What Does It Mean To Sell For Sale By Owner?
Selling your home "for sale by owner" is when you decide to list your home yourself instead of hiring a real estate agent to do it for you. Going the for sale by owner route can be fun and exciting, but it can also be extremely challenging.
Most homes in the U.S sell through a real estate agent. According to the National Association of Realtors:
"91% of sellers were assisted by a real estate agent when selling their home."
That's a considerable share of the market going to realtors. However, if you're determined to be part of the 9% of individuals who successfully go the for sale by owner route, we'll show you how.
But first, let's discuss some of the pros and cons of selling a home yourself.
Pros of Selling FSBO
You take complete control
When you decide to go FSBO, you have 100% control over your home's listing. You don't have to:
Call up your real estate agent to make changes to the description.
Ask to adjust the price.
Request updated photos.
Call for updates about showings and interested buyers.
If you want to change, fix, or update something, you can do it right away without having to go through anyone else.
You'll pay less in commissions. Maybe.
This point can be a pro and a con, depending on how things play out.
You, at the very least, will not have to pay any commissions to a sellers agent. Keep in mind if your buyers have an agent, they will expect you to pay them.
You can request the buyers add their agent's commission to the price of the house, but you never know if they'll accept those terms until you try.
Cons of Selling FSBO
You may still have to pay some commissions
As we touched on above, you could still be on the hook for your buyer's agent's commission.
You won't get full exposure to the market
You may avoid paying commissions; however, you're likely to sell the house at a lower price than if you were to sell with an agent.
Real estate agents can list the property on the MLS and blast the listing out to all of their contacts. This will give your house the maximum exposure possible to potential buyers.
The more exposure you get, the faster your house is likely to sell, and the more likely it is to sell at asking price.
It takes a lot of time
Selling FSBO will take up a lot of your time. You'll have to be ready to take and return phone calls, answer questions, show the property, and market the property. All of this can take way more time than you're anticipating.
You'll have to field a ton of phone calls. When an agent lists your house, they will take all the phone calls from interested buyers. Are you ready to take 5 - 10 or more calls per day about your listing?
You don't have the same experience as a local agent. Potential buyers will ask you a ton of questions about the property. Will you be able to answer them all confidently?
Make Sure You List Your Property At The Right Price
Don't list randomly
It can be easy to pick a random number out of thin air and list your house at that price. Neglecting to do your due diligence can easily cause you to list your property too high or too low.
To accurately price your property, you will want to find comparable home sales (Comps) in your local area.
How to find comps
Finding comps is the best way to price your home. Locating comps is how real estate agents and appraisers determine with the highest accuracy possible an estimated value range for a property.
We'll use Zillow.com to find comps in this example:
When you get to Zillow.com, the first thing you'll want to do is enter your property address into the search bar and hit enter.
Your property will be pulled up, but you'll want to click on the "Close" button in the top right. After you hit the close button, you'll be taken to a map that shows a small area around your property.
Once you get to the map, you'll want to click the tab at the top that should start off saying: "For Sale."
You'll want to unselect for sale and click on "Sold."
After you clicked sold, you'll now see a map of the area surrounding your property with all the properties that have recently sold.
All the yellow dots represent sold properties, and you can see on the right of the screen all the properties in a list format.
Now what you need to do is look for the closest matches to your house. The closer the comp is in proximity, bed and bath count, and square footage (You want to be within 300 sqft) to your property, the better.
You also need to be mindful of crossing major roads and intersections. Sometimes price can change quickly by merely crossing a street.
Do your best to find an apples to apples comparison for your home.
Find 3 - 5 excellent comparable properties, then calculate the average price per square foot. Once you find the average price per square foot, you can multiply your properties square footage by the average, and congratulations! You now have the starting listing price for your property.
When you need to consider a price drop
There are a few telltale signs you need to reduce the price of your listing.
The comparable properties for sale are listed well below you.
You are not receiving showings.
You are receiving showings, but have not been presented with any offers.
Buyers and agents share feedback about the home being overpriced.
Your property appraised for a lower value than your asking price.
Hopefully, you won't find yourself in this situation, but if you do, you'll want to double-check comps in your area and set the price of your property to match.
If you received an appraisal for your property, it makes sense to set your asking price to that value.
Be realistic
One of the most important things you can do when setting the price for your home is to be realistic. It's easy to think your property is worth way more than it truly is. I've seen houses sit on the market for over six months because it was overpriced.
The best thing you can do is set the price accurately based on local market conditions, and you'll start getting showings, and eventually, offers.
Get A Professional Appraisal On Your Home
You can hire an appraiser to get an exact as-is value of your home. Hiring a professional appraiser is the most accurate way to value your home; however, you will have to cough up a few hundred dollars for the report.
If you have no interest in messing around with comps and valuing your property on your own, an appraiser is your best bet.
Prepare Your Home To Be Listed
Professional Staging
According to a report from the national association of realtors, staged homes can sell for more than their non-staged counterparts.
Staging your property may cost a few hundred, maybe even a few thousand dollars depending on your market. Still, it may very well be worth it if you sell the house at a higher price.
Deep Cleaning
Before letting anyone view your property, you have to clean it. You may not pay attention to all the fingerprints and cobwebs in the forgotten corners, but your buyers will notice them.
It's essential to leave the best impression you possibly can. A professional deep cleaning will help your property put its best foot forward.
Curb Appeal
Something you may not think about too much is curb appeal, but curb appeal is essential. When potential buyers drive up to view your property, you want them to be instantly impressed.
How can you instantly impressive your prospective buyers?
Make sure your lawn is well kept and freshly mowed.
Tear out any overgrowth and weeds.
Trim any trees or shrubbery that look too messy.
If it's fall, make sure to rake up the fallen leaves.
Do some light landscaping. For example, planting colorful flowers, small bushes, and laying fresh mulch in the gardens.
If you're feeling extra fancy, slap on a fresh coat of exterior paint!
Get A Pre-Inspection You Can Provide To Buyers
Most buyers are going to inspect your house before buying it. Inspections ensure the safety of the property and also act as a bargaining chip for the new buyer.
When an inspection is ordered, a professional, licensed inspector will be scheduled to come out and thoroughly review the property.
The inspection will generate a significant report detailing everything they find that may need attention.
You are not legally obligated to fix anything the inspector calls out (Unless it's specifically written into your contract with the buyer). Still, you should heavily consider repairing anything that may scare buyers away.
Major systems such as:
Electrical
Plumbing
Foundation
Roofing
Should be fixed or disclosed to the buyer. If you choose to disclose, you can show the buyer the report, so they know what needs to be addressed after closing.
Buyers will expect a price drop to account for large scale repairs they'll need to make.
If you decide to make the repairs yourself, make sure you save the receipts and invoices to prove you did the work recommended by the inspector.
Be Prepared To Take Calls And Answer Emails
After you blast out your listing, you need to be prepared to answer the onslaught of phone calls and emails. If you're listed at a great price and in a hot market, your phone should start ringing.
Make sure you are ready to answer questions, set up appointments, and sell all the great qualities of your property.
You should aim to answer all calls and emails right away, or at least very quickly if you're not available when they come through. If a buyer can't get a hold of you, they will call up the owner or agent for the next house they're interested in right away.
You've got a house to sell, so make sure you're alert and attentive!
Hold An Open House on Weekends
Open houses are held on weekends — usually Saturday and Sunday afternoons. Open houses are not a guaranteed method to sell your property, but it will undoubtedly help to get it in front of interested buyers.
Leave out some snacks and free drinks.
Get a scented wall plugin.
Plan to hold the open house for three to four hours in the early afternoon.
Let the buyers come rolling in and be prepared to answer questions.
List Your Property Online
Here are the most important places you should post your property to maximize your viewings. Here, we'll have a quick bulleted list, but we'll create in-depth tutorials on how to expertly post your property online for each one.
Zillow (Automatically syndicates to Trulia)
Craigslist
For Sale By Owner.com
Facebook Marketplace
Take Your Advertising And Marketing Seriously
It may be easy for you to think all you have to do is list your property online and then sit back. But that's usually not the case.
You have to be on top of your game.
You have to write a killer listing description.
You must take incredible pictures.
After listing on sites like Craigslist and Facebook Marketplace, you have to renew your listing every few days to keep it fresh.
You have to add open house dates to every listing to spread the word and generate interest.
You can even go old school and send out postcards and flyers to market your property.
There may be a lot of other houses for sale in your area and within your price range. You have to do everything you can to make your listing stand out.
Always Hold Yourself To Professional Standards
When selling for sale by owner, you have to maintain a high level of professionalism. People buy other people, so always remember to:
Answer and return phone calls quickly.
Be polite and respectful.
Kindly reject offers you're not interested in.
Quickly respond to questions professionally.
If someone doesn't like your property, and many people won't, don't take it personally.
Stay Organized
To be successful in selling your house, you have to remain organized. Be sure to keep a list of everywhere you listed your property. Staying organized will make it easy for you to make changes to your listings without missing anything.
You should also keep a list of everyone interested in buying. Maintaining a lead list will allow you to follow up with everyone who has shown interest in making you an offer.
Stay on top of renewing any listings that go stale, such as your Craigslist and Facebook Marketplace listings.
Once the house sells, you'll also need to go back and remove any listings. You don't want interested buyers to keep calling you if your property is no longer available.
Make Sure You Pre - Qualify Your Buyers
Pre-qualifying your buyers is an essential step most people forget. Luckily, pre-qualification is a simple step.
All you need to do is ask any potential buyers interested in making an offer for a pre-qualification letter from their lender.
If they don't have a pre-qualification letter, they may not have the funds to buy your property. If they don't have the funds, obviously they won't be able to buy, so their offer will waste your time.
Hopefully, your interested buyer will have a pre-qualification letter. In this case, call up the lender and verify.
Sell To A Direct, Professional Home Buyer Like Contenza Properties
Does all of this sound like a massive headache? If it does, don't worry, it is a headache.
Instead of going through all of the above steps to list your house FSBO, you can sell your house directly to a professional home buyer like Contenza Properties.
We don't charge you any fees.
You will not have to stage the home.
There's no cleaning or staging or cleaning required.
There's no waiting for your property to sit on the market and generate interest.
You can get an offer much quicker than if you were to list FSBO.
If you made it this far, you're dedicated to selling your house. Submit your name and email address below, and let us make you an offer you'll love.
Do you know someone who needs to sell their home quickly? Refer them to Contenza, and we'll pay you a $500 referral fee if we're able to buy their property.
About the Author
Jordan Reid founded Contenza Properties in April of 2018 to help homeowners solve their real estate problems quickly.
Since then, Jordan has helped multiple homeowners facing difficult situations such as divorce, property liens, and unwanted property inheritance.
Jordan believes in putting people first, and numbers second, which helps him reach the best possible solutions for the homeowners he works with.