A For Sale By Owner property, usually referred to as an FSBO, is easily described as a homeowner selling their home without the representation of a Real Estate agent or a Broker. 

    As professional real estate agents we know that there are many different reasons that come into play when deciding to sell your home.  Believe me when I say we've heard it all!  Some of the most popular reasons to sell are that you need to upsize or downsize, a job relocation, to move closer to family or move to a more desirable area.  No matter the reason, when you decide to sell you have options.  You can use a Realtor, you can sell it yourself (FSBO), or take a cash offer from and investor or ibuyer company like opendoor or zillow offers.

(more on this in a later blog).  

    Most commonly a homeowner that decides to put there home FSBO does so to save money.  duh! Why pay a real estate agent or broker a commission when you can easily sell it yourself and save 4-6%? 

Whatever the reason is, its important to know that according to the National Association of Realtors less than 10% of FSBO's actually sell.  This is the reason for today's BLOG.  We want to help you in any way that we can, even if that does mean sacrificing a commission here and there.  If you do try to sell FSBO and become a part of the 90%, we want you to be completely comfortable knowing that you, can trust us to help you, and if you are successful, then we hope that we played a small part in that success and you will spread the word.  Its a win win!    

1. PREPARE YOUR HOME BEFORE LISTING IT FOR SALE

Do not list your home before it's ready!  A great real estate agent will guide you on prepping your home to give it the best chance at a sale.  Putting your home for sale before it is ready can drastically hurt your chances.  Here are some pre listing tasks to check off to make your home stand out from the rest. 

• Declutter
• Professionally clean floors and carpets
• Freshly paint rooms 
• Complete any neglected minor repairs
• Make sure you have curb appeal 
• Replace outdated light fixtures 

There is only one chance to make a great first impression, neglecting these tasks could be costing you a sale. 

2. LEARN TO SCREEN POTENTIAL BUYERS 

When you list your home FSBO you will likely be flooded with inquiries about your home.  Neighbors, Investors, Tire Kickers, and Potential buyers will all be contacting you to see your home. if you are not careful you could waste countless hours showing your home to people that are unqualified and may not have any intention of ever buying your home.  A  good realtor will always vet a client before ever showing them a home.  Since a FSBO has no way to vet a potential buyer we strongly encourage that you establish a relationship with a local mortgage representative.  If you get someone inquiring about your home your first question should be, "do you have a pre-approval?"  and if they do not, you should refer them to the mortgage representative to obtain one.  This will save you from wasting countless hours on people who are not serious about buying.  

3.  BE AVAILABLE

Your life doesn't stop when you decide to sell your home.  You still have work, commute, practices, ballet lessons, etc.  A common myth is that real estate agents make a ton of money and don't have to work many hours to do so.  I'll be honest that's what I thought!  Much of a realtors day is spent handling inquiries, and coordinating showings.  Requests and inquiries don't just come 9-5 and potential buyers and buyers agent expect a quick response to calls and texts, otherwise, they will likely move onto the next potential property.  If you are anticipate having trouble being available try asking a friend or family member if they would be willing to help out.  Not having availability to show the home or answer inquiries is a huge reason that FSBO's fail.  

4.  ALLOW POTENTIAL BUYERS TO SEE YOUR HOME WITHOUT PRESSURE

If you have a potential buyer that has come to see your home, give them space.  It is important that the buyers feel comfortable talking about the home openly without fear of hurting your feelings.  Allowing the buyers to see your home without being sold on how great it is will go a long way.  

5.  EDUCATE YOURSELF ON A SALES CONTRACT

Without a reasonable understanding of a contract a FSBO may not fully know what they are agreeing to when presented with one.  Real estate contracts are full of clauses, timelines, and contingencies, such as a home inspections.  If the buyer is using a Realtor, the realtor is only looking out for the buyers interests and more than likely will look to exploit your lack of knowledge of a  residential purchase contract to work out in their buyers favor.  It is important to know that when you receive a contract there is more to it than just the price.  While the price of the home is likely whats most important, there are several other areas that can be negotiated, and contingencies that need to be met.  

6. EXPECT REPAIR REQUESTS, AND KNOW HOW TO HANDLE IT

Unless you are selling to an investor, a buyer will most likely have a home inspection done on your home.  One of the main reasons an FSBO will fail is because they fail to understand the inspection and repair process.  The likelihood that a home inspector will find "issues" is strong!  Even a nearly new home will have some things that need attention.  Try not to become to emotional when the buyer asks for repairs.  Within reason this is completely normal.  A Realtor has gone through this many times and through experience will have the knowledge of what requests are reasonable and which are too far reaching and should be negotiated upon.  Deals can easily fall apart during this process, so keep a level head and be open doing some repairs. 

7.  BE WILLING TO PAY A COMMISSION TO A BUYERS AGENT

Because all real estate commissions are paid by the seller it is in the buyers best interests to have a real estate agent represent them.  Without the potential to earn a commission an agent has no incentive to show your home to their prospective buyers, and will likely move on. Being unwilling to pay a commission at least to a buyers agent will greatly reduce the chance of selling your home to a qualified buyer. 

8.  MARKET YOUR HOME 

In order to have the best chance to sell your home you need to get it in front of the eyes of potential buyers.  A Realtor uses multiple resources to help get your home sold, a good agent will have a comprehensive marketing plan to get your home as much exposure as possible.  The biggest advantage that a Realtor has is the Multiple Listing Service (MLS), this is where every non FSBO home is listed and where most homes are sold from.  A sign in the yard and posting to your friends on social media will likely not be enough to reach your end buyer.  Not all Real Estate websites will allow you to post a FSBO but there are plenty that do.  It will take some time to list your home on each website individually, but getting it is important to get your home maximum exposure on the internet where 52% of homes were sold from in 2018.  

9.  PRICE IT RIGHT

Knowing how to price real estate correctly take lots of practice and experience.  One of the biggest mistakes a FSBO can make is to price their home too high, which can significantly hinder the chances of a sale.  While there are many different pricing tools available to the public, these tools do not take into account overall condition, and upgrades, which can drastically affect the price.  It is a great idea to order a home appraisal, an appraisal will help confirm that the price you are listing at is in line with what an appraiser thinks that your home is worth.  

10.  KNOW WHAT TO DO AFTER ACCEPTING AN OFFER

Once you have accepted an offer the deal is far from done.  There are many more steps in the process, specific timelines need to be followed as well as  specific tasks that need to be completed by both parties. Know when things need to be done and what tasks need to be completed prior to closing.  These include 

• Buyer obtaining a written mortgage commitment
• Inspections and repairs completed in allotted time
• Broker and or Attorney approves the contract 
• Appraisal is completed 
• Title work has been reviewed by title company

Are you a homeowner and are thinking of selling your home without a Realtor?  Have you attempted to sell your home by owner and failed?  If you were unsuccessful, I’d love the opportunity to talk with you about your real estate plans and objectives.  Contact me so we can decide whether there would be a mutual benefit of working together on the sale.  

Carson Dodds

Out West Real Estate

602-777-0942

carson@outwestre.com