With real estate agents’ commissions often as high as 6 percent of a home’s sale price, it’s tempting to hang out a “For Sale by Owner” sign and save the commission. After all, FSBO would put an additional $16,800 in your pocket if you sell your house for $280,900, the recent median single-family home sale price.
But selling your own home is hard work. It requires time, energy, market knowledge, and some up-front money, says Jim Remley, a Medford, Ore., real estate agent and the author of “Sell Your Home in Any Market” (Amacom, 2008). That may be why only 9 percent of today’s sellers attempt to do the job without an agent, down from 12 percent in 2006. If you plan to join that minority, use these tips for greater success.
Be sure you’re up for the job.
You must have plenty of time to show your home, have no problem negotiating, and enjoy the challenge of marketing your own house, says Brendon DeSimone, a real estate agent and the author of “Next Generation Real Estate: New Rules for Smarter Home Buying & Faster Selling” (Changing Lives Press, 2014).
Price it right.
An online appraisal service can help. A free tool on ForSaleByOwner.com, for example, can determine a price range based on public-record information. Also, enter your address on Zillow’s website to find your estimated home value and see what similar nearby homes sold for recently. Check newspaper ads and real estate blogs for a read on the market, and spend several weekends going to open houses near you, and track their final selling prices.
Declutter and clean up.
Store the family photos, fix the loose doorknob, clean every surface, and slap a fresh coat of neutral-colored paint on the walls. To present your home in its best light, you can arrange a 2-hour consultation with a professional stager for about $300. Search for a stager on the International Association of Home Staging Professionals’ website.
Use online tools to advertise.
A mini industry has sprung up to help For Sale by Owner sellers for a fraction of commission charges. Among the services are advertising in magazines and websites, and providing disclosure and contract forms and other sale documents, weatherproof information boxes and flyers, seminars, and educational booklets and materials.
Realflyer, for example, lets you create professional-looking brochures starting at 32 cents each. Owners.com will list your home (including photos) free for 30 days. For $295, it will list your home for six months on its site as well as on Realtor.com, Trulia, and Zillow. For an additional $100 it will add your listing to the Multiple Listing Service for six months, where you’ll get the most exposure, but you have to commit to paying a buyer’s agent’s commission if one represents your buyer (generally 2 to 3 percent of your sale price).
Feature pictures and a video tour in your listings, and make sure you also include driving directions, heating and cooling sources, and your school district.
In addition, publicize your listing on free sites such as Craigslist, Facebook, Google Plus, and Twitter. Don’t waste money on newspaper ads and local real estate guides; only 1 percent of people find their home through those print ads, the NAR says.
Don’t skip the sign.
A “For Sale” sign, after the Internet and a real estate agent, is the most effective tool for attracting buyers, according to NAR surveys. Place it as close to the road as possible, unobstructed and with a phone number that’s easy to read and that someone will answer day and night.
Show like a pro.
When you show people your home, ask them to sign in and provide you with their e-mail address and a phone number. (See samples of open-house registers or purchase kits for $22 to $30 at Britton Products.) Let potential buyers lead the way as they explore your home, and point out special features. Make sure they leave with a copy of your sales brochure. 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. For safety’s sake, have someone else in the home during showings.
Look for buyers with commitment.
A potential buyer with a mortgage commitment (which means a lender has verified all of the information on a loan application) is further along in the borrowing process than one who has prequalified for a mortgage (which just means a lender has checked a buyer’s credit). A deal with a buyer holding a commitment is less likely to collapse.
Hire a real estate attorney.
Many states don’t require a lawyer for a sale, but hiring one familiar with sales by owner is crucial. He or she can field offers, help execute contracts, and arrange a closing date.
––Mandy Walker (@MandyWalker on Twitter)
This article also appeared in the March issue of Consumer Reports Money Adviser.
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