If you are looking to sell your home, the temptation to save money by avoiding a REALTOR® can be attractive. Real estate agents normally charge 5 or 6 percent for their services, that’s $18,000 if your house is selling for $300,000. But, is planting a “For Sale by Owner” sign in your front yard really going to save you thousands?
If you are considering selling for sale by owner, there are a few things you’ll need to think about if you hope to get the best sale price. Investing some money into the process and planning could pay off in the long run, seeing you coming out significantly ahead.
Here you’ll find some of the important stages to consider, so you don’t end up failing as a for sale by owner. It is very easy to do without a sound plan in place.
How much is your house worth? What are the market conditions in your area? These are questions you should know the answer to if you hope to set your sale price at the right mark. A real estate agent would have an understanding of the market and would analyze the best price you could expect to achieve.
You, however, can do the research yourself, checking local sales data, and looking for similar properties online. Or, you could always just ask a local real estate agent to give you an analysis for free, even though you have zero intention of using their marketing services.
Lots of real estate agents will perform this service in hopes of getting your business if you don’t succeed. Keep in mind that the price you ask for your property will largely determine your success. The price you set for your house will be eighty percent of the marketing. If you get it wrong, you’ll have wasted a lot of time.
If you want to avoid speaking to a real estate agent for some reason, hire a certified appraiser instead.
Listing Your House
When you have established the best price to market your home for, you need to list it. There are many options to choose from. There are free ads available on Craigslist, Facebook groups, and similar, or you could even set up your own website.
Spending some money on the listing is likely to produce better results, however. You can spend around $500 to have your home placed with a Multi Listing Service.
This MLS will increase the number of people that will see your listing, many of them real estate agents. This may, unfortunately, lead to finding a buyer through an agent and the need to pay their commission of a few percent.
There are companies out there that will list your home for minimal money. They don’t perform the same duties as a full-service real estate company would.
You would also be wise to offer a fee to the buyer’s agent when placing your home in the MLS. By doing so, you will only be paying half the commission or maybe a little bit less. By being open to paying a buyer’s agent, you will dramatically increase your odds of success. More than likely, you will also sell your home quicker and for more money as well.
Take a Professional Approach
When you take the photos for your listing, make sure to tidy up first. Real Estate agents refer to this as making your house show-ready. If you have kids, it will be harder, but worth the effort.
One of the best ways of getting your home decluttered, which is highly advisable, is to donate to charity. There are companies that will pick up your donations for free. What could be better? You will get your house looking its best and helping someone else out in the process.
Once you have minimalized the look and feel, ensure that rooms are well lit. Make sure to avoid showing anything which could put off potential buyers.
Hire a Professional Photographer
Consider hiring a professional photographer, they will also be able to take a more unbiased view of your home, which could be more appealing. The photography you provide online will be a critical aspect of getting your home sold. First impressions of your property matter. The photos you present will actually be your first showings!
There is nothing that will turn-off a buyer faster than unappealing photography. Lots of real estate agents get this wrong too. You can’t afford to!
When you are describing the house, it is better to avoid mentioning anything negative for as long as possible. You want prospective purchasers to fall in love with the house, and then let them learn about any downsides. This may seem underhanded, but it is what a salesperson would do to sell your house. Emphasizing the negative is never smart in home sales.
Be Flexible With Showings
One of the significant advantages of using a real estate agent to sell your home is the ease in which they can be there for showings. If you have a busy schedule, it will be difficult to accommodate buyers. You need to, though! A missed showing is a missed opportunity for a sale. You have to be as flexible as you possibly can, or you will fail.
Make sure you diligently follow up on any inquiries from interested people. You don’t want to do all the work to get someone interested only to lose the chance of a sale through not getting back to them quickly.
Getting By The Inspection
One of the most significant hurdles in any home sale whether you are selling by owner or not, is the home inspection. More sales fall through at the home inspection than at any other time in the transaction. Given the high failure rate, you will want to make sure you take care of any blatant imperfections with your property.
Why go through all the effort of trying to sell for sale by owner if it inevitably leads to falling apart? Take a look at your home through the eyes of a buyer both inside and out. Are there things you can fix for small dollars? If so, make sure you do them!
Hire an Attorney
A real estate attorney will be able to make sure the paperwork does not overly favor a buyer. They will ensure there are no unreasonable contingencies as part of the contract. Trying to do this by yourself could end in a headache and significant problems down the line. It could cost anywhere from $400 to $1000 to have an attorney review a purchase and sale agreement, but it will be worth it to make sure the documentation is acceptable.
Hiring an attorney will be essential if you want to ensure there is no language in the agreement that could come back to bite you.
Hiring an Agent After All
Trying the “for sale by owner” approach to selling your home isn’t for everyone. It will require time, energy, and some planning. And at the end of the day, you may find it more difficult to sell your property. It could also result in a lower price for your home as well.
There seems to be some evidence to suggest that avoiding the REALTOR’S® commission could result in a lower average sale price. This has been shown in data collected by the National Association of Realtors.
There is the possibility of hiring a cheaper real estate agent bit doing so is usually a mistake. Like many other businesses, you get what you pay for. There are now some companies which offer a full service but charge less than 2 percent. If you go down this route, you will still be required to pay the buyer’s agent their 2 or 3 percent as well, so not quite as good as it may first appear.
Other than pricing a home correctly, there is nothing more important than hiring the right real estate agent. It is vital to take the time to conduct a thorough interview of at least a couple of agents. many advise interviewing at least three. I agree with them! You may also want to consider using a REALTOR® vs. just a real estate agent. Yes, there is a difference! REALTOR’S® must follow the code of ethics. If you have ever had any kind of trust issues with an agent, this is certainly the route you will want to take.
Final Thoughts on Selling a Home By Owner
Going it alone and taking charge of selling your home can result in great financial benefits on occasion. Don’t be fooled, however, in believing this is a normal occurrence. More often than not, you will be better off getting a real estate agent involved if you want top dollar for your home. Have you ever heard of any of your friends selling their home by owner and having a bidding war? Probably not.
When selling a home by owner, you can almost always kiss the chance goodbye that multiple parties will be fighting over your home. When selling without a real estate agent, you need to make sure you put the work in, spend money where you should, and plan for success.