FSBO - You Can Do It, Here's How

For Sale By Owner VS Hiring a Realtor - It's all about Money, bottom line

​Maybe we should just sell it ourselves?
It's a question that runs through every seller's mind, the only reason is to Save Money, that's it ... or we'd never try to do it ourselves. If you've never tried then you might think it's easy, however that thought may soon dissipate and you'll be chalking it up to another learning experience.

I'm going to teach you how to do it yourself and what you can expect in the process, but understand that there's more to it than setting a price and placing an ad on the internet.

To properly get a house sold, any person doing it has to do their due diligence upfront, it doesn't matter if it's you or a real estate agent, these things need attention FIRST. Doing your due diligence means answering questions and figuring out key factors that will affect your sale ... PRIOR to ever putting the house up for sale:

 

• What are other houses, similar to this one, selling for?
• What condition is the house REALLY in and how does it compare to others that have sold?
• How long are houses sitting on the market before selling?
• How should advertising be done and what budget is needed for marketing the sale?

It's very possible to sell a house yourself, it really is, and I am going to give you the information you need to do it. You can use this information as a how-to-guide, it's tried and true principles of price setting, marketing, finding the right buyer and getting the sale done.

However,  keep in mind that the real question is - How much are you actually saving? It's not as much as you might think.

Starting out, you've got to do the due diligence as mentioned above.
​If you want to know what houses like yours are selling for, do NOT rely on a website to give you a "estimate" because that's all it is. No computer program is currently available to process all that's needed when establishing a value to a house, because there's just so many factors that have to be considered. Presently speaking, you need a human for the job, and if you can't do it, how do you get someone that can?

The good news is you can find someone, very easily. There is no rule saying you must be getting a loan in order to get an appraisal, so it can be a simple as hiring an appraiser to give you your houses value. Go online and google appraisers+"your city name" and you should get a few results. The costs of an appraisal can vary, however you can figure between $400-$550 and it usually takes about 7 days to complete. 

If you want to go about ascertaining the value yourself, you'll need access to the county recorders information and in some areas that's as simple as getting on the computer and going to their website (in other areas it requires more work - think California). To properly get a house's value you must do what is called a comparative market analysis, similar to what an appraiser would do. It's a matter of finding house sales within 1.5 miles of your house, the more recent the sale the better (no more than 5 months old), within 10% of the recorded square footage, similar bed/bath count, similar age and style. The hard part is determining the condition and amenities, however you can google the address of each sold house and often find pictures online. This is not an easy process, it is time consuming and it's a very crucial step because a small error could mean loosing thousands of dollars.

Once you've completed an appraisal or comparative analysis, you'll need to figure out how long it is taking to sell houses in your area. That can be done using a real estate search site such as Realtor.com and you can find out how to in my Free Guidance Post "Finding the Value of Your House" where I have given the step by step process. 

When looking at the condition of your house, it's important to see it through the eye's of a buyer. They're looking for things right and wrong, looking at the interior and wanting space, looking at the exterior and wanting appeal, and they're certainly looking for "issues" inside and out. Grab a pad of paper and go room to room, and look for anything that can be touched up or repaired? Do this again outside, and be honest because everything matters and has an effect on the true Value of the house. 

Advertising and Marketing 
Using a sign in the front yard helps people that are looking for your house find it faster, that's it, find it faster. Well, not totally true, because for a Real Estate agent it's a great big business card, letting neighbors and others that may want to sell have access to their contact info. If you want success in selling the house then put your efforts and money to work where it matters most:

 

• Post cards - You've got to let everyone within a mile of your house know it's for sale because friends encourage friends to live close by
• Starbucks, they usually have a peg board to stick flyers on
• Social media - it's a no brainer, however know that you must remind your friends several times that your house is for sale
• Online - Everywhere available, there are hundreds of places to advertise, not just real estate websites.
• Pay for a custom domain and do a simple website yourself. Then pay for google advertising using adwords
• There is a 95% chance that your buyer is ultimately going to find the house online, that's huge.
• There's a 1% chance that an Open House will bring a buyer and about a 10% chance it will bring a thief.
• There is also a 90% chance that your potential buyer has a Real Estate agent and that agent will want a commission.
• There's a 99% chance that if you do not pay that Real Estate agent a commission, the buyers will buy a different house.

  
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When setting your marketing budget it honestly depends on how much you are going to do yourself. There are pictures that have to be taken, good pictures, I mean GREAT pictures. So have a camera that can do it well, lighting is important too. There's printing, mailing and some web knowledge needed too. If you're going to put the time into yourself then it's safe to figure a budget of about $350.​

Making the house Appealing
​You've got the house up for sale and now it has to be at it's best for potential buyers to see, first impressions, right?

I suggest you go to a few houses and see for yourself what looks good and what doesn't. Model homes are ideal, because they have professional staging companies taking care of it and it really says a lot. Visiting other houses allows you to see the little things that make a big difference, like clutter, lack of light and packed closets.

A rule of thumb is to remember you're moving, so start packing now and get 50% of what you own boxed up (and put the boxes in storage or at least in the garage). Once you've done that then de-clutter some more, if it can be arranged nicely great, if not then box it up. The objective here is to make rooms feel bigger, kitchen counter tops look spacious, and closets look roomy.

Then look at your lights, in every room and outside. Clean the fixtures and replace burnt out bulbs, if there are 3 bulbs in a fixture and one is out, replace all three so they match in color and brightness. Sunlight is important too, so the windows should be cleaned as well as the blinds, because light adds to the space and you want the house to feel as big as it can.

Here comes a buyer - Hopefully they're Pre-Qualified
​Awesome, the hard work is paying off and someone wants to come and see the house. A few things to remember here that are very important-

• Valuables are in a safe or at least a safe place
• All the lights are turned on
• The window coverings are open
• All TV's are off, interior doors are open and toilet seats are down (seriously!)
• Welcome the buyers in with a smile and escort them through each room (do not let them go their own direction)
• If necessary have 2 people available to help show the house, this may make it easier to give the potential buyers a little space
• Offer them a bottled water, it's hospitable and makes them feel welcomed
• Answer their questions, but do not tell stories, they need to picture themselves living there, not you
• 75% of the people make their decisions in the kitchen of a home, this is where you give them more "space"
• Once the showing is over, wait two days and then contact them for HONEST feedback. Understand that if you haven't heard from them in two days, they likely aren't interested, however their feedback may help so be sure to ask for it.

You've got an offer - Now what?
​It's exciting, there's an offer on the table and now it has to be analyzed. I did say analyzed, because price isn't everything, right? You have got to look at the offer as a whole, even if they're offering $10,000 more, every line needs to be read and understood.​

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Here's what should be included in an offer, clearly and in writing:

• A date
• An offer price
• A closing date and date of possession (these are not always the same day)
• Earnest money deposit amount and to whom it will be given to (NOT you, but Title or Escrow)
• Buyers inspection period
• Who is paying for what? Termite, appraisal, title and escrow fee's, HOA transfer fee's, home warranty, etc
• Is it contingent on something? The buyer's may need to sell their house first, however this could be anything
• That they're Pre-Qualified with a lender who has looked at their finances
• List how many days before the appraisal must be completed
• State who may cancel without penalty and when
• What the penalty is for defaulting on the contract
• The offer MUST be signed and dated to be a real offer

 

Now you must decide whether to accept the offer, make a counter offer or decline the offer. This is serious business, be sure to cross the T's and dot the I's because there is a lot at stake here.​
​Hopefully you have already reviewed and selected a title company and escrow company or an attorney too.

Wrapping it up and getting paid
​This is the point that you really must get help, use an attorney or escrow company (maybe both), a title company is needed to record the property and acts as a third party to handle exchange of funds, etc. 

There will be property disclosures that need to be signed between the buyers and sellers, a lot of them. This is where you tell the buyers everything you know about the house ... everything. 

The escrow company or attorney should help with organizing the sale and making sure the contract terms are followed, however they don't have to enforce them. 

Once everything is completed, papers signed, stamped and the buyers loan is completed, then the sale will fund and record. After it has recorded Title and Escrow will disburse the funds, this usually doesn't all happen the same day, it could take a couple of days for you to get your proceeds.

Was it worth it ? How much did you really save?

There's a lot of work that goes into the sale of a house and there's also a lot of time involved in making it happen. If everything is executed properly, then it should produce a ready, willing and able buyer. It's absolutely true that you can sell it yourself, however you should consider what the actual cost is both ways.

Most Real Estate companies will charge 6% to 10% commission on the sale price of your home, there is no argument that this commission is a hit to your profit because it is. And the higher your selling price, the higher the costs, however, there's a cost associated with risk as well, and a higher selling point certainly does have a higher risk. 

Secondly it is important to understand that you'll likely need to pay the buyer's agent a commission, in either case, and that commission will be about 3% of the sales price. If you're using a Real Estate agent to sell your house, the buyer's agents commission comes out of the commission you're paying Your agent, NOT in addition to your agents commission.

​It's better to keep as much of your profits in your pocket as possible, that's obvious. Accomplishing this while still having the Best Real Estate Professional help you is usually the difficult part. USUALLY.
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I'm into All Things Real Estate, right?
As a Licensed Real Estate Broker I can help you with the sale of your house, not only that, but I can also help you with the purchase of your next home. Nearly everyone that sells also has a plan to buy a home, and because of this You are able to save a lot of money when I help you get your home sold.

Here's how, when you allow me to help you sell your house AND make sure you're represented on the home you're buying, you'll only pay 4.5%. That includes any commission that may have to be paid to the buyer's agent.

Consider a buyer's agent that requires a 3% commission, that means on a $200,000 sale the price to have a Great Agent Sell it for you is just $3,000. Also account for the cost of completing a comparative market analysis so you get Top Dollar for your house, the advertising and marketing costs savings to you, add the value of your time and the value of having a professional on your team to take care of all that paperwork.

You're easily spending 40 hours from start to finish (what's your time worth), saving at least $350 on advertising/marketing and $500 on an appraiser. Using this as an example, a Great Agent is only costing you about $50 per hour and brings a TON of value. 

To top it off, this is only paid AFTER the successfully sale of the house, so once again my services to you are Risk Free.

If you'd like to talk about hiring me to help you get a house sold, by all means, feel free to reach out to me.
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YES, help me get it sold for top dollar