Selling a house is always a tedious process no matter what approach you take, but what comes in your mind most of the time when you sell your own home is avoiding paying the lump sum amount of commission, or at least save on it. Thus, going it alone as For Sale By Owner is your priority choice.
For Sale By Owner or FSBO simply means you are selling your house alone and unaided. You do everything from preparing paperwork, marketing the property, doing showings and negotiations, and so on. With this approach, there are pros and cons to consider, but more importantly, there are ways to do it right and succeed in getting your house sold.
Houzeo provides 3 different packages according to your listing needs!
Here are 5 helpful tips to shepherd your home from prep to closing day:
1. Get Your Home Ready
First things first. Start by preparing your house for sale well. Your goal here is to make it easier for potential buyers to envision themselves in your home, rather than seeing signs of your personality everywhere.
Here are ways to prepare your home for sale:
- Declutter and depersonalize. Clean up by renting a storage unit for knickknacks, photos, extra furniture, and other personal items.
- Make repairs. You want your house to be in the best condition possible, so take care of major defects that could discourage buyers like leaky faucets, loose door handles, or electrical switches and lights that don’t work properly.
- Repaint interior walls. Paint your walls a neutral color that will appeal to a wide range of buyers.
- Organize closets and drawers. Make sure to clean up messy closets to give the appearance that your home has enough storage space.
- Make every surface shine. From ceiling fans to floors and everything in between, clean your home until it sparkles.
- Eliminate bad odors. Hide the litter box and spray air neutralizer throughout your home. When showing the home, fill it with inviting smells by putting out fresh flowers and baking a batch of cookies.
- Clean up the landscaping and the outside. Curb appeal is crucial to a good first impression, so make sure your home’s lawn is pristine. Be sure to clean the gutters and pressure wash your home’s siding as well. A sloppy exterior will make potential buyers think you’ve neglected interior maintenance too.
- Make the front door inviting. Let buyers know they’re invited into your home. A fresh coat of paint, especially in a color that contrasts with the home, will make the front door stand out. Make sure to bu a new welcome mat.
2. Research The Market & Set Your Price
Overpricing usually leads to a longer time in the market and an eventual price cut, so you might want to avoid that. The single most important factor that determines whether your home sells quickly or not is its list price.
Real estate agents create what’s called a Comparative Market Analysis (CMA) to determine what’s an ideal list price for a property. But, it is not rocket science. With Zillow.com and Redfin.com, you can easily create your own CMA for most homes. Post that, you can sell your home as a For Sale By Owner on Houzeo.com, the most advanced For Sale By Owner (FSBO) platform.
Here are important guides to price your home for sale:
- Start with Zillow’s Zestimate and Redfin’s Price Estimate. Zillow’s Zestimate and Redfin Estimate are both computed daily based on millions of data points. They are both also rather accurate with low median error rates. Start here, and leverage both Zillow and Redfin for the steps below.
- Review Recently Sold Similar Homes in Your Neighborhood. Use Zillow or Redfin to run your own comps. This step will take about an hour but you will gain a lot from this pricing exercise. Use the general guidelines below to select comparable homes:
- Vicinity: Ensure you search within ½ of a mile to a mile from your home
- Recency: Your comps should have sold within the last 3 months
- Age: Comps should be roughly the same age as your property. If your property is gut-rehabbed, you can use new homes as comps, but discount the price per square foot by about 10% if your home isn’t new
- Square Footage: The comps should have square footage roughly within 15 percent of your property. This means that if your home is 2,400 sq. ft., search for comps within 2,000 to 2,600 sq. ft. Note that in most markets, smaller properties sell for higher prices per square foot than larger homes. When you have between 3 to 5 good comps, adjust for the age of each property, lot size, upgrades, and condition. Then compute the price per square foot. Use the median price per square foot from these comps to price your home.
- Review Current Active Listings in Your Neighborhood. The number you get from steps 1 and 2 needs to be adjusted based on what else is on the market, and whether it is a buyer’s or a seller’s market. So using the same criteria you used to search for sold comps in #2 above, search for current active listings on Zillow and Redfin. You can list your home at the higher end of your range if it is a seller’s market and there aren’t many other options for buyers. Price your home on the lower end if it is a buyer’s market or if there are many other similar homes at comparable price points. You want to be competitively priced to drive traffic to your property.
3. Market Your Home For Sale
To sell a house by owner properly, you need to work hard to succeed in getting qualified buyers and competitive offers. There is no one-way trail to sell a house by owner, but here are some basic strategies:
- Posting a Yard Sign. Start with posting a good yard sign. This is common in every home offered for sale, so you need to get one for your house for sale and spend a little bit more to get a better looking one.
- Printing out Sales Flyers and/or Brochures. Have flyers and/or brochures readily available to give to people who look at your house and whom you meet expressing interest in your house for sale, These flyers and/or brochures should have the property specifics: property description, sale price, property address, and your contact details – both your phone number and email address,
- Advertising Online. Leverage the online platforms to advertise your home for sale and get higher chances in exposing it to the public. There are numerous popular For Sale By Owner websites available where you can do this. One highly popular is Zillow.com which has a dedicated For Sale By Owner page and of course, the most advanced For Sale By Owner platform – Houzeo.com, which offers a flat fee MLS listing.
- Hosting an Open House. This is literally opening your house to the public for viewing. This helps you better show your house to interested buyers all at the same time rather than arranging individual schedules to privately show them the house one by one. Open house is best done during the weekends and on good weather days.
4. Negotiate The Sale
The most difficult task to do when selling your home by owner is this part. Since you are selling a house without a realtor, all showings and negotiations are of course, done by you alone. Prepare yourself to field and negotiate offers.
Here are essential negotiation strategies you can use:
- Don’t Make The First Offer. You never want to make the first offer. The interested buyer may offer a price that is a much better deal compared to what you have in mind.
- Use Written Communication. The initial negotiations will probably be verbal, but once you agree on the basics, the buyer will have to submit a written offer. It is easier to communicate non-verbally when negotiating back and forth.
- Be Willing To Walk Away. You are not obligated to respond to low-ballers and unserious offers. If offers won’t come down to the minimum price you have set, feel free to reject. More often than not, these buyers will come back with something more in line.
- Be Patient. Don’t be discouraged by the slow progress of your house for sale. You can always drop your offer price if you think you’re making no progress. Bear in mind though that motivated buyers are out there, so be patient.
5. Handle The Closing
No matter where your house is located, you need to complete the requisite legal paperwork in order to close the sale. This is an entirely legal affair where either your closing attorney or title agent handles. The closing agent does most of the closing work, but you may need to provide certain documentation in the process. Get them ready as quickly as possible.
Your closing agent will schedule a date for your closing. Here’s how to prepare for your closing day.
- Review Your Closing Documents in Advance: Closing documents should generally be available to you in advance of the scheduled closing date. Review these documents at length and understand their provisions. Here are some key documents you’ll likely sign at closing:
- The HUD-1 or Closing Disclosure: Most homes are purchased with a mortgage. If this is the case on your transaction, you’ll get the Closing Disclosure summarizing the costs in detail. If your transaction is all cash, you may get the HUD-1, although this is less common. These documents detail amounts you’re charged for, your loan payoffs if any, and the net proceeds you will take to the bank. Remember, depending upon how much equity you have in the property, you may need to bring a check (or send a wire) on the closing date. Ensure there are no typos in your name, address, property address, bank info, and other details. Then review every amount and the totals to ensure there are no mathematical errors or inadvertent costs.
- The Deed: This document enables legal transfer of title from the seller to the buyer. Read this document carefully, verifying all details including the legal description of the property, the deed book, deed book page, and the Property Identification Number (PIN), if any. We know of a case where a Seller sold a $94,000 property, but the deed also legally transferred over the Seller’s 5 other homes worth $680,000 over to the Buyer. There was a huge scramble post closing to correct this mistake. It could have been a nightmare for the Seller if the Buyer didn’t honestly transfer the rest of the properties back to the Seller.
- Statement of Closing Costs: This statement summarizes all the expenses involved in the transaction. This document is easier to understand vs. the HUD-1/Closing Disclosure, but they should tie.
- Certificate of Title: Allows you to state that you have the right to sell the property.
- Ask Questions: If this is your first time selling a property, schedule an appointment with the closing agent before the date of the closing. Prior to that appointment do your research and ask clarifying questions on anything you have doubts on.
- Bring TWO Forms of Official ID: There will likely be a licensed notary involved who’ll require that you swear you are who you say you are. Take a valid driver’s license or passport for ID. Carry a secondary ID as well, just in case.
Selling a house by owner is much more complex than you can imagine. It is more complicated than leveraging the expertise of a real estate agent, but if you can make it happen, make it happen. You can save tens and thousands of dollars and that’s why people try to do it all the time.
Did you know Houzeo’s Gold Package provides relevant Federal and State Seller Disclosures?
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