When you sell a house, typically as much as 6% of the listing price of the house is paid to real estate agents – buyer and seller – out of the seller’s profits. Not thrilled about this idea? You’re not alone. Many people decide to try selling on their own (For Sale By Owner) instead of hiring a selling agent. This can be a practical choice, especially if you have the time, skills, and resources to invest in the quality and profitability of your home sale.
The question is how to take on this large-scale project of home selling without the traditional real estate team. A recent study by the NAR reports that 70% of For Sale by Owners (FSBO) sellers eventually list with an agent or cancel their sale. By understanding what causes FSBO sellers to drop out of the race, you can prepare yourself for success.
The 5 Hardest Tasks when Selling On Your Own
1. Preparing the Home for Sale
2. Getting the Price Right
3. Understanding and Completing the Paperwork
4. Finding Enough Time
5. Marketing and Drawing Potential Buyers
When you sell on your own, you take on the responsibility for every step of the home selling process. This is much more time-consuming than most homeowners realize before they get started. There are also a few essential steps that only an experienced real estate professional can complete quickly, like transferring the title.
During the For Sale by Owner process, you will quickly discover what you are good at, what you have time for, and the importance of a service network. Therefore, the best way to succeed at an FSBO home sale is to know the challenges ahead and prepare for them.
1) Preparing the Home for Sale
One of the most time-consuming stages in selling a home is just preparing it for sale. There is a long checklist to take care of ranging from home repairs to painting and staging to attract new buyers. Most of this must be done before you take your first photo or make the online listing. You will need to be prepared for the investment involved in market-ready home repairs, pre-sale renovations, and the staging process.
Repairs and Appliance Maintenance
All property flaws or damage should be repaired to ensure the home is high-quality and safe to use for new buyers. Take care of any annual to five-year maintenance tasks like flushing the water heater, cleaning the AC coils, and having the roof inspected for seasonal damage. if there is any structural damage, take steps to have it repaired.
When deciding whether to enact renovations and repairs, consider three things: the state of the home, the state of the market, and the required investment of time and money for each upgrade.
When the home is in top condition, start cleaning. Every surface should be wiped and every drawer should be emptied. The best time to do this is when the house is empty of furniture and every corner can be easily reached. Use special cleaners, rent a steam cleaner, and/or hire a “move out” cleaning service.
Repainting and Refinishing
The next step is to renew every surface. You can make the house feel “like new” with a fresh layer of paint and finish throughout the house. Choose a neutral yet compelling set of colors for your walls, cabinets, and other painted surfaces. Clean and wax wood or even re-stain for a fresh, unscratched look.
Staging and Photographing
Once the house is repaired and repainted, you will need to stage it for sale. Staging is optional but great professional photography is a must. Beautiful photos and 360 virtual tours define online competition in the housing market.
If you choose to stage, the level of staging should be determined by the market, your budget, and your timeline. Staging shows off the architecture of a house, the functionality of its space, and the potential joy that a future family might experience. The most elaborate staging involves decorative demo rooms in each area of the house to help inspire buyers to see their future lives in the home.
2) Getting the Price Right
- Current vs Potential Market Value
- Competitive Neighborhood Pricing
- Assayed Value
- Negotiation Factors
- Choosing the Right Listing Price
The right price to list a house is a delicate process. It’s not impossible to do on your own, but many FSBO homeowners are not sure how to calculate the right asking price or how to start negotiations. This is because there are a number of larger-scale real estate factors at play that are difficult to see clearly as a beginner in the industry.
The current most popular ways FSBOs get their home valuation are:
- Appraisals (40%)
- Comparisons (38%)
- Profit seller needed (18%)
- Online home valuation (17%)
Which neighborhoods are up or down in popularity, which features are currently hot in the trends, and which locations are generating the most appeal all play a part. So does your last market sale, the current market value, the assayed value, and the comparative costs of other homes in your neighborhood.
You also need to consider negotiation factors like a cracked basement or a luxury driveway. Should you price up or price down due to the unique features of the home? It’s often best to get some perspective on home pricing.
3) Completing the Paperwork
If there’s one thing a real estate agent should always do for a client – even FSBO clients – it’s the paperwork. Real estate paperwork is multi-layered and complex. You’ll need a title check to make sure the property is free and clear, and a title transfer when the sale contract is complete. You will likely need the brief services of a lawyer to draft and finalize the selling contract and may even need to check your zones and community rules before completing the sale of a home.
Renovations will require permits and new plans will need filing with the city. It’s this sequence of paperwork that often – quite understandably – trips up anyone new to buying or selling houses. Paperwork is also a vital part of the negotiation, which means without understanding, you could overspend or leave money on the table.
In fact, paperwork is the single most important challenge for FSBO sellers. This is where you see the most risk. If even the smallest details go wrong, you could be held liable. If you don’t understand how to complete the paperwork, a sale can be dragged out and you might even lose a buyer.
4) Finding Enough Time
- Repairs and Staging
- Build a Listing
- Real Estate Marketing
- Hosting Tours and Open Houses
- Verifying Offers
- Paperwork and Financial
The single biggest challenge for FSBO home sellers, however, is finding the time. Often, people seek FSBO to save money on the home selling process, but the amount of money you save might be poorly balanced by the time it takes to complete the tasks.
You likely have a job to work, a family to spend time with, and a personal life to manage. Fitting a home sale between your normal everyday tasks can be surprisingly taxing.. You may find yourself spending every spare hour and weekend trying to complete home improvements, schedule listings, or juggle buyer tours and bids.
Many people choose to sell a house with a team simply to split up the work required to get the house successfully listed, marketed, and finalized with a new buyer.
5) Marketing to Attract Buyers
- Design marketing assets
- Write a compelling and accurate home description
- Detail every feature of the home
- Buy or network online advertising
Marketing may also not be your forte and attracting buyers is not as easy as it sounds. A lot goes into real estate buyer attraction when selling a house. You need to build a competitive online listing, create a 360 virtual tour, and promote the home sale to increase awareness. Marketing takes expertise, and not everyone is a natural talent at the kind of writing, web design, and photography necessary to create a strong home sale marketing campaign.
Even very DIY homeowners may find that preparing the home is simple but marketing is a bridge too far to sell the house solo.
Everhome Realty: Flat-Fee Real Estate Services
If you are currently tackling an FSBO home sale, we’re here to help. Check out our home selling resources for the tips and ideas you need to make your sale a success. And if you decide you want the benefits of a real estate agent’s expertise and service network, we offer a flat fee instead of a percentage so you know you’re getting a good value for the real estate services we provide.
Selling a house by yourself is an impressive undertaking. Let us become part of your network alongside the electricians and plumbers who make your home ready to smoothly transition to the next buyer.