How To Sell Your Home Without Using a Realtor

FSBO or For Sale by Owner

If your home has little or no equity in it or if it would be very easy to sell you may want to consider marketing your home as a FSBO. To understand the process of selling your home without using a professional realtor, look at what the professionals do and then copy them. Here is what a professional would do:

1. Look at the house with a new (and critical) eye.

Does it have "curb appeal"? Is the yard neat, free of trash, tools and toys? Plants, shrubs and flowers make the entry way more appealing but not if they dried up last summer and were never replaced. The front door should not have peeling paint or cracked and faded wood, which won’t be very inviting to Buyers or guests. Broken glass panes or damaged hardware should be fixed or replaced. A fresh coat of paint on that garage door or window trim is an inexpensive way to set your house off from others.

Ask a friend or relative to come over and walk through the house as if they were a potential Buyer. Take notes of what they claim to see, smell and feel about your home. These are all things a realtor would do when seeing your home for the first time. Perhaps there is a pet odor you have grown used to and don’t notice anymore. That drippy kitchen faucet is something you’ve learned to live with. You never see all those refrigerator magnets or piles of magazines and videotapes on the coffee table. The stained bathtub surface and peeling vinyl floor in the laundry room were always something you were going to take care of. Now is the time to do those minor repairs that will seem major to a homebuyer.

Realtors sometimes hire professional "stagers" to come in and ready a home for sale.

They will advise you to keep lawns and shrubs freshly trimmed, clean the pool and deck, sweep drive and walkways and put away tools and toys. Garages and storage sheds should be kept orderly. Inside, keep everything sparking clean and have fresh towels in the bathroom. Put clutter away and keep decorative objects to a minimum. Make the closets tidy – Buyers will open them to look inside. Add a few plants and let the sun shine in. These are all ways to "stage" your home to show it off at it’s best. Remember, you are competing with other homes – make yours look better than the competition. Your home should look "Open House" ready at all times.

2. Set a realistic and competitive price.

How much is your property worth? Only as much as a buyer is wiling to pay! Remember, value is in the eye of the beholder and a buyer is more likely to make a full price offer on a home that is priced right before making a low offer on a home that is priced too high.

A realtor would do a Comparative Market Analysis of all the homes in your neighborhood. By looking at those that are currently for sale, those that are pending sale and those that have closed in the last six months they are able to see which homes were correctly priced at market value. These are the homes that sold relatively quickly as opposed to those that were incorrectly priced, took longer to sell or expired because they were out of range.

You will want to do the same by comparing homes with similar features as yours, i.e., square footage, number of bedrooms and baths, amenities such as a new kitchen, tile floors, pool, walled yard, mountain and city views, garage size, landscaping, etc. Take the time to visit comparable properties to get a feel for market values. By evaluating all these criteria, you will be able to set an asking price that is realistic and will bring you offers from qualified buyers.

The main ingredients in the sale of a property are:

LOCATION – where is the property, are there any views, what zoning laws affect the neighborhood?

PRICE – pricing your home too high for the current market will result in lookers, not buyers.

TERMS – will you accept an owner carry back or FHA/VA sale or do you want cash only? Is the buyer prequalified with a mortgage lender?

EXPOSURE - marketing power is an all-important element if you want to reach the largest group of ready buyers.

If your home is overpriced it will take longer to sell, you will have fewer showings, offers will be lower and your property will help sell other properties. The most important time in selling your home is the first several weeks because it is new on the market and activity will be higher.

 Be sure to prequalify your buyers with their mortgage lender before your write a contract.

This will save you time and aggravation later and assure that your home is not kept off the market if the buyer is unable to obtain financing. Keep in mind that there are about sixty different financing methods for purchasing property.

3. Draw up an effective marketing plan.

That "For Sale" sign in the front yard isn’t the only way your advertising dollars should be spent. You will want to put some thought into the wording for your newspaper advertising. Running an ad every week is not inexpensive and you will want to highlight your home’s best features to entice the serious Buyers that are looking. Some important things to mention are price, location, size and how best to contact you. Realtors will be advertising listed properties in local "homes for sale" magazines and in the Multiple Listing Service, which has recently become available to the general public on the Internet. This is your competition.

For out of town Buyers you want to reach, the Internet is your best bet. Buyers who are planning to relocate will check the Internet as well as looking at print advertising. Listing the features of your home, and adding pictures to your website, guarantees international exposure.

Realtors prepare colored flyers with pictures of the home as well as using the Multiple Listing fact sheets. You can create these on your computer and hand them out to interested parties and Buyers who visit your home.

A "property profile book" is also a handy marketing tool to have ready for your Buyers. It should include colored pictures of the home and surroundings and pertinent information about the house. Buyers will want to know how much utilities run each month, possible assessments, school district statistics, zoning regulations, waste management services, sewer/septic information, fire protection, amount of property taxes, environmental notices or laws affecting the property (military airport proximity, endangered species disclosures and restrictions, Sellers Property Disclosure Statement or SPDS, lead based paint hazards, flood plain management, etc.). If you belong to a Homeowner’s Association you will want to include information about dues and amenities as well as a copy of the Codes, Covenants and Restrictions that may be in place. Financing information, showing the different mortgage payments at various interest rates and sale prices, is also helpful to buyers. By preparing a property profile book, you will be able to answer all the questions the Buyers may ask about your home and the neighborhood.

4. Use a checklist to keep track of time frames, contingency removals and details. (download checklist here.)

It is important to keep to a calendar for submittal of documents, inspection reports, contingency removals and other deadlines. These time restraints are itemized in the purchase contract and if not honored can result in an invalid contract. Both buyer and seller have obligations to perform in a timely manner to ensure closing of escrow.

5. Consider which Title Company you will use to handle the escrow.

The escrow process was developed to help facilitate the sale or purchase of your home. Escrow instructions are written documents, signed by both parties, which direct the escrow officer in the specific steps to be completed so the escrow can be closed. The title company accomplishes this by:

• Acting as the impartial holder or depository of documents and funds,
• Processing and coordinating the flow of documents and funds,
• Keeping all parties informed of progress of the escrow,
• Responding to the lender’s requirements,
• Securing a title insurance policy,
• Obtaining approvals of reports and documents from the parties as required,
• Prorating and adjusting insurance, taxes, rents, etc.,
• Drawing up all closing documents.
• Recording the deed and loan documents,
• Maintaining security and accountability of monies owed and owing.

Every escrow is unique and most are complex. If you have questions about the escrow process, contact an escrow officer or attorney to obtain detailed advice and further explanation.

4. Be prepared to work with buyers and possibly their realtors.

Courteous buyers will phone you for an appointment but it is not always at your convenience that they will expect to visit your property. While the most popular viewing times are Monday through Friday, between the hours of 9AM to 7PM, interested parties will call as they are driving by and expect to be welcomed inside. A few people will knock on your door, without calling ahead of time, and want to see the house. When they see your "For Sale" sign as they’re driving past, they expect an immediate viewing since they know you are eager to sell. You won’t always have time to tidy up but you also won’t want to turn a potential buyer away. Be prepared.

If a buyer is accompanied by their realtor, be ready to discuss compensation. Realtors are willing to show your property to buyers they are working with but they will want to be paid for their time and the advertising costs which they have incurred to obtain their client. You may consider this as a positive rather than a negative since the realtor would represent the buyer’s side, which includes drawing up the purchase contract for you, arranging inspections and selecting a Title company.

Realtors will also be phoning to ask if you will cooperate with them. This means they will bring their buyers to view your home if you agree to reimburse them if a purchase contract is negotiated and accepted. Although you are doing a FSBO to save some of the costs, you will want to keep cordial relations with realtors since you may decide to accept one of their buyers. Have an idea of how much you are willing to pay if they do write a contract for you. They will be happy to discuss terms with you before the buyer is present.

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Think back to when you bought this home. What did you do? You shopped the marketplace; you compared this home with others; you compared the price of this home with other home prices. Times change, people change, places change, however the home buying process remains remarkably the same. We at T-Rex Realty hope that the preceding information has helped educate you on the intricacies involved in selling your home.