FSBO – What You Should Know About Selling Your Own Home

The key to selling your home yourself is being properly prepared. If you aren’t, your home may remain on the market longer than you expect because you aren’t attracting and getting offers from qualified buyers. And this is where many homeowners become frustrated and start to think about giving up the dream of selling their homes themselves. However, some sellers are very successful at selling their own homes, and you can be one of them.

This report has been especially prepared to assist home sellers like yourself understand the process so you can sell your home quickly and for the price you want. To help you prepare, be aware of the following tips before deciding whether or not this is the right approach for you.

  1. Price your home correctly. Setting the correct asking price is critical. Setting the price too high can be as bad as setting it too low. Home prices are determined by fluctuations in the marketplace, and not by your emotional attachment to your home or what you think your home is worth. To establish a realistic price, compare the price, features, and condition of similar homes in both your neighbourhood and locations where similar homes have sold in the last few months. It is also important to be familiar with the terms of each potential sale. Terms are often as important as price in the current market. Work up a careful budget of your selling costs, and prepare a net proceeds sheet to determine an informed estimate of what you can expect to earn from the sale of your home. Prospective buyers may request a similar analysis of buying costs.
  2. Prepare your home for sale. First impressions are crucial. Ensure that your home makes a positive statement by carefully inspecting all details and viewing it, as objectively as possible, through the eyes of a buyer. Don’t ignore needed repairs and fix-ups: your prospective buyers certainly won’t! Your job is to make sure your home stands out favourably from the competition.
  3. Make sure you have all the necessary legal documentation. There are many important legal contracts and documents which you need to assemble, complete, and understand when selling your home. Below is a partial checklist of forms you will need for prospective buyers and for legal documentation.
    • Mortgage Payoff
    • Loan Application
    • Deposit Receipt
    • Property Profile Fact Sheet
    • Buyer’s Cost Sheet
    • Closing & Settlement
    • Personal Property
    • Exclusion List
    • Property Survey
    • Sellers Statement /Plot Plan of Representation
  4. Market Your Home Effectively. Beyond the sign on your lawn, you need to find effective ways to spread the word that your home is for sale. You can reach local buyers with ads in a newspaper, but you will reach just a small part of the possible market. Be sure to include buyers who may already be working with a realtor. To locate them, notify as many top agents as possible in your market in case their client’s criteria match what your home has to offer. Out-of-town buyers are an important target too, so create a strategy to reach them as well. Above all, be very customer service oriented and make it easy for pre-qualified buyers to view your home. That means making sure that someone is always available to answer the phone, respond promptly to messages, and be ready to give qualified prospects a tour of your home as quickly as possible.
  5. Remain objective when showing your home. Be sure to keep your emotions out of the sale of your home. The best way to do this during a showing is to remain physically in the background. If a prospective buyer says something negative about your home, you’re better off counter-balancing this point of view by calling attention to the positives instead of becoming defensive.
  6. Pre-qualify prospective buyers. Don’t waste time entertaining buyers who cannot afford to buy your home. Research their financial situation with respect to job security, salary, debts, liabilities and credit standing.
  7. Negotiate effectively and knowledgeably. There are a great many details that need to be resolved before a sale is considered final: price, terms, inspections, possession date, and buyer concerns and objections, to name a few. You must fully understand the contract you have drawn up so you can, in turn, explain the details and ramifications to the buyer, and make any necessary amendments to the sale. Have the contract you use thoroughly examined by your real estate attorney. Some real estate brokers may be willing to help you do this. While this is going on, work to maintain the buyer’s interest in your home so it doesn’t wane during negotiations.
  8. Know your buyer. Your objective during negotiations is to control the pace and set the duration. Try to determine what’s motivating potential buyers. Do they need to move quickly? Can they afford to pay the asking price for your home? Answering these questions will give you an advantage in the negotiations: you’ll know what you need to do to get what you want.
  9. Do not move out before you sell. Studies show that selling a vacant home is more difficult than selling one that is occupied. A vacant home looks forlorn, forgotten, and simply unappealing. And it could even cost you money. If you move out before you sell, you’re also letting prospective buyers know that you have a new home and are motivated to sell quickly. That can, of course, give the buyer an advantage at the negotiating table.
  10. Understand why you’re selling, but keep your reasons to yourself. Just as important as understanding your buyer is understanding yourself. Your reasons for selling can affect everything from how you price your home to how much time and money you invest in preparing it for sale. And knowing your motivation helps you determine your priorities: the money you walk away with, how long your property is on the market, or perhaps both. Different goals dictate different strategies. Someone who prefers to sell without a real estate agent to save the commission would indicate that money is a primary considerations (see “How to Assess Your Net Gain” below). Whatever your reasons may be, it is very important to keep them to yourself so you don’t put yourself at a disadvantage during negotiations. If anyone asks why you’re selling, simply tell them that your housing needs have changed.

How to Assess Your Net Gain

To find out whether or not you’ll come out ahead by selling your home yourself, consider that most buyers use real estate agents because it doesn’t cost them anything (the seller pays the agent’s fee). Be cautious: buyers, investors, and speculators who seek out For Sale by Owner properties are usually in search of a bargain. Low-ball offers from these buyers will usually net you a lot less in the long run. Determine for yourself the following:

  1. You need to be as prepared as possible with your marketing, negotiations, evaluations, showings, and all legal matters.
  2. Calculate what it will cost you to effectively market your home and put together all the necessary materials, from the “For Sale” sign to the contracts.
  3. What price will a buyer offer you as a For Sale by Owner, minus the costs identified in number 2 above? Is this net amount higher or lower than the price an experienced agent could net for you minus his/her commission?

The FSBO Seller’s Top Ten Tips For Selling Their Home For Sale By Owner

If you’re considering selling your home by owner, congratulations! You’re part of a growing trend toward FSBO property sales. If you’re worried that going the FSBO seller route means that you’ll miss out on all of those great agency sales tactics, you’re wrong. You can do the same things that any real estate agent would suggest. To get you started, here’s a list of the top ten things you can do for your home when you’re trying to sell your home by owner.

1. Create multiple means of exposure. Houses sell when they’re exposed to potential buyers. The more exposure you create, the more likely you are to sell. “Multiple means of exposure” means listing it on a FSBO site, providing pictures, tours, and information buyers want to know. Advertise your home in the newspaper. Print flyers that list the details of your home and be available to show home. Some buyers have turned to television ads for sale on real estate channels to attract buyers. The more exposure you provide, the easier it is for potential buyers to find.

2. De-clutter rooms and closets. A home looks nicer and shows better when it isn’t cluttered. Remove magazines, books, furniture, stored items and things you no longer want. You’ll have to pack all of this stuff before you move, so why not get an early start?

3. Fix peeling paint and other minor imperfections. Peeling paint can be a sign of deferred maintenance, bad painting or water damage. All of these things will turn off a buyer. Putting a fresh coat of paint on your walls and ceilings is easy and inexpensive.

4. Consider staging and research some ideas on the internet. Staging involves making your home visually attractive to potential buyers. It may involve re-arranging the furniture, renting new furniture, repainting, re-carpeting or minor redecoration to show off your home’s best qualities. Staging doesn’t have to break the bank, but a home that shows well sells. Whatever you can do to improve the look of your home will help your buyer see its potential.

5. Price the home right. Check recent sales in your neighborhood for an idea of what your home is worth. Do not overprice your home because if your price is substantially higher than other homes in your neighborhood. You will not be able to sell because overpriced homes whether Fsbo or MLS do not sell. Buyers want to feel as though they’re getting value for their money. If your home is the most expensive one in the area, buyers will focus on finding a comparable home that’s priced lower than yours.

6. Always have a yard sign and flyers. When potential buyers visit your neighborhood to see a particular home, they’ll look for other homes that are for sale. If visitors don’t know your home is for sale, you may miss potential sale opportunities.

7. Fsbo sellers need to create an online listing for their home on the internet and may consider using the FSBO marketing services that are available on the web. The key to selling your home is proper exposure and your chances of finding a buyer are greater when you make it highly visible to potential buyers.

8. Answering your phone is paramount as a Fsbo seller. It sounds simple, but many people who are selling their homes Fsbo miss potential buyers who are calling to inquire. Make absolutely certain you or someone else is available to take calls. Don’t assume that an answering machine or voice mail service is sufficient because many potential buyers won’t leave a message when they call.

9. Spend some time on landscaping. Making the outside of a home look appealing and fresh is just as important as making the inside look nice. Remove or trim bushes. In the summer, plant attractive flowers, cover beds with wood chips or mulch and keep things weed free. Mow the lawn frequently. If you don’t know anything about landscaping, check with a local nursery, gardening club or even a nearby university with a botanical program. Students are often willing to take on landscaping projects.

10. Partner with a bank or lender to offer potential financing sources for prospective buyers. Local banks, credit unions and mortgage brokers may be able to offer financing deals that can help a buyer get into your home. Offer all visitors financing information from your local bank or lender when they tour your home. You want to make sure any potential buyer is qualified to buy the home.

These are just a few of the things you can do to help your home stand out. In current market conditions, selling a home is about pricing, location and exposure. If you have all three of these elements in place, there is no reason to think you won’t sell your home as effectively as any real estate agent.