Four Tips Every For Sale By Owner Seller Should Know
Most home sellers use a real estate agent — but not all do. For Sale by Owner transactions accounted for about one out of every 12 home sales in 2014, according to the National Association of Realtors (NAR). Many FSBO sellers go it alone to save money. Those savings can be significant, averaging nearly $9,500, according to U.S. News & World Report. But selling a home without a real estate agent presents its own set of challenges.
If you’re considering selling your home on your own, make sure you consider these four things to get the best price for your home, sell quickly, and avoid issues that could jeopardize your sale.
Pricing Your Home
One of the first tasks a real estate agent advises a potential seller on is pricing the property for sale. While agents are not professional appraisers, their experience often guides their recommendations. However, many data sources previously unavailable to the general public are now available online, thanks to modern technology. FSBO sellers can use these sources to properly price their home.
The most important guide for pricing your home should be recent neighborhood comparable sales, or “comps” in real estate lingo. The final sale prices of homes similar to your property and neighborhood, which were sold within the last six to 12 months, can guide you towards choosing a sales price that is matched to the market. This sales information is available to the public at most county courthouses or record offices and online in some areas.
Online valuation calculators can also help. Many websites, such as Zillow.com, offer property valuation estimates for free. For a small fee, consumers can also buy a more robust automated value model (AVM) report on their home from valuation businesses.
Marketing Your Sale
To sell your home quickly, effective marketing is essential. Real estate brokerages excel at this, whereas FSBO sellers are sometimes caught off guard.
NAR data from 2014 shows that many FSBO homes sold thanks to a yard sign — 42 percent used one. About one-third of sales came through the seller’s network of family, friends, and neighbors. Around 15 percent of sellers marketed their sale through classified ads, open houses, social media websites, and websites that cater to FSBO sellers.
Many resource kits and FSBO services are available to sellers online. These services cost money, but they may be a small compromise when compared against the expense of an agent’s commission.
Prepping and Showing the House
Homes that are prepped for sale sell first. Whether you use an agent or not, any hedges that need trimming, walls that need a fresh coat of neutral paint, and so on, should be addressed before putting your home on the market. Take care of these issues before photographing your home for listing services or classified ads.
When you do photograph your home for sale, quality pictures make a difference. Declutter and stage your interior space, using offsite storage if necessary, and focus on accurately showcasing the best features of your home. Shoot during the day for the best lighting. If you’re not a natural photographer, consider hiring a professional or enlisting the help of a friend.
Dale Pearson, of For Sale By Owner Services, told the Wall Street Journal he advises sellers to limit their home showing calendar for their benefit. Otherwise, potential buyers may want a viewing at odd hours. “It means telling buyers you’re showing the home on Saturday between 1 p.m. and 3 p.m. and asking, ‘What time would you like to come?’,” he says.
Getting (A Little) Help
Just because a seller decides to sell their home without a real estate agent doesn’t mean they need to go it alone. Getting some help with the more important parts of selling a home is a smart investment.
Hiring the services of a real estate lawyer is one of the best investments FSBO sellers can make. The complex paperwork, regulations, and legal disclosure requirements of home sale transactions can be overwhelming for the uninitiated. An attorney who specializes in real estate matters can make sure your sale goes through without a hitch for around $500.
Hiring a professional appraiser can also pay for itself many times over, especially if you’ve owned your home for more than a few years. In one case, Barry Peters, a Boise, Idaho, real estate attorney, told the Journal about an owner who accepted an offer of $110,000 on a home she purchased years before for only $28,000. She was happy with her FSBO price until the appraisal ordered by a lender found she could’ve sold the home for $130,000. “You need to get your home appraised if you have owned it for more than two years,” Peters cautioned.
Other professional services can also be worth the investment. Homebuyers should always consider a title insurance owner’s policy, whether they buy a home represented by a professional real estate agent or directly from a FSBO seller. The services of title agents or attorneys may be required to facilitate some closings. FSBO sellers should check their state’s regulations ahead of time to learn what requirements they need to follow to sell their home. Doing so can save time and money — which is the whole point of a FSBO sale, after all.