If you’re thinking of selling your home as a for sale by owner property, did you know that the founder of ForSaleByOwner.com, Colby Sambrotto, hired a real estate agent to sell his own home? Here’s the article about it in Daily Mail.
Selling your own property as a For Sale By Owner (FSBO) property isn’t easy. Here are some tips, and some warning signs, to help you through the process and give consideration to your situation.
- Creating your listing with excellent photography
- Getting your listing found
- Determining a listing price
- Protecting your interests
- Cooperating with real estate agents
If you have any further questions after reading this information, please feel free to contact me anytime.
Creating your listing with excellent photography
Whether you’re uploading your house to Facebook or ForSaleByOwner.com or another site, your listing is important. You need to have at least 20-30 really excellent photographs of the entire property. Don’t skimp on this — hire a great photographer, maybe even one who uses drones. Get the digital images and make sure the lighting is stellar so that the images are attractive to the shopper. Check for the angles taken in each room so that every space looks appealing, large, open and at its best. Stage the rooms before taking the pictures, as stats show that staged spaces sell better than empty ones (and no one wants to see your clutter!). When you upload the images, be sure to upload the right size so they are not pixelated. Double check the platform you are using and the size requirements. People really do buy based on pictures, and they are actually worth a thousand words. Also, video is awesome, so be sure to explore options with your photography, keeping all of these same tips in mind for your motion picture.
Getting your listing found
My best suggestion: Facebook. After you’ve turned it into a beautiful listing with an awesome photographer (remember, without an agent it is you who will pay for the photographer), spend hundreds of dollars boosting it on Facebook. Target people with the interests, demographics, income, and other interests or behaviors that you think match a potential buyer for your home. Share it in “local to buy” groups, and email the link to the Facebook post to family and friends. Also, you can looking for relocation groups and human resource directors in Facebook and LinkedIn, and connect with them to share your Facebook post and listing.
ForSaleByOwner.com offers a package where you can be listed in the MLS, but it costs 1.99% of the total sale (according to their explanation here). You’re actually turning the sale of your house over to another agent through this method, as far as I understand it from the explanation provided. And the “agent” is providing you with some of the normal seller’s agent services, but they’re not on the ground in your market. Why is ForSaleByOwner.com marketing this method if you don’t need an agent? I really don’t understand it. I do all of that and more for my customary 3%, so if you’re willing to spend the 1.99%, why not spend 3% and get an actual local agent who cares about your property and will organize all the marketing and showings for you? Don’t forget, as I mentioned a couple days ago, the founder of that website and driver of this entire modern FSBO philosophy also sold his own home with a real estate agent. So, be careful.
Determining a listing price
There is an entire science behind pricing a home for sale, but I’ll provide a few helpful tips in this email. First, you need to find some comps. Second, make adjustments to the comps based on how those homes are different than yours (there is a whole state certification/licensure for appraisers on how to do these types of things, and real estate agents also do some of this for our clients). To do this properly, you have to know what that extra bathroom or finished basement or corner lot is worth in your area (sometimes this can be determined by comparing the comps). Third, how quickly do you want or need to sell? This is going to determine whether you go toward the high or low end of the range you are considering. And, guess what — buyers know that you aren’t paying a seller commission, so they often take that into consideration and make a low offer. Take that into account, too, when you’re figuring out what price to choose. Finally, remember that searches are conducted online in $50,000 or $100,000 increments, so make sure you are not pricing yourself out of being searched on the low or high end of your property’s potential value.
If you would like a comparative market analysis to help you determine how to price your home, let’s talk — contact me here.
Protecting your interests if you get an offer and through the closing
This is where things get tricky, because there is a lot of written legalize, law and process involved in the offer and contracting process. To be very frank (and we’re friends now after all these ideas, right?), the buyer’s agent ends up doing all the work that your seller’s agent would usually do. But, the buyer’s agent still represents the buyer, not you, so who represents your interests at the table? It’s you, you and only you, so I would really encourage you to hire a real estate attorney to help you through the process if you’re not going to have an agent of your own. Either way, spend some time researching your obligations as a seller, especially dealing with disclosures, requests for remedy, choosing a title agency, what it means when you counter an offer (as to the legal status of the original offer), closing cost negotiations, home inspections, contingencies, and closing on time. Normally, your agent would be there with you through all of this, so it is important that someone who knows all the ins and outs is there to protect your interests!
Would you like for me to be there protecting your interests? I’d certainly love to chat with you about it.
Decide: Are you cooperating with real estate agents representing buyers?
A real estate agent does not work for free, and cannot — this is our living. However, some FSBOs think that the buyer should not have a real estate agent, either. If you are selling your house as a FSBO, be prepared to offer at least 3%. Why at least 3%? Because the buyer’s agent is going to end up doing a lot of the seller’s agent work — things you are not aware of, thing you do not know how to legally track or complete, requests for remedy, home inspections, and getting ready for closing. It is possible that the buyer’s agent will charge an additional fee for having to do what would otherwise be your seller’s agent responsibility. Selling a home isn’t just about sticking up a sign in your yard and having showings, and those are all the things we spend 120 classroom hours, 20 hours in our first year, and 30 hours every 3 years learning all about.
The stats don’t lie
- FSBOs accounted for 8% of home sales in 2015. They were actually at their peak in 2004 at 14% — FSBO sales are declining, not increasing.
- The typical FSBO home sold for $185,000 compared to $240,000 for agent-assisted home sales.
- FSBO methods used to market home:
- Yard sign: 33%
- Friends, relatives, or neighbors: 21%
- Online classified advertisements: 10%
- Open house: 21%
- Most difficult tasks for FSBO sellers:
- Getting the right price: 18%
- Preparing/fixing up home for sale: 13%
- Understanding and performing paperwork: 12%
We’ve talked about the marketing, the photography, the listing, the showings, the comps, the negotiations, the paperwork … there’s so much too it. Usually, that’s all part of my fee. So, if your property still hasn’t sold, let me know. I really would love to be your cheerleader and get your property sold for you.
Schedule a time for us to chat by phone by clicking here.