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Can You FSBO? Here’s How to (Really) Save Money Selling Your Home Yourself
When the average real estate agent earns a 4%-6% commission, it’s hard not to want to save all that money for your move, instead.
If you’re listing a house for $250,000, for example, you’ll fork over as much as $15,000 for a commission - and that’s no small chunk of change.
But, says, real estate broker Elizabeth Weintraub, most homeowners who decide to strike out on their own to save on closing costs can make costly mistakes, too.
“[Owners] who sell by themselves lack the expertise to accurately price a home to sell and often fall short on marketing knowledge and negotiation skills,” explains Weintraub at The Balance.
Not sure if FSBO is for you? Here’s everything you need to know before you stick that “For sale by owner” sign in your front yard.
Master the Art of the Listing
Price Your House
Before you slap a price tag on your “For Sale” sign, do some research about your local market.
How quickly are houses selling in your neighborhood? What are the most obvious comp properties in your area?
Homeowners can make real mistakes when listing their own homes - and these mistakes will affect their bottom line.
“[Taking] an objective view of your local real estate market will help you manage your expectations, as well as price and market your home properly,” explains real estate expert Hal Bundrick at NerdWallet.com.
“In a seller’s market, you might expect multiple bids above your opening listing price,” Bundrick adds. “But in a buyer’s market, you might have to discount your asking price.”
Overvaluing your property might come at a steeper cost, driving potential buyers away.
According to real estate agency Redfin, “Overpricing by $10,000 can cause it to sit on the market and ultimately force you to sell for less than if you had priced it right initially.”
Don’t forget to check in with an appraiser or home inspector, too, since these professionals often have advice on repairs or home improvements that will impact your budget - and your final price point.
Set the Stage
Plenty of real estate agents work with staging companies - the wizards who come in and make your house look like a million bucks to interest buyers.
And for good reason. According to Betsy Wilbur, a professional stager based in California, properties that use staging companies sell more quickly - and at a better price.
“Staging can save you from a costly price reduction,” Wilbur told Forbes.
“A staged home will sell for 17% more on average than a non-staged home, and 95% of staged homes sell in 11 days or less,” she added. “That is statistically 87% faster than non-staged homes.”
Whether you add a fresh coat of paint or sell some of your furniture, the little details in a decluttering effort will make a big difference.
Real Estate Marketing 101
Let the Professionals Help
When it comes to marketing your house online, professional photographs and a video tour of the interior are guaranteed to help move the property more quickly.
A 2013 study from Redfin found that homes professionally photographed for listings sold at much better prices than those photographed by do-it-yourselfers.
“For homes listed between $200,000 and $1 million, [...] homes with listing photos taken with DSLR cameras sell for $3,400 to $11,200 more relative to their list prices,” reports the real estate site.
Professional photos will only set you back a few hundred dollars, so it’s well worth the investment to attract the right buyer.
Hold an Open House
Don’t be too shy to advertise and hold open houses. The tactic works - though it will require a bit of professionalism on your part to be effective.
“Let potential buyers lead the way as they explore your home, and point out special features,” advises real estate expert Mandy Walker at Consumer Reports.
“Make sure they leave with a copy of your sales brochure,” Walker adds. “Follow up with an e-mail or a call thanking them for looking at your home, and use the opportunity to ask whether they have additional questions.”
Most buyers will respect that you’ve made the effort to be professional, organized, and courteous - which means a better offer down the road.
Need another reason? Weintraub notes that fellow agents who hold open houses make 20% of their sales using the tried-and-true marketing device.
Work with Buyer’s Agents
Having trouble getting buyers in the door? It may be because your buyers are also using real estate agents - and those agents may need an incentive to work with you.
Real estate attorney Zachary Schorr suggests playing ball with seller’s agents in order to get the job done.
“State in big bold type in your online ads and your lawn sign that you will pay a 2.5% commission to the buyer's agent,” Schorr told Time.
Once you get buyers in the door and an agreement on paper, you and the agent can split the costs of a normal commission - and you’ll still come out on top.
Crush the Counter Offer
Congratulations! You got an offer - but don’t be afraid to counter.
According to Schorr, negotiations are another area where inexperienced homeowners can lose money. Either they feel compelled to take the first offer that comes their way - or they’re too emotionally attached to the perceived value of their home.
On the other hand, says Schorr, homeowners who are good negotiators might come out ahead in this process.
"You get to control the negotiation, rather than having it filtered through a middleman,” Schorr explained to Time.
"And closing the deal may in some cases be more important to the agent than getting you the absolute best price," he added.
Cut Closing Costs
Don’t get caught off guard by unexpected costs, including disclosure and contingency costs, or potential repairs suggested by your buyer’s inspector.
According to Bundrick, these final negotiations can throw first-time sellers for a loop.
“Contingencies — those “if-then” propositions — can be tedious: ‘If you fix this, then we’ll buy your home,’” writes Bundrick at NerdWallet.com.
“Contingencies are market-driven factors,” he adds. “Generally, the higher the housing demand, the fewer conditions are placed on a sale.”
If you’ve already had your home appraised and inspected - as well as any small repairs addressed - you’ll be able to point to this evidence as added assurance for your potential buyer.
Even if you’re prepared to shoulder the expense of marketing and showing your house, it pays to hire a lawyer during the closing.
From document preparation to title transfers, a good real estate attorney will have your back as you finalize the sale.
“Even if you live in a state where real estate attorneys aren't commonly used to close house deals, you should hire one because you don't have a real estate broker and you need to be sure that your interests are protected,” advises real estate expert Ilyce Glink at the Chicago Tribune.
Need help hiring a good attorney? BankRate’s checklist, “5 Questions to Ask a Real Estate Attorney,” should help you get started vetting local candidates.
Whether you have an independent streak or just want to save money selling your home yourself, managing a FSBO property is no small task.
Make sure you have all your bases covered before you list your home, so you can pocket the bulk of that commission fee!
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