Few things about selling your home are less attractive than paying a real estate sales commission. Coughing up a percentage of the sales price just isn’t that appealing. The prospect of selling your house yourself isn’t too appealing either though, so what do you do? Should you go the For-Sale-By-Owner (FSBO) route?
First and foremost, if you decide to go the FSBO route be prepared to separate yourself emotionally from the transaction. You must be able to put all the memories and emotional baggage that the house holds to the side. This is a business transaction for the buyer and/or his broker. Your emotional ties to the property may make it difficult to negotiate effectively. Make sure you can set your emotional attachment to the house aside before beginning the FSBO process.
The next step is probably the most difficult one, and the one most FSBOs get wrong—pricing your home. Be very careful when pricing your home. Take the time and do the research. How much are houses in your area selling for on a square foot basis? Find similar houses for sale near you and compare your price. Study your market—is inventory tight? How quickly are house selling? Is the market trending up or down? Get as much info as possible before pricing your home.
You will have to now create your marketing plan. I suggest doing a brochure, one page will do, with all the pertinent facts that you think a buyer will need. Run some ads in the local paper, put up a sign, host some open houses are all strategies that you should employ. Most important to marketing your property will be your online presence. At a minimum, place an ad on one or all of the bigger FSBO websites (owners.com, buyowner.com, forsalebyowner.com). You should also consider setting up your own web page on the property and doing a YouTube video.
You should create a pre-screening questionnaire to use on potential buyers. Make sure they are truly willing and capable buyers. Feel free to ask them to prequalify before showing your house. Now interview some real estate attorneys to handle the actual legal aspects of the transaction.
Be dedicated to the process and be prepared to show your home multiple times. Be sure to keep your home in show worthy shape at all times. As you can see by now FSBOs are not for everyone, but they can work if you follow the right steps and are dedicated to the process.
If you are still reading and you are still considering a FSBO, let me share a few facts with you. The Wall Street Journal reported that Colby Sambrotto, founder and CEO of forsalebyowner.com, listed his New York home on forsalebyowner.com for six months before turning to a realtor to sell the home. The realtor not only sold the home, he got more than Mr. Sambrotto had listed the home for on his own FSBO web site. You can’t make this stuff up.
According to NAR studies, 87 percent of FSBOs turn to a realtor after seven weeks. Realtors get an average of 16 percent more for homes than FSBOs do, only 9 out of 100 FSBOs successfully sell their house, and 40 percent of FSBOs that do sell, sell to a friend or family member. To bring this close to home, three of the most visible FSBOs in Windham (Pope Road, Windham Center Road and Moses Little Farm) all recently turned to a realtor.
A qualified realtor brings a few things to the table for those considering a FSBO. A realtor can market your home on the Multiple Listing Service, the surest way to market your home effectively. A realtor can reduce some of the risk involved with opening your house up to strangers. A realtor can bring knowledge and experience to the process. Most people will sell two houses in their life time, a realtor may do two transactions a day. A realtor understands what is necessary to legally protect a transaction. A realtor brings market knowledge to the pricing process.
I always recommend using a qualified realtor for your real estate transactions, but FSBOs can and do work under the right circumstances. I know people that can pull it off, but it is not for everyone. Before you become part of that 87 percent that wasted seven weeks on a FSBO, make sure you are up to the task. If I haven’t dissuaded you, do the work, dedicate to the process and market heavily. Good luck.
Rick is a realtor, real estate author, real estate app creator, and long- time Windham resident. You can reach Rick with any of your real estate questions at columnist@TheWindhamEagle.com.