Selling a house is not easy, and most homeowners decide to sell their homes with the help of a realtor. Using a realtor has a lot of advantages: Most realtors are knowledgeable of the area, and can quickly access the market value of the property. Realtors can list the property on a Multiple Listing Service (MLS), and attract plenty of buyers. Realtors handle all the paperwork for the sale of the property, and owners only need to sign contract and closing documents.
All these services offered by realtors are very convenient but are not free. Realtor commissions are as much as 6% of the property sale’s price. To put things in perspective, if a realtor sells a house for $100K, the commissions will be $6K, and if there is no mortgage on the property, your net profit will be $94K. Most people I know have a mortgage on their property, and the owner’s profit will be what is left after the mortgage balance is paid. In this case, agent commission could highly impact the owner’s profit.
For Sale By Owner, or simply FSBO (fizz-bo) is a way to sell a house without enlisting the help of a realtor. It helps the owner keep all profit from the sale, but in this case, the owner will perform all tasks realtors do. Thousands of people are selling their house through the FSBO process every day. Before you embark on the journey, ask yourself the following questions:
- Am I looking to save the realtor fees on the sale of my house?
- Am I willing to research my property value?
- Am I willing to market the property by myself?
- Am I willing to show the property to a potential buyer by myself?
- Am I ready to negotiate with the buyers?
- Am I willing to look for an attorney or title company to close the property?
If your answer is YES to all those questions, this booklet is for you. It will educate you on the process, and provide you the tools to sell your house FSBO.
Enjoy the journey!
Step 1- Getting the house ready for sale
There are 2 different groups of buyers that may buy your house: these groups are Investors and Retail buyers. Whether you put a lot of effort on this step or not depends on the group of buyers you are targeting.
Investors buy houses “AS-IS,” and fix them. They buy repair parts at wholesale price, and can fix the house at a lower price than you would. Therefore, you don’t have to make any repair on the property, or even clean the property. When selling FSBO, it’s easier to sell to this group of buyers because most of the time, they pay the house cash, therefore are not subject to banks regulations and can close quick. Investors will also create all of the paperwork to buy the house, including the sales contract, finding a title company or attorney, and pay closing fees. The only downside is that investors ask for a discount on the price to cover the expenses they incur. We will be glad to purchase your house if you decide to sell it to investors.
If you are looking to sell the house to retail buyers, you need to make repairs in the house and make it look pretty in order to highlight the features in the house. Here are few tips to consider:
- Remove Clutter from the house: The first thing that you need to do is to consider doing a thorough cleaning, which includes cleaning furniture pieces as well as scrubbing all baseboards. A clean home is always appealing; be sure to clean and organize the living space, storage area, and closets. Homebuyers always look out for space and the available storage that the house have.
- Stage the House: Although home staging can incur some expenses, it helps the house sell quickly. When staging the house, consider painting the house to make it look new. It is recommended to have paintings on the walls, but be sure to depersonalize them. Don’t leave portraits and family photographs on the walls, as it will distract potential Most buyers look at different homes in a day, and you would like them to remember the features of the house itself, not the photos of your family.
- Keep the yard clean: Yard always gives the house a first impression of the property. It’s important to mow the lawn, trim the trees, clear the bushes, and plant some decorative flowers in front of the house.
Step 2 – Research the market value
Before you price your house, you need to know what your house is worth. Most owners are emotionally attached to their houses, and let emotions overpower the market facts. If the asking price is way higher than the market value of your property, it scares away serious buyers and buyers who don’t like to negotiate prices. Here are some tips to compute the market value of your property.
- Find out the prices of similar properties on the market.
- Find out prices for which homes have sold in recent times in your area.
- Read articles on the internet about how to price your property right.
- Everyone has a unique sense of beauty, and what appears beautiful about your home may not be attractive in the eyes of buyers. Try looking at your home from buyers point of view when setting the asking price.
- Do some research and find out the maximum and also the minimum value for your home. Every county provides a tax assessed value of every property an their Generally, the tax assessed value is way less than the actual property value.
If the price is right, your house will not last on the market. Luckily for us in the 21st century, there are FREE tools readily available on the internet to help assess the market value of your house. Some of these tools are:
Keep in mind, the estimated values provided on these websites assume the house is in good condition. If the house needs some repairs, be sure to deduct the repair estimate from the estimated value of the house.
I will not recommend this, but if you have a few hundred dollars to spare, you can also hire a professional appraiser to help you come up with a property value.
Step 3- Prepare property information
At this stage, you have already established a price for your property; you need to prepare a list of important features and highlights that make your property stand out from the rest of the homes in your area.
Prospective buyers are interested in knowing the number of bedrooms and bathrooms in the room, square footage of the living area and backyard, year built, improvement done in the house, proximity to amenities, etc. If your property lies in a school district that is known for its excellent education, you should not forget to mention this point to prospective buyers. If the HOA fees include utilities, you should point it out as a great advantage in front of the buyer who has come for a showing in your condominium.
Gathering property helps a lot during marketing, and when showing the house to prospective buyers.
Step 4- Market to home buyers
Marketing is the most important tool to expose your house to potential buyers. Trying to sell a house without marketing is like winking at a girl in the dark. You know what you are doing but nobody else does. When marketing, keep in mind your primary target buyer. There are online and offline strategies you can use to create the buzz about your house. Let’s now discuss online strategies.
a) Online marketing
These strategies are more popular nowadays and involve marketing the property on the internet.
The Internet has provided a very powerful medium to homeowners who want to sell their homes on their own. Homebuyers have multiple options in the form of realty websites to take a look at the properties available for sale in the areas of their choice. To get online exposure, you may need to advertise on websites such as Zillow, Trulia, and Homes.com, Craigslist, and Social Media.
Your online advertising should include not only photos of the exterior and interiors of the property but also the backyard with short descriptions to sparks viewers’ interest. There should also be a long description of your house to strike the buyer’s emotions. You can learn how to word your listing from the listing already posted on realty websites.
b) Offline marketing
Traditional methods of advertising, also referred to as offline marketing, are as important in gaining exposure for your house as online marketing. Here are some offline marketing tips:
- Place a yard sign.
- Get flyers printed and distribute them for free to allow as many people as possible to know about your property.
- Advertise your property in the classified section of a few important newspapers in your area.
- Hold an open house. This is a very good way of making people in your neighborhood know that your house is on sale. In general, neighbors spread the words, and they may prove to be very important in your marketing efforts.. They can be the best promoters of your house, so do not forget to describe in detail the highlights and features of your house as well as the price in front of these neighbors.
Step 5. Closing
At this stage, you have already found a buyer for your house. Closing is a very important aspect of selling your house as it involves the important financial transaction, filling up of documents and forms, and signing of the agreement. There are so many details to keep in mind while closing that it might be overwhelming for someone who is doing it for the first time. It is prudent to seek the help of a professional, possibly a real estate attorney. The attorney will draft the sales contract and prepare all closing documents for a small fee. Hiring an attorney will help you save a lot of your time and energy and also ensure that the process goes off in a smooth and hassle-free manner.
Still thinking about Selling FSBO?
Today, as much as 20% of the total homes are sold successfully by their owners with the help of tools that are freely available on the internet. FSBO (fizz-bo), as it is referred to, is on the increase around the country. In fact, with the availability of authentic information and professional help on the internet, it has become much easier today than it ever was. In average, FSBO homes sell for higher prices more than homes sold through realtors.
We hope that this blog was informative, and you enjoyed reading about the FSBO process. Feel free to contact us at 832.295.6455 if you have any further questions. Should you decide to sell your house to an investor, feel free to email us, we will be glad to work with you and buy your house quickly.