FSBO: What You Should Know About Selling Your Own Home

The key to selling your home yourself is being properly prepared. If not, your home may stay on the market longer than expected because it is not attracting or receiving offers from qualified buyers. And this is where many homeowners get frustrated and start thinking about giving up the dream of selling their homes themselves. However, some sellers are very successful selling their own homes, and you can be one of them.

This report has been specially prepared to help home sellers like you understand the process so you can sell your home quickly and for the price you want. To help you prepare, consider the following tips before deciding if this is the right approach for you.

  1. Price your home correctly. Setting the correct sales price is essential. Setting the price too high can be just as bad as setting it too low. Home prices are determined by fluctuations in the market and not by your emotional attachment to your home or what you think your home is worth. To establish a realistic price, compare the price, features and condition of similar homes both in your neighborhood and in places where similar homes have been sold in recent months. It is also important to be familiar with the terms of each potential sale. The terms are usually as important as the price in the current market. Create a careful budget of your selling costs and prepare a net income sheet to determine an informed estimate of what you can expect to gain from the sale of your home. Potential buyers can request a similar analysis of purchase costs.
  2. Prepare your home for sale. First impressions are crucial. Make sure your home makes a positive statement by carefully inspecting all the details and viewing it, as objectively as possible, through the eyes of a buyer. Don’t ignore necessary repairs and fixes – your prospective buyers certainly won’t! Your job is to make sure your home stands out favorably from the competition.
  3. Make sure you have all the necessary legal documentation. There are many important contracts and legal documents that you need to assemble, complete, and understand when selling your home. Below is a partial checklist of the forms you will need for prospective buyers and for legal documentation.
    • Mortgage payment
    • Loan application
    • Deposit receipt
    • Property Profile Datasheet
    • Buyer Cost Sheet
    • Closing and liquidation
    • Personal property
    • Exclusion list
    • Property study
    • Seller’s Statement / Plot Rendering Plan
  4. Market your home effectively. Beyond the sign on your lawn, you need to find effective ways to spread the word that your home is for sale. You can reach local buyers with newspaper ads, but you will only reach a small part of the market as possible. Be sure to include buyers who are already working with a real estate agent. To locate them, notify as many major agents as possible in your market in case your client’s criteria match what your home has to offer. Out-of-town shoppers are an important target too, so create a strategy to reach them as well. Above all, be very customer service oriented and make it easy for pre-qualified buyers to see your home. That means making sure someone is always available to answer the phone, respond promptly to messages, and be ready to give qualified prospects a tour of your home as quickly as possible.
  5. Be objective when showing your home. Make sure to keep your emotions out of the sale of your home. The best way to do this during a projection is to stay physically in the background. If a prospective buyer says something negative about your home, it’s best to counter this point of view by drawing attention to the positives rather than being defensive.
  6. Prequalify potential buyers. Don’t waste time entertaining buyers who can’t afford to buy your home. Research your financial situation with respect to job security, salary, debts, liabilities, and solvency.
  7. Trade with efficiency and knowledge. There are many details that need to be worked out before a sale is considered final: price, terms, inspections, date of possession, and buyer concerns and objections, to name a few. You need to fully understand the contract you have drawn up so that you can, in turn, explain the details and ramifications to the buyer, and make any necessary modifications to the sale. Have your real estate attorney thoroughly examine the contract you use. Some real estate brokers may be willing to help you do this. While this is happening, work to keep the buyer’s interest in your home so it doesn’t wane during negotiations.
  8. Know your buyer. Your goal during negotiations is to control the pace and set the duration. Try to determine what motivates potential buyers. Do they need to move quickly? Can you afford the sale price of your home? Answering these questions will give you a head start in the negotiations – you’ll know what you need to do to get what you want.
  9. Don’t move before you sell. Studies show that selling a vacant home is more difficult than selling an occupied one. An empty house seems desolate, forgotten, and simply unappealing. And it could even cost you money. If you move before you sell, you are also letting potential buyers know that you have a new home and are motivated to sell quickly. That, of course, can give the buyer an edge at the bargaining table.
  10. Understand why you are selling, but keep your reasons to yourself. Just as important as understanding your buyer is understanding yourself. Your reasons for selling can affect everything from how you value your home to how much time and money you spend preparing it for sale. And knowing your motivation helps you determine your priorities: the money you’re going with, how long your property is on the market, or perhaps both. Different goals dictate different strategies. Someone who prefers to sell without a real estate agent to save commission would indicate that money is a primary consideration (see “How to Assess Your Net Profit” below). Whatever your reasons, it is very important that you keep them to yourself so that you do not put yourself at a disadvantage during negotiations. If someone asks why you are selling, simply tell them that your housing needs have changed.

How to evaluate your net profit

To see if you will succeed in selling your home yourself, consider that most buyers use real estate agents because it costs them nothing (the seller pays the agent’s fees). Be careful: Buyers, investors and speculators looking for properties for sale by owner are often looking for a bargain. Low bids from these buyers will generally pay you much less in the long run. Determine for yourself the following:

  1. You should be as prepared as possible with your marketing, negotiations, evaluations, presentations, and all legal matters.
  2. Calculate what it will cost you to effectively market your home and gather all the necessary materials, from the “For Sale” sign to the contracts.
  3. What price will a buyer like For Sale by Owner offer you, minus the costs identified in # 2 above? Is this net amount higher or lower than the price an experienced agent could pay for you minus your commission?

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