How to Sell Your Home $$ “BY OWNER” $$
They finally decided — it was time to sell. “We can sell it ourselves and save the real estate commission!” she told him. He shrugged. “Who knows… maybe we should just call an agent and let him handle all this stuff.” They’d talked about this before, but now it was time to make a choice. The building plans were ready and the lot was theirs. No more time to waste — they wanted to start building their new home.
When it’s time to sell your home, will you choose the traditional way — calling a real estate firm — or will you decide to “give it a go” as a FSBO? Selling your home For Sale By Owner, (FSBO) can be an interesting proposition. Everyone likes to save money — especially when it adds up to thousands of dollars! If you decide on the “By Owner” route, here are some ideas to help you make a serious effort with a reasonable chance of success.
Make Some Plans
The first thing to do is, sit down with a pen and a legal pad and write down a rough draft of what needs to be done. For example, you’ll need to consider all of the following:
- Sales Price
- House Preparation
- Sales Tools
- Marketing Plan
- Closing Strategy
With this bare outline in hand, start filling in the details under each heading. Yes, it’s going to take some work, but if you can pull this off, you’ve saved yourself a bunch of money!
Let’s look at the asking price. First, how much do you own on the mortgage? Next… how much money do you need, after the loan is paid, to make everything work out financially for buying the new home? Hmmm, okay… now that you know the amount of money you’ll need, you can hope it will all work out that way.
So, to figure out the asking price, let’s forget about all of that… because none of those things matter when it comes to pricing the house! The ONLY thing that matters is… what are SIMILAR homes in this area selling for today? You could drive around and look at homes for sale, check here, and ask there… but for the real answer, call three or four real estate agents and ask them for a free market analysis. That will give you the true answer to pricing.
Adjust the price according to how your house compares to others that recently sold in the area; maybe yours is larger, newer, freshly carpeted, has an extra car garage or backs up to the golf course. The real estate people will help you decide on a reasonable price… and it won’t cost you a dime! Now you’re ready for step two:
Ready… Set… Go! Your house must win the race with all the other homes that are for sale in your area. If you come in second, buyers will choose one of those other houses instead of yours. So… we’ve got to get the house ready to sell. Let’s walk across the street and look at the house as a buyer would. Pretend that you don’t own it for a minute and see how it stacks up to the other houses you see from here.
Is your front yard, including the trees and flowers, well above average for the neighborhood? Are there things sitting out that should be put away, such as toys, garden hoses and “well used” decorative items? Walk up to the front door as though you were a stranger, looking at the building for needed maintenance or repair. How is the paint, the driveway, the windows, the front door and doorknob… are you impressed with this house?
Go inside… what do you see right away? Does the house seem clean, bright and spacious? Are the floors and walls clean? Is the carpeting in excellent condition? You’ll want to tour the house, room by room; see if it’s tidy, well decorated and impressive. If you find loose doorknobs, chipped paint, or dull kitchen and bathroom fixtures, you can bet prospective buyers will see them and it will hurt your chances of selling!
What should you do? You need to paint, repair and replace! Clear out any unattractive “stuff” that’s going to cost you the one first impression you’ll make on the next prospective buyer that walks in the door!
Now for step three: We want to sell the house, and our main competitors in the area are homes being represented by professional real estate people. So, we’re going to need at least some basic sales tools to market the property. Let’s start with the following:
- A Yard Sign.
- Photos of the House.
- Information Sheets.
- Mortgage Lender information.
- The Market Analysis (from step one).
- Sales Contracts
- An Internet Site (and an Email Address).
- Money for Advertising and Expenses.
- A Marketing Plan.
Signs are available at many places and they come in all sizes. If you like, you can even have a custom sign made for you by a local sign company. Contracts, along with financing addendum, are available from several sources. Consider having an attorney write-up a contract for you… or you can obtain and use a contract from a title company.
My best recommendation is to seek professional advice if you have any questions. You’re dealing with a major financial transaction, you know! Visit several mortgage lenders and pick up information from them; introduce yourself and get some of their business cards.
If you can build an Internet Site, that would be great. If you can’t, check around about getting a site done for you, then add your site to all the major search engines and mention the site in all of your advertising. If you have access to email, you can use it to get the word out on your home sale as well.
Step four is our “marketing plan”. In other words, our plan for getting this house sold. We need to let EVERONE know that the house is for sale, and provide them with more information when they want it. The first thing to do is get the house ready as discussed in step two. Then, take quality pictures of both the inside and outside of the house and create your information sheets.
Now, it’s time to put your “FOR SALE BY OWNER” sign in the yard, and hope that someone buys your house before you have to clean it again! The next thing to do is walk around the entire neighborhood and hand out the information sheets to all of your neighbors. Tell them that you’re selling your house, and ask them to tell their friends and acquaintances at work.
Write an ad for the newspaper and put it in to run this weekend. Don’t make any plans this weekend because you’ll need to be home to talk on the phone, show the house, and answer questions from people who walk up to the door to inquire. Yes, it’s a lot of work – but if you succeed, you’ll save the real estate commission… which was the reason you did this in the first place, right?
Moving right along… depending on the price range of your home, consider contacting major employers in the area. Call the HR Department and ask if you can place an ad on their bulletin boards. Also, consider putting your information sheet on bulletin boards in grocery stores, full service car washes and local convenience stores.
See if you can put an ad in your employer’s newsletter or your neighborhood’s newsletter. Check the Internet for “free ad” sites and post your property information there as well. Finally, think about offering a small fee to real estate agents who are willing to show your house to buyers they’re helping.
You could drop by a few local real estate offices and give them your information sheet along with details on the amount of fee you’re offering. Plan to run some more ads in the newspaper next weekend — and look for other papers (small locals) where you can advertise to another sector of the population in your general area.
Consider holding an Open House. Although the odds of selling at an open house are between “slim and none”, you’ll probably eliminate some of the phone calls you’re receiving from curious neighbors by simply opening up the house for everyone to see a couple of times. Put pies in the oven and coffee on the stove to give your house that warm, “cozy” feeling.
One last thing: Think about buying a home warranty. That could help to give buyers confidence in your property. A home warranty is kind of an insurance policy that covers major appliances and systems for a certain length of time. Most builders offer home warranties with new homes. If you do decide to buy a home warranty… be sure to include that fact in all of your advertising.
When you get phone calls and drop-ins, what will you say and what will you do? How will you lead someone from just looking to actually buying? This calls for step five of our plan. First, remember that you’re letting strangers into your home. So, for your own safety, let someone else know when you’ll be showing the house.
Have them call you about 10 minutes into the showing time. If your prospects are still looking, just take a short pause and answer the phone. Leave the outside doors unlocked while you’re showing as well. If you need to get out of the house in an emergency, you don’t want to be slowed-down by a locked door.
Secondly, put away all valuable items like jewelry and credit cards. Also, make sure that any prescription medications you may have are secured. Trust your instincts. If you have a bad feeling about a person or a situation, bring the showing to an end right away… protect yourself always!
Be friendly, but not “talkative”. Ask a question or two as you walk through the house. Here are some things you’ll want to know:
- How long have they been looking for a home?
- In which areas are they looking at homes?
- Have they been pre-qualified with a lender?
- Do they have a house to sell?
- In general, when do they expect to move?
- What attracted their attention to your house?
- The answers will give you a very good idea of how ready, willing and able they may be to make near term decision.
Your prospects will have questions for you also. Be prepared to answer the following questions in detail when asked:
- Why are you selling the house?
- How long have you lived here?
- Who was the homebuilder?
- How long has it been on the market?
- Are there any problems with the house?
- Why aren’t you using a real estate company?
- How did you arrive at your asking price?
- What is your rock bottom price for the house?
- There probably will be more difficult questions as well… be ready for anything they might ask you.
- And please remember this: You absolutely MUST tell them about any hidden defects in the house.
- The costs of a lawsuit will far outweigh any savings on a real estate commission!
People who purchase FSBO homes are usually looking for a bargain. They hope you’re going to sell the house for a low price. That’s why they’re here instead of looking at any number of listed homes with a Realtor®. Also, they know that you’re saving the sales commission, and they expect you to pass a good portion of your savings along to them!
Remember too, that they expect you to have already added your advertising and other selling expenses onto your asking price — they’ll want you to discount most of that as well. Be ready to handle these issues in your discussions of price. Once you find a prospect that’s actually ready and able to buy your home, get your contract and financing addendum out and start writing!
Please be careful how you fill in the blanks and the checkboxes. You are putting together a legally binding contract! Seek advice from an attorney if you have any questions about what you’re doing. Remember to provide the buyer with your disclosure as mandated by State law.