Are you thinking about selling your home via FSBO or For Sale By Owner? Before proceeding with this, you must know about a few factors and options that you should carefully assess first before finalizing a sale. Yes, through your own efforts, you can successfully sell your home. But if this is your plan, you must understand a few things first.
For one, it's crucial to hire a real estate attorney who can draft and check related legal documents. During the home sales negotiations, you must also see the potential buyer as your adversary since both of you will want to get the best deal possible. Below are more details about FSBO so that you can check if you are truly ready for it.
1Know The Usual Commission Amount
In general, the commission for a real estate agent ranges between 4% and 6% of the total value of a property. There are times when the commission varies, depending on the location or area, seller, and other factors. If you ask sellers, most of them will admit that agent commissions aren't cheap, and if they could avoid paying it, they would.
To illustrate, when you sell a house for $300,000, the commission will be about $12,000 to $18,000. Such amounts are significant, indeed. The good news is that many homeowners do manage to sell their homes on their own with favorable outcomes.
2Understand "For Sale By Owner" Sales
Homeowners sell around ten to fifteen percent of homes through FSBO; in other words, they don't use real estate agents. Here, the greatest advantage of the seller is that he won't have to spend money on commission, which also means that he could even choose to reduce the price so that his property will sell faster. You can also find success using the FSBO strategy.
However, the FSBO selling technique isn't for everyone. For one, you must be willing to spend some time to work on this project, plus, you should possess the right personality so that you can deal with buyers properly. Keep in mind that it's not just about sticking a "For Sale" sign in your front yard and waiting for buyers to purchase your home right away.
3Sell Your Home Through Your Own Efforts
Before you go ahead and put your property on the market, make sure that you are mentally, emotionally, and physically prepared to do all the work that's supposed to be part of an agent's job. By doing the selling on your own, you'll be able to save a significant amount. Some individuals believe that this strategy can only be successful in a strong housing market.
Some believe that FSBOs works best in a seller's market. This has some sense because, during such times, the demand is higher than the supply, so to speak; in other words, there are more buyers than homes going on sale. Nevertheless, the reality is that it is possible to sell your house even when the housing market is at a lull.
4Sell Regardless How The Market Is Doing
Whatever the condition of the housing market is, the numbers of successful FSBO sales remain the same, more or less. How the market is doing is not a huge factor. Still, you should understand the reality that selling your home without a realtor is a big challenge.
You can compare it to doing your own taxes, wherein you're better off hiring an expert who can do the job for you efficiently and quickly. But, you can first observe how things are done and be present during negotiations, and when the paperwork is finalized. Still, this doesn't mean that you can't sell your property successfully even if it's your first time.
5Consider Hiring A Realtor
If you have zero experience in selling properties, it's more prudent to hire a real estate expert to avoid getting yourself into trouble. After gaining some experience as regards buying and selling, you can then tackle the task on your own. When you do, keep in mind that you are directly marketing your home to would-be buyers. Most buyers are nice people, and they are looking for a home. However, once someone makes an offer, see him or her as an adversary, because negotiations are about to begin.
6Treat Prospective Buyers As Opponents
You are competing with a potential buyer because he or she also wants the better deal, which will be the opposite of what your aims are. Naturally, you want to sell high, but a buyer will want to buy your property at a lower price. Perhaps the buyer also wants to get a few additional items, like refrigerators and other appliances, as well as furniture. You must protect your own interests.
Of course, a buyer will want the better deal, like getting a three percent financing agreement. Perhaps you prefer that he applies for his own loan, or maybe he could pay you a higher interest rate if you're going to get one for him. Although the negotiation process can be tedious and stressful, always remain friendly, yet businesslike even when facing a fierce and perhaps demanding buyer. Do you believe that you can tackle this particular task? In addition to negotiations, you also have a lot of paperwork to take care of.
7Other Issues That You Must Deal With
If you decide to sell your home on your own, not only do you have to pay a deposit, but you must also see too many other issues like deeds, escrow, paperwork, as well as the disclosures. Real estate lawyers often handle such issues, which is why they are very knowledgeable about these things. As for you, you probably only come across these problems once every ten years, which means that the usual documents and paperwork regarding house sales are very new and difficult to handle for you, plus mistakes can lead to serious legal issues. Hence, it's more efficient to opt for the safer way. Instead of doing the paperwork on your own, hire a real estate attorney or a reliable agent who can do all the necessary paperwork for a fee or lower commission.
8Hire A Lawyer To Draft Legal Documents
Improperly or incorrectly drafted sales agreements and other legal documents can cause a lot of legal troubles for you unless you are also a real estate specialist who knows what he's doing. If not, hire an expert for these types of things; doing so won't be too costly, and it's easy to find one through FSBO websites. To get some info regarding experts whom you can approach about sales and other legal paperwork, check out some websites which include a lot of important details for homeowners who prefer to sell their homes on their own. If you need to consult with a lawyer who specializes in property issues, you can also find one through these websites.
9Work With A Trusted Real Estate Attorney
There are all sorts of lawyers, and if you ask for help from one who isn't an expert on property matters, you could get into trouble. Don't expect a buyer to exert undue effort to help you out. Always remember that buyers will always look out for their best interests. They usually think that a seller must do things properly, especially since he's the one who's spending a significant amount for sale.
As for you, you have to ensure that everything is ready, even the open house. If someone asks and you're not prepared to do the tour, you could be missing out on a huge opportunity to sell. Remember that there will always be other homes for sale and other agents who are always ready to show would-be buyers around. So, readiness is key.
Now, you have ample info to properly, decide if FSBO is for you or not. In case you are still pretty determined to go the FSBO route, be sure to hire a real estate attorney who can take care of the legal documents and other issues that need to be seen to. Hopefully, everything will turn out well for you.
Jackie Wing is an Alaska native, who enjoys snowboarding more than is probably socially acceptable. She lives in Anchorage with her two dogs Reese and Peanut, or as she likes to call them "Thing 1" and "Thing 2."