for sale by owner advice

[Jake&IzzyLand]

Have any of you sold your homes for sale by owner? What was your experience like? Did you end up saving money not using a realtor? How did you ensure success?

 

[seashoreCM]

Yes, I have sold homes "by owner" before.

It helps a lot if you have the needed paperwork on hand ready for a prospective buyer to make an offer with and even the next step, enter into a purchase and sales contract. You need to understand how to fill out these documents.

You don't need to have a "relationship" with banks or mortgage companies.

It is recommended that, prior to starting the process, you engage an attorney who knows real estate to help you out if you feel unsure of yourself.

The most important part is going there and doing the showing of the home as needed.

 

[Narnia_girl]

I've sold two houses by owner, and I'd do it again. First thing I did was read the book "Dress Your House For Success" and follow it very closely. Hopefully it's updated now, my copy is nearly 20 years old.

Research prices in the neighborhood, make sure you have a lawyer, and just do a lot of reading on how to sell by owner.
You might feel uncomfortable when people are walking through your house. We just used our best judgement, made sure no valuables were laying around. Often we sat on the patio while they looked so they wouldn't feel uncomfortable either. Depends on your area, maybe you need to walk them through.
In my town Realtors earn 6-7% and I'm sure they earn every penny, but we were/are willing to do the work ourselves and save thousands of dollars.

 

[CaoilinnsMom]

I think researching like PP said is a good idea. You also need to have a good feel for the real estate market in your area. Is it slow?, would your house be in high demand? If the latter is true, you will have no problems. You can engage a real estate agent flat fee to list it for you and do all the leg work of open houses and showing it yourself. It will save you some money in agent fees, but if the buyer has an agent your will still need to pay their fee.

 

[DisneyCowgirl]

You will save the 3% that would be paid to your realtor, but would still have to pay the 3% to the buyer's realtor.

These days, the seller's realtor puts a lock box on the door with a key in it. The buyer's realtor then just unlocks the lockbox and shows the house--the seller's realtor isn't even there. But you'll want to be included on the MLS so that buyers' realtors will know your house is for sale and will bring them to look at it.

Check out flat-fee services that will put your house on the MLS, provide you with the lockbox, assist with scheduling the showings, and the forms you will need. Here is an example:

http://www.creekviewrealty.com/

 

[mrsboz]

We sold our townhouse by ourselves. it was pretty easy because it is a huge development so there was a lot of traffic in there. We didn't have to pay any realtor because the person bought it themselves and didn't have any representation. we did pay a lawyer though to do the paperwork. It definitely makes a difference if you get a lot of traffic going by your house otherwise you would probably have to pay a lot to advertise. Good luck

 

[artemis4]

As a realtor, my real advice is hire a realtor.I'm totally serious because I've seen too many FSBOs sell their house for less than it was worth or cause themselves huge potential legal problems without a clue of what they are doing because of things they say or do during the pre-contract stage. Even Dave Ramsey says hire a realtor: http://www.daveramsey.com/blog/make-more-money-selling-your-home Just last year, I had buyers ready to purchase a house that the owners had FSBO offer on. Market price and my buyer's offer was $19K higher than the offer they accepted. The potential commission for my offer would have been $10k, so they lost $9000.

If you do FSBO, though, the biggest advice I have for you is hire an attorney. Then, speak carefully when showing the house so that you don't accidentally warrant something you didn't mean to. Finally, make sure that you have all of your state mandated disclosures.

 

[mondragon]

As a realtor, my real advice is hire a realtor.I'm totally serious because I've seen too many FSBOs sell their house for less than it was worth or cause themselves huge potential legal problems without a clue of what they are doing because of things they say or do during the pre-contract stage. Even Dave Ramsey says hire a realtor: http://www.daveramsey.com/blog/make-more-money-selling-your-home Just last year, I had buyers ready to purchase a house that the owners had FSBO offer on. Market price and my buyer's offer was $19K higher than the offer they accepted. The potential commission for my offer would have been $10k, so they lost $9000.

If you do FSBO, though, the biggest advice I have for you is hire an attorney. Then, speak carefully when showing the house so that you don't accidentally warrant something you didn't mean to. Finally, make sure that you have all of your state mandated disclosures.

Totally agree. My neighbor just did it FSBO and priced his home over 100k out of the market because he thought his home was as nice as a home sold just down the road that was totally redone and was on a canal. His home was stuck in the early 90's with tons of work that needed to be done. He got desperate and took a lowball offer 50k less than the value of his home. If he would have had a good realtor they would have found out the true value of his home. Also most people shopping for a home has a realtor. You have to pay that realtor plus the attorney fees.

 

[DisneyHardin]

I agree with using a realtor. It is very hard to judge how much your house is "worth" unless you do lots of leg work figuring out comps in your neighborhood. When we sold our last house, we wanted to ask almost $10,000 more than our realtor suggested. We decided to go ahead and go with her price since she was the expert - we sold the house in 1 week for only $1500 off the asking price. If we had started out the gate $10,000 higher, I'm sure it would have sat on the market much longer.

 

[seashoreCM]

You will save the 3% that would be paid to your realtor, but would still have to pay the 3% to the buyer's realtor.

It's your choice whether to let a broker bring a specific buyer to your house versus enter into a non-exclusive (open) listing letting him bring other buyers at any time versus not talk to the broker at all.

 

[Jake&IzzyLand]

Thanks, all. I have researched comps and I plan to price below the two most recent sales. I was not aware about paying the buyers realtor, do thanks for that.

 

[Narnia_girl]

Thanks, all. I have researched comps and I plan to price below the two most recent sales. I was not aware about paying the buyers realtor, do thanks for that.

What happens is a Realtor sees you have your home FSBO, they ring your bell and tell you they have a client interested in the area and would like to show your house to them. Would you be willing to sign a one-time fee, so that the Realtor gets a commission if in fact his client ends up buying the house? You can choose to cooperate or not. I've actually done this on our last FSBO. We agreed with the Realtor and signed a form that we would pay him IF that particular client bought the house. They did not end up buying it; we sold the house a week later to someone else and paid NO realtor fees.

 

[teller80]

Thanks, all. I have researched comps and I plan to price below the two most recent sales. I was not aware about paying the buyers realtor, do thanks for that.

The bolded leads me to believe you need a realtor. Are you saving any money this way? If you hire a realtor and price AT what the other houses sold for you'll come out even.

 

[mondragon]

The bolded leads me to believe you need a realtor. Are you saving any money this way? If you hire a realtor and price AT what the other houses sold for you'll come out even.

Exactly. Why would you do that. What are you actually saving when you price it below market value.

 

[artemis4]

One other thing I meant to add yesterday: If you FSBO, look up fair housing laws and examples of how people have accidentally violated them. It is surprisingly easy to do even when you do not intend to discriminate. You don't want to accidentally violate these laws in your FSBO advertising or in what you say when showing a house.

 

[Jake&IzzyLand]

I think people are looking for a good deal when buying a home, so if two homes on my lane sold for x and I price mine a little below x, I feel that it should sell quickly. Time is money, you know.

 

[Jake&IzzyLand]

One other thing I meant to add yesterday: If you FSBO, look up fair housing laws and examples of how people have accidentally violated them. It is surprisingly easy to do even when you do not intend to discriminate. You don't want to accidentally violate these laws in your FSBO advertising or in what you say when showing a house.

Thanks, I will look them up.

 

[mondragon]

I think people are looking for a good deal when buying a home, so if two homes on my lane sold for x and I price mine a little below x, I feel that it should sell quickly. Time is money, you know.

When you sell FSBO, you have to deal with multiple people with the sale. The potential buyer, their agent/realtor who you will have to pay, their attorney if they have one, the home inspector who will most likely find something wrong, property appraiser if there is an issue with the price, closing agent and anyone else who could be involved.

 

[unrequited23]

We are current hunting for our second home. (The first sold in 26 days, for $500 below asking--using a realtor.) The typical buyer in our market expect to get 5% off list price and have no qualms with a starting bid 10% lower. My advice for selling by owner 1) give yourself wiggle room when pricing, so the buyers feel like they are getting a deal 2) find a reputable real estate attorney before putting up your first sign 3) zillow, trulia, facebook, etc. are great for marketing your property. I won't call a FSBO if I haven't seen pics first. 4) cook a pot roast in a crockpot when you have an open house-don't use those overly scented candles.

 

[barkley]

I will comment that you had better be VERY knowledgeable about real estate laws where you live. I say this b/c we've either been involved in or known those who have been involved in home sales/purchases that had soon after closing issues as well as months to YEARS after closing, issues (in some states there are protections for buyers that extend decades after closing). in our case in the end it was almost $20,000 that the seller had to come up with within a few months of purchase, in a friend's at minimum $15,000 in legal fees alone in addition to the actual issues expenses a few years post purchase (neither were fsbo-and in the friend's case despite the sale being 'as is' our county and state laws trumped that provision in their sales contract).

when we last sold it was just prior to the real estate bubble bursting (seller's market, multiple bids, well over asking). the REPUTABLE realtors in our area would take a client to see a FSBO if the client specifically asked to see a particular home, but absent that they would never suggest one for a viewing. reason was the real estate laws were so specific they knew that by and large the average fsbo seller would not have the knowledge to correctly complete a sale such that the buyer's realtor ended up having to do much more work. around here (different state) now-the fsbo's are most often so off in pricing they sit for ages, get pulled from the mls, get relisted at a new price only to get pulled repeatedly and go unsold until a realtor gets involved.

Zillow and the other sites have to be looked at with a grain of salt-they are not entirely accurate (my former home shows we sold it for over $200,000 less than we actually received). there's some mechanism w/in Zillow where a home owner can get the site to change the value of their home-not sure how it's done but we had a fsbo home that managed to get their Zillow value upped by over $150,000 overnight through that mechanism (didn't sell at that, ended up sitting on the market for months until they got a realtor who listed at the true value). a much more accurate reflection of home prices are through county assessor's records (and even those only reflect the 'sales price' not how much the seller kicked back for closing costs, repairs and such/as well as how much was for the physical home vs. the home and certain contents like the seller leaving high end appliances, pool tables, hot tubs, lawn and garden equipment...).