Some might describe our behavior as masochistic. My husband and I sold our house by owner. Twice. With three kids ages three and under. At the bottom of the market. Both times. We don’t actively search for pain and suffering, but we really wanted to save that 3%. If you’re as crazy as we are, read on for tips for how to sell your house without a real estate agent. For us, it was worth every penny and headache to sell our house by owner.
FSBO: Understanding the Numbers
Before you start down this road of insanity, let’s figure out how much you will save for all of your work. First, FSBO (For Sale By Owner – pronounced “Fizbo”) isn’t like it used to be. You can’t just hang a FSBO sign on your house. You need to get on the Multiple Listing Service (MLS). That’s going to cost you several hundred dollars. You’ll also need to pay the buyer’s agent or no agent is going to bring their clients to see you. That will set you back another 3% of your sales price. Check in your area because commissions vary and this is the high end of the range. If you or your friends don’t own a decent camera, you’ll want to invest in one of those.
For a $250,000 house, you will spend $15,000 on realtor fees in a traditional sale with 6% commission. If you sell by owner, you will spend $7,500 on realtor fees plus approximately $1000 on an MLS listing and a decent camera. Using these numbers, is it worth $6,500 to you to try to sell your house by owner? Read on before you decide.
Do Your Homework
You’re all in and the last thing you want to do is pay an agent. I totally understand. Time to put on your champion gloves and pump up the Rocky soundtrack. Now sit at your computer and pull up housing records. Anti-climactic, I know, but this is where the work begins.
Go to one of the real estate websites like Redfin, Realtor.com, Trulia, or Zillow. Plug in the details of your home, such as the number of bedrooms, square footage, and the year your house was built. Then, create a spreadsheet with all of the houses in your neighborhood with similar home facts. You’ll want to include: List Price, Address, Listing Date and Comments. These comments will help you remember the homes later (70s carpet, mega trainset, horror movie basement). Now do the same thing with recently sold homes.
Set a Realistic Price
After you’ve done a thorough job of checking out the market, set a realistic price for your home. Think about it while you work on other things on your moving to-do list. Then, see if your listing price is in line with the market from an objective standpoint.
Start Fixing and Cleaning
You know the drill. Start decluttering. Just throw out everything. If you must keep it, get a storage locker and throw everything in there. If you have any unfinished home improvement projects, time to knock them out. No buyer will want your house when they see that broken door handle. It’s the little things that drive the buyers away because those mistakes are like roaches. If there’s one obvious thing that wasn’t fixed, you know there are hundreds more hiding behind a planter or a carefully placed painting.
Neutralize Your House
There’s debate on this one, but I’m in the camp that no one wants to see your personal stuff. Your adorable nieces or lovey-dovey smooching wedding photos can be irritating to some. Put away your religious icons and recognize that you don’t need to display every single Chicago Cubs memorabilia you own. We covered up our kids’ photos by getting large prints through Walmart of outdoor scenes. If you have vacation photos of beautiful places, use those. Otherwise, walk outside and take some artsy photos of trees, sunsets, or flowers. This is a cheap way to depersonalize your home. Also, bold paint should be repainted a neutral color. Buyers want to see a clean slate.
Take Phenomenal Pictures
Buyers will decide in seconds whether they want to check out your home by looking at your online photos. There is absolutely no reason that your photos should look dark. If the lighting isn’t working for you at that moment, wait for a different time of the day. Your house should be sparkling with not a book out of place. We’ve passed on houses because we saw messes on the floor in the corner of the picture. If you’re too lazy to make your house spotless for the photos, buyers will wonder what else you’ve been too lazy to keep up with when it comes to house maintenance.
Brush Off Those Marketing Skills
Check out the listings of multi-million dollar properties and see how they describe the house. Notice the detailed description and see what applies to your home. Be sure to include the number of bedrooms and bathrooms and anything that makes your property stand out. A good school district is a big selling point. So, if you’re in a desirable one, mention it. Some descriptions you may come across as you check out other listings: “Beautiful”, “Charming”, “Move-in ready”, “In the heart of __”, “Walkable”, “Generously sized bedrooms”, “Desirable floor plan”, “Shows beautifully”, “Quality”, “Custom-built”, “Spacious living”, “Wide lot”, “Newer construction”. Sell it, but be honest so you don’t waste anyone’s time.
Use An Online FSBO Company
Check out reviews of FSBO online companies. Get the package that includes an MLS listing. This is a must. This is how agents will know that your house is for sale.
Get a Lawyer When Selling Your House By Owner
In some states, lawyers are not part of the home purchase transaction. They should be. Get yourself a lawyer especially if you are selling your house by owner. I recommend getting a lawyer for all legal transactions and this is the biggest transaction you are going to make in your life. Protect yourself. This is money well spent for protection and peace of mind.
Decide Who You Trust
The first time we sold our house by owner, I didn’t trust anybody. I met every real estate agent that wanted to show our house. The agent and her clients would scope out our townhome with me standing by the front door. This was somewhat of a logistical nightmare because I needed to find someone to watch the kids on short notice and I didn’t have family nearby or childcare. When we sold our second house, I got a lockbox for our front door with our key inside. I would give the agent the code for the box, so she could let herself in during the appointed time. This second option made life much easier as I could get the kids in the car and drive around until the realtor left.
Stop Being So Sensitive
One major benefit of using a realtor is that he’ll sugarcoat the insults that potential buyers throw at your home. It’s easy to get offended when people say your kitchen is outdated or that your house smells like something died in it. It’s in a buyer’s best interest to be brutally honest with his agent. Try not to let it get to you and don’t get defensive. Also consider that a buyer may be pointing out everything he hates because he doesn’t want to appear over-eager in a negotiation. Whatever the reason, don’t take it personally and don’t let it affect your relationship with a potential buyer.
Learn the Art of Negotiation
One of the reasons I loved selling our house by owner is that I enjoy negotiations. If this isn’t your thing, check with the online FSBO company to see if this they will negotiate on your behalf. If you will be conducting negotiations on your own, start studying. You’ve set your asking price so that’s the first step. You should also know what your walk away number is and stick to that. An offer comes in – congratulations! Do not let a buyer walk away even if her bid is ridiculously low. Come down a tiny fraction of your price if the buyer is low-balling you. If the offer seems reasonable, come down a significant amount so that the buyer knows you are serious about coming to an agreement. Remember that price isn’t everything. You can negotiate other terms like the closing date, closing costs, contingencies, and home warranties.
Lower Your Price
On our first home, we started at the high end of our listing range. We got many showings, but no offers. We gave ourselves four weeks at this price. One month later, we slashed our price to get it into a lower price bracket. Within a week, we received an offer on our house. Small, slow, and steady price decreases are less effective. Show buyers you are serious about selling and that you are willing to negotiate. Just remember what your walk away number is and be realistic about the fair market value of your home. You may adore your home, but it’s only worth what someone else will pay for it.
It’s Okay to Hire a Realtor
There’s a reason most people hire realtors. It’s a lot of work to price a house correctly, take great photos, market a property, interact with buyers and other agents, negotiate, and see a transaction through to the end. Realtors are the experts. They can also guide you through the emotional ups and downs of selling a house. The time and effort you will put into selling your house by owner is not free and it may not be in your best interest. It’s okay to hire a realtor. You have enough stuff to worry about without learning another profession on top of everything else.
Bask In Your Awesomeness
Take a moment to reflect upon all of the amazing things you’ve done or are thinking about doing to sell your home. Boxing gloves and soundtrack are still on. Selling a house by owner can be done. Best of luck to you and I can’t wait to hear all about it!