represent your best interests a good idea? You be the judge.