For some homeowners, self-reliance can mean more than repairs and renovations. When it's time to put their homes on the market, they adapt the philosophy of DIY to SIY — Sell It Yourself.
An estimated 8% of home sales in 2015 involved the owners making the sale themselves rather than using a real estate agent. Reasons for choosing FSBO (For Sale By Owner) often include the desire to save the commission normally paid to an agent and to have more control over negotiating price. Of course, realtors have their own counterpoints in recommending the services of a professional.
Is FSBO right for you or should you rely on an agent to sell your home? Check out the following tips to help you make an informed decision.
Planning and execution in 7 steps
Selling your home yourself could require a significant investment of time and energy, not to mention money. These guidelines may help you clear some of the obstacles from your path:
- Do some online homework. A Google search will turn up many FSBO websites and news articles. You may also find free webinars on home selling that can help you get a general feel for the process.
- Draw up a budget. It's likely that you'll need to hire a real estate attorney to help you with the legal paperwork and the closing. You'll also have to set aside money for signs, advertising and other items.
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Evaluate the local market. Review local listings for homes comparable to yours. Combined with your property valuation and appraisal, checking prices in your area can help you determine your asking/listing price
Once you've done the preliminary work, you can move on to the selling process:
- Get your home shipshape. A thorough cleaning and a professional inspection can help ensure your home enters the market at its best, cosmetically and structurally
- Take some home glamour shots. The images in your listing must make a good first impression. Consider hiring a professional photographer or do some research on properly staging real estate photos.
- List your home (qualified buyers only). Good places to advertise your home include FSBO websites and neighborhood social media groups. Make it clear in your advertising that you're interested only in buyers who have been pre-approved for mortgages. This way you can avoid wasting time on potential buyers who lack the resources to finance a purchase.
- Make yourself available to buyers and their agents. Answer calls and emails and keep appointments. Few things can dampen a potential buyer's enthusiasm than a showing turning into a no-show.
Through it all, maintain the proper mindset. Remember all the steps that went into buying your home? If you go the FSBO route, you'll be taking part in the process from the perspective of seller instead of buyer. It's nothing personal — just business.
Taking a look at the pros and cons
Selling your home by yourself could eliminate a 5% or 6% real estate commission and let you negotiate terms directly with interested buyers. On the other hand, what about drawbacks cited by FSBO critics?
The National Association of Realtors (NAR) maintains that the financial benefits of using a real estate agent outweigh saving on commission costs. The NAR cites 2015 statistics indicating that a typical FSBO home can sell for 23 percent less than a home sold through an agent.
Other considerations involve convenience. Additional statistics from NAR suggest that FSBO homes stay on the market longer. It's not as easy for an unlicensed owner to get access to the Multiple Listing Service (MLS) used by real estate agencies.
Also, owners unfamiliar with real estate lack the experience and contacts that an agent can bring to the process. An accomplished agent probably has more familiarity with the local market and greater knowledge of the factors that can make or break a sale. If a potential buyer is using an agent, the agent may have reservations about dealing with a seller who lacks professional credentials.
Make the decision to sell it yourself carefully
A home represents the biggest financial investment that most Americans will make in their lifetimes, and any decision that could affect that investment requires thorough consideration. Weigh the pros and cons of FSBO and do some research before deciding to navigate the housing market on your own.
Barry Bridges writes for SafecoInsurance.com and HomeownersInsurance.com, an online resource for homeowners and drivers across the country. Offering automobile and homeowners insurance quotes, consumers rely on HomeownersInsurance.com for competitive rates from top-rated insurance carriers. The HomeownersInsurance.com blog provides fresh tips and advice on a range of financial topics to help homeowners and homebuyers make educated decisions about their insurance purchases.
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