For Sale By Owner (FSBO) Home Seller Advice
One of the best way's to save money when selling your home is to sell your home by yourself. Although the task can initially be intimidating, anyone who is willing to put in the time and effort can save thousands during the process. Below are some tips and a general process that should get you started.Attend Your a FSBO Seminar:
In every major metropolitan city in the United States there are FSBO companies that operate local by owner advertising. These companies can be helpful but in many cases they will give you vague information and expect to be paid for the details. The seminars usually cost between $25 to $45 per person. There is typically a 30 minute presentation by a company employee that will generally describe the process of selling your home on your own. Most of the presentation will explain how their company can help you and the products and services they provide. If you want to save yourself some money and time do your own rea search. If you finish reading this article you will know all the steps necessary to get your home sold FSBO.Determine Market Value:
Determining your homes true market value does not mean driving through your neighborhood and viewing what other homes in your neighborhood are selling for. Determining true market value is much more complex and care should be taken when doing this research. The market value of your home should consider all the details of your home including square footage (above grade and below grade have different values), floor plan, upgrades, neighborhood, school district, curb appeal, surrounding amenities, age of your home...and the list goes on. Determining the true market value of your home is such an important task It is recommend to receive support from a professional. There are two real estate professionals that can help with this task.
- Free listing presentation from a local realtor: If you have already determined you will be selling your home for sale by owner then I would recommend not wasting a realtors time and taking advantage of their resources. Realtors are professional who work hard and no one should be expected to work for free. However if you are open to the idea of listing your home with a real estate agent then ask your local realtor for a listing presentation. Real estate agents have massive advantages over most people when determining market value of a home.
For one real estate agents are in the business of real estate every day so they have a working knowledge of the real estate market in general and usually understand the details of each neighborhood. They also have access to the Multiple Listing Service (MLS) which is a database that lists all the houses that are currently for sale with other realtors and all the houses that have previously sold.
A complete listing presentation should include your homes suggested listing price (homes value) along with the marketing services the realtor can offer.
- Get a Home Appraisal: Another great option to determine your homes true value is to get a professional appraisal. A home appraisal will cost between $200 to $400 depending on the location and size of your home but the final report contains valuable information. The final appraisal will contain the current market value of your house along with a minimum of three other comparable homes. If you want to sell your house fast FSBO then advertise your home below appraisal value and state that in the marketing.Get a Home Inspection:
It is advised to get a home inspection before actually marketing your home for sale. A home inspection will cost between $200 to $450 depending on the size of your home. The process begin's with a licensed home inspector coming to your home to complete a thorough home investigation. The inspector will review/check everything in your home from the electrical system, electrical outlets, plumbing system, roof and even your crawlspace. It is an advantage to get a home inspection before marketing your property so you know what deficiencies your home has. Often there will be numerous minor items that you can fix yourself. Other times a home inspection will find major deficiencies such as moisture in your attic or crawl space.
Once you receive your full home inspection report (usually 2-5 day's after the inspection) fix as many items as you can on the report. This will ensure a clean home inspection when your buyer has your home inspected. If the home inspection finds a major repair such as a leaking roof or moisture in your crawl space it is suggested to repair the major item before marketing your home. You will save much more money fixing it yourself or having it fixed before your buyer finds out about the deficiency.
Set Your Selling Price:
Depending on the condition of your home, the current market value, and your selling situation you should now set your selling price. Don't forget to take into account selling fee's; typically 1.5% closing fee's, appraisal fee's, negotiation room, and realtor fee's. Why realtor fee's you ask. Because sellers pay realtors and buyer do not. You can expect your buyer will most likely be represented by a realtor. Depending on your location in the US typical realtor fee's are 3% of selling price.
Stage Your Home: There is an art to staging a home and many people have professional jobs just staging homes for sale. If you list your home with a good realtor they will help you with this task. If you are selling you home for sale by owner then your main task will be to clean, clean, clean. Also use some of the tips from the pros like removing all family photos around the house. This helps potential home buyers see their family living in your home. Don't forget to stage outside of your home and the front and back yard. Put new bark/mulch in the flower beds, plant some fresh vibrant colored flowers, trim the bushes growing above the front windows, and paint to give your home some great curb appeal.
Market Your Property:
Now that your home is in great condition and will impress the masses it is time to spend a little money and get the word out that you are selling your home. This is where many for sale by owner (FSBO) home sellers hit a brick wall. Marketing is the most important step in selling your home. If you have a great sale price and no one knows your home is for sale, you will not receive one offer. There are many way's you can market you home for sale. It is suggested to budget a minimum of 2% of your selling price for marketing. Some great marketing avenues are: signs, classified adds, bulletin boards, community magazines, Internet, yard sign, and a home selling flyer.
Show Your Home To Potential Buyers:
This is the part many home owner don't like doing. After you have spent many day's, hours and a great sum of money getting your home ready to sell now you have to show your property to potential home buyers. Receiving phone calls, scheduling viewings, answering the same questions over and over to potential buyers, talking with unmotivated people, and listening to complaints about your home are just a few of the tasks you will be faced with. This is also the test for your previous work. If you set your selling price well and have good marketing your phone will ring.
If your buyer is represented by a realtor then you will not have to worry much about how the paperwork is completed. The buyers realtor will ask where and when to deliver the offers and you will receive them. You will need to read through the offer and understand the agreement/contract completely before being able to make a decision. If your buyer does not have a realtor you will have to help them put the offer together and walk them through the paperwork. You can also hire a local real estate attorney to help your through the process.
Counter Offer or Accept:
Depending on the offer you received from your potential home buyer you will need to counter offer or accept their offer. In a high buyers market it is typical to receive 3% lower than your asking price. Once an agreed upon price and terms is on paper and signed by both parties it is time for some more work.
It is federal and State law to have a Seller Disclosure Form and a Lead Base Paint Disclosure form completed for all transactions.
Title & Escrow:
Contact your local title and escrow company and get your home scheduled to close. A title company will check for liens on title and organize the closing. fee's for title and escrow vary depending on your home location and your relationship with your title agent.
Fix Buyer Requests:
Once your buyer has completed their home inspection you can bet they will have a few items they will ask to be fixed/completed before the close date. Because you previously had a home inspection completed there should be no big surprises on the buyers home inspection report.
Close and Receive Your Check:
Many times there are hick-ups with closings. It could be your buyer does not qualify to purchase your home and can not get financing, then you have to start the process all over again. Or you could be one of the lucky ones and have a smooth transaction from start to finish. If the closing does proceed as planned you can expect to receive your proceeds from closing in 1-3 business day's after closing. Congratulations! you have just sold your home.
Summary of Cost:
- Attend Local FSBO Seminar: $90
- Determine Market Value (Appraisal) : $300-$400
- Home Inspection : $200-$450
- Fixing Inspection Issues : $500-$3000
- Staging Home : $150-$1000
- Marketing Property : 2% Sale Price
- Buyer Discount : 3% of sale price
- Buyer Realtor Fee : 3% of sale price
- Closing Cost: 1.5% of sale price
Assuming a $100,000 sale price the typical cost to sell a home for sale by owner -FSBO would be between $10,650 and $14,440. This is definitely not cheep and this money does not include your time and effort, particularly the money you could have made while at work and not dealing with the sale of your home. As you can see selling your home on your own can be quite a challenge, take valuable time away from other tasks like family or work, and cost a substantial amount of money. For this reason real estate agents and professional home buyers exist.
Many people hire a real estate agent to help them through the gigantic task of selling their home. Even with a real estate agent the task of selling your home can be daunting. This is why selling your home to a real estate investor can make a great deal of sense. When you sell your home to a real estate investor you do not have to worry about any of the details and usually don't have to worry about the condition of your home. You can contact a local real estate investor and within 48 hours have a signed offer on your home. If you really need to close fast because of your selling situation some real estate investors can pay cash and close on your home within day's. No fixing up your home, no dealing with non-motivated buyers, no worrying about your buyer getting financing to close.