Do You Know How to FSBO?
Some homeowners choose to try to sell their homes For Sale by Owner (FSBO, pronounced “Fizz-Bo”) before enlisting the assistance of a real estate agent. Although fewer than 25% of FSBOs properties sell, if you’re not in a hurry to move on to your next place, you can try your hand at marketing your property on your own.
How to FSBO
- Get Organized
- Do Your Research
- Get Your Home Ready
- Know Your Legal Responsibilities
- Enlist the Services of Professionals You Trust
- Practice Makes Perfect
The Big To Do List for a FSBO
- Buy signs for in front of your property, and on a corner, if your home is in a cul-de-sac (or cove, in Texas). Get permission from your HOA or the home owner on the corner for directional signs that aren’t on your property. Pick up a few signs for Open Houses, too.
- Find boxes to move all of your extra clutter out of your home and garage and into a storage unit. Your home should be as free of unnecessary stuff as possible, including family photographs and other personalized memorabilia such as trophies and framed certificates. Even though people should be looking at your house, they’ll get distracted by your stuff.
- Get copies of the forms for a purchase contract, as well as the forms required for property condition disclosure required by your state.
- Research the homes that have recently sold in your area that are similar to yours, so that you can price your home right. FSBOs usually aren’t in a hurry to sell, so you can do this research in the months leading up to when you want to put your home on the market by visiting Open Houses and browsing websites that list homes for sale in your area. If you want your house to sell, you need to price it right. The longer it sits on the market, the more people are going to start wondering what is wrong with it, even if it is fabulous.
- Hire an appraiser to measure your home and provide you with a clear diagram for the dimensions and layout of your home. You want to avoid the liability of representing your home as being a size that is different than it actually is. Providing inaccurate square footage can expose you to the potential for legal problems later on if the new owner realizes the home is smaller than you said that it was. Square footage information from the tax records and even the builder of your home are frequently wrong.
- Put together a list of real estate websites, and the accounts necessary to market your property on-line. Most buyers start their home search on-line so you don’t want to miss these opportunities.
- Obtain a pre-listing appraisal, so that you have a professional opinion of the market value of your home. You can provide this to buyers, either up front, or who offer less than your asking price. This frequently happen with a FSBO because buyers that aren’t represented by a real estate agent know that you aren’t paying a commission. Many buyers expect you to discount your property to reflect the commission rate that is typical in your local market. If your buyers are represented by a Buyers Agent, an appraisal can further strengthen your negotiating position. Be prepared to pay a commission to an agent that brings a buyer to your home. If you are unwilling or unable to pay the buyers’ agent, make sure disclose this up front to avoid misunderstandings.
- Hire a professional cleaning company. Schedule a reputable cleaning company to spring clean your home, even if it’s fall. Your home should absolutely sparkle, and every trace of dirt, pets, carpet stains and cobwebs should be gone.
- Take fantastic photos of your clean and organized home. Make sure to use a high-resolution digital camera so you’ll have good photos for your marketing materials. Adjust the lighting and accessories in each space as you’re taking the photos to make sure you show your home in the best possible light.
- Pay a good lawyer to explain the contract process to you, to make sure you understand the laws and requirements for selling your home. Your lawyer should also review any contracts before you sign and explain the implications of what you’re agreeing to.
- Hire a good professional printer to design and print your marketing materials, to avoid that homemade look. (Good for cookies, not good for marketing!)
- Jot down the names and contact numbers for a reputable real estate agent in your area. If your buyers need to sell their current home in order to buy yours (and most do), make sure you don’t get tied up in a contract waiting for them to sell it on their own. Introduce them to an agent you are comfortable with so they can get their home sold as quickly as possible and with enough cash in their pocket to buy yours!
- Hone your phone skills so you can separate the Lookers from the Buyers. Most folks touring homes are just Lookers – people that aren’t ready, or able to purchase your home. Practice asking questions that will help you determine which is which before you open your home up to someone that isn’t serious about buying it.
- Practice asking Callers about their financing pre-approval. Serious buyers should be pre-approved so you know they are able to purchase your home and so you don’t get tied up in a contract with someone who can’t obtain financing. Be wary of offering seller financing to someone that can’t qualify for traditional financing. If you’re uncertain about this, enlist the help of a professional you can trust, such as an attorney that can explain the risks of seller financing to you and who can draw up the paperwork you will need to protect you from the default of your buyers if they can’t or won’t make their monthly payments.