Listing your home for sale by owner (FSBO) isn’t easy, you’ll need to carve out lots of time and do your research. But if you’re up for the challenge, you could save money by shaving off extra costs.
Sometimes people choose to sell their houses without using a real estate agent, for various reasons, which is referred to as listing a home “for sale by owner” or FSBO in the real estate world. While selling your home yourself may seem like good way to save money, FSBO has its pros and cons. Let’s take a quick look at these pros and cons, and how to list a house for sale by owner.
Should you list your home FSBO?
Deciding whether FSBO is the right route for you is the first step on your home selling journey. Some people have great success with selling their homes themselves, others have found it more challenging.
- One of the challenges around FSBO is that it’s time consuming, so you’ll need to make sure that you have enough available time to manage the transaction from beginning to end, which includes showing and marketing your home. Another challenge is that selling a home is not a simple process, so you’ll need to know what you’re doing and the legalities of the sale will require attorneys and other professionals.
- If you’re thinking about listing your vacation property in another state yourself, this may not be the best option because handling this transaction can be quite complicated if you aren’t familiar with the ins and outs already.
- The upside however is that you’ll save money, and once you’ve completed the transaction, you’ll have an in depth understanding of the process which will help you if choose to do it again. The typical commission for real estate agents is between 5-6%, so on a home sale of $200,000, for example, you could save between $10,000 and $12,000.
- Another benefit to FSBO is that you’ll have control of the entire process yourself and can essentially drive it, even perhaps speed it up, if you’re very responsive to buyers or have a buyer in mind before you list it.
- If you’re looking to learn more about real estate or thinking about investing and want to gain a deeper knowledge of the home selling process, this could be a good option for you.
Start with a plan
Any big decision should start with a plan. In this case, it’s a good idea to begin with a step-by-step plan that covers each milestone in the selling process. It should also identify the points where a professional is needed and which kind of professional you need to find. This will help you locate what you need ahead of time and be ready to go once you reach each step.
Pricing is key
Setting the right price for your home is crucial, but it can be one of the most difficult aspects of listing a house yourself. You’ll need to do a market analysis of comparable properties in your area, to see what their values are. Real estate websites often give you a good guideline as to what house prices in your area are, so they will be a useful place to start. You should also look at market trends over time, as well as what price your home could fetch if you were to do some home improvements.
If you’re unsure, you could hire an appraiser to help. This will be necessary in your home buying process anyway, so it won’t be a waste.
Spruce it up
Once you’ve set the right price, it’s time to spruce up your home and get it ready to be marketed and shown. Have a cleaning crew do a deep clean, declutter everything you can, make sure that your home looks neat and tidy from the outside too, and hire a professional photographer to capture your home in just the right way. Small improvements to your home can also be done at this point, such as new lighting, which can go a long way to improving the immediate impact of your home for buyers.
Let’s get listing
Once your home is in tip-top shape it’s time to list it and begin marketing it as hard as you can. Social media is a great tool for this because you can reach a wider audience at no cost. There are groups that you can post to as well, with hundreds of people looking for homes to buy. There are many real estate websites where you can list your home, and a simple sign outside your home be more impactful than you’d realize, for people driving past and looking for homes in your area.
Make sure that you know the disclosure requirements for selling in your state. There are certain items you may be required to tell buyers about your home, for example structural problems or the use of lead paint. Before you begin liaising with any buyers, you’ll need to be aware of these points.
Remove the emotion
This is the hard part when it comes to selling your home yourself. You’ll need to detach yourself from it emotionally and focus on it being a house and not your home. Buyers all have different needs and visions, and these might not align with how you have done your home. You’ll need to be responsive to buyers when they call, text or email, as well as flexible to their wants and needs. This process can take time, and may involve showing your house many times, but eventually you should find a buyer that you can work with.
Negotiate and confirm
Once a buyer has made an offer, this is the time to check whether they have their funds in order by asking them for their mortgage pre-approval letter or proof of funds letter, if they’ve used another type of lender. You can find out about the down payment that has been made, along with the loan program that they’re using, to see how serious they are. Bear in mind that you should typically respond to an offer within 2-3 days.
Next, you’ll need to negotiate on the price with the buyer. Buyers will be expecting a negotiation and you could potentially get a higher price for your home than intended, especially if there are a few buyers interested in your home.
Time for attorneys
Now is the time for a real estate attorney to assist you with the documentation you’ll need, such as the title transfer and the myriad of other legal requirements associated with a home sale. Some states require a home sale to involve a real estate attorney, but even if yours doesn’t, attorneys can be extremely useful with their recommendations and referrals. They will also ensure that you get the right deal, and that you aren’t short-changed in any way.
Another option which you can consider is a new way to sell your home online through some of the most popular real estate websites. Essentially, you can sell your home to an iBuyer, which is one of the real estate websites.
After submitting a questionnaire about your home, you can receive a cash offer within 24 hours. The company may do a home assessment and you’ll have the option to take care of any repairs that need to be done or let the company do it and take it off the sale price. It’s certainly an interesting new option worth considering for those going the FSBO route.
The choice is yours
It’s difficult to say whether selling your home yourself is the best option, but we hope that you feel more comfortable to make this choice now that you know the pros and cons and have a clearer understanding of how the process works. It’s not the most common way to sell a home, but it may be the right choice for you if you’re up for the challenge.