Selling a house by owner: A step-by-step guide
At the time of closing on the sale of your house, it is only normal to desire to obtain the maximum return possible on the money you have invested. Some People are interested in selling a house for this reason, in addition to others.
According to Sissy Lappin, a real estate broker located in Houston who is also the author of "Simple And Sold," a guide for FSBO sellers, the process of selling a house without a Realtor is referred to as a "selling a house by owner" listing and involves time, ambition, and determination.
When you sell your home without using a real estate agent, you won't have to pay the standard 6 percent commission fee. This can result in significant cost savings. According to Lappin, this may result in savings of up to $18,000 on a property that costs $300,000.
Those who own a home and are interested in selling a house by owner, should be aware that doing so is an ongoing educational endeavour. Because, let's face it, selling a house isn't something most people do on a daily basis. If you are prepared for what is to come, you will be able to keep your stress level low and make the most money possible at the closing table.
This article will walk you through the process of selling a house by owner, step by step:
1. Consider the benefits and drawbacks
There are benefits and drawbacks to selling a house by owner. Before you get started, there are a few things you should keep in mind, which are as follows:
benefits of selling a house by owner
You'll be able to keep more of your profits after the sale of your property since you won't have to pay the commission fees that a Realtor would normally require, which may amount to an average of 6 percent of the home's selling price.
Keep your composure and control the situation: When working with purchasers and/or their agents, you do not have to deal with an intermediary, which might make things more complicated at times. You get to decide which offers to evaluate and how to go about selling your house.
Enjoy a speedier sale: The 2020 Profile of Home Buyers and Sellers published by the National Association of Realtors found that 77 percent of for-sale-by-owner (FSBO) homes sold in less than two weeks.
drawbacks of selling a house by owner
The process of selling a house by owner can be quite stressful and demanding of your time and patience. It indicates that you are responsible for everything, including preparing the item for sale, evaluating recent sales, marketing, answering the phone, setting up appointments, considering offers, and negotiating with a buyer.
Could result in a lower sales price for your home: According to research compiled by the NAR, selling a house by owner almost always results in a lower final sales price. In 2020, the median sales price of a property that was sold without the assistance of a real estate agent was $217,900. This was about $25,000 less than the median sales price of a home that was sold with the assistance of a real estate agent, which was $242,300.
entails overcoming challenges without the assistance of a professional: Dealing with work that was done without the proper permits, problems with the title, requests for repairs, and difficulties obtaining finance are all potential roadblocks. Going at it alone might be difficult; a real estate agent deals with issues like these on a regular basis.
2.Set a realistic price
According to Realiff's report, if you price your house too high, you run the risk of discouraging prospective buyers from ever taking a look at it. In selling a house by owner, setting the appropriate price for the home from the very beginning of the sales process is likely the single most critical step.
Consider using a qualified real estate appraiser so that you can obtain an idea of how much your house is worth. According to FixR.com, a company that provides listings for home repairs, the cost of hiring an appraiser will range somewhere between $375 and $450.
You should, in addition to getting an assessment, look at the comparable sales in the region. In practice, this entails looking for properties that are comparable to ones that have recently been sold in your region. Find out how much those properties sold for and think about what sets your home apart from the others.
You can also get information on recently sold properties by using websites that specialize in property searches. However, you should not put too much stock in the valuations that these websites provide for your property. There is a possibility that the valuations are not accurate and that they do not take into account recently sold properties in your region that are comparable to your listing in terms of age, condition, and size.
3.Get your house prepared for sale
In selling a house by owner, you will need to make sure that it is in immaculate condition for the listing images and the showings. The following is a list of suggestions for preparing your house for sale:
Tidy it up
Realiff believes that everyone has an emotional connection to their houses and the things that are kept in them. However, once you make the decision to sell your home, it is no longer considered a home. It's a product that's now for sale." You will be able to make the most money possible and sell your items for the highest price in the shortest amount of time if you first get rid of the mess and the rubbish.
Make it glitter
It's possible to bring in additional cash by selling a few bottles of Windex and Pledge here and there. Realiff recommends that you give some thought to hiring a cleaning crew in order to perform a thorough cleaning if you have the financial means to do so.
Add curb appeal
Since the outside of your home is the first thing people see, you want to make sure it looks perfect. Pull weeds, add new mulch, and put away any toys or bicycles that are in plain sight. Put some vibrant flowers in containers and place them on the front porch or foyer. As the last step, give the front door a new coat of paint and replace the welcome mat to complete the transformation.
Spend your money on a professional photographer
According to Realiff's research, displaying images taken by professionals online is an essential step in the process of attracting buyers. The cost of hiring a real estate photographer will vary based on your area and the size of your home, but you should budget at least a few hundred dollars for their services. When it comes to helping you sell your home online, some photographers may also offer a service of providing virtual tours of the property.
Make arrangements for an open house.
Organise a public open house for a Saturday or Sunday afternoon rather than setting up individual appointments with prospective customers. Realiff asserts that people prefer to be anonymous and pressure-free in their daily lives. An open house gives prospective purchasers the ideal opportunity to view your property without being pressured into making a purchase decision. To ensure that attendees have something to take with them and a way to get in touch with you to make an offer, you might want to consider printing out listing pages that highlight the most important aspects of your home.
4.Promote, promote, promote
When it comes to promoting your home, selling a house by owner might be a challenge.Realiff recommends posting your home on social media platforms such as Facebook, Instagram, and any other platforms once your photographs have been taken and your asking price has been determined. Requesting that individuals share the content is of utmost importance.
In addition to that, investigate the possibility of listing your property with the multiple listing service that serves your region (MLS). The price of using a flat-fee MLS listing service can vary, but it may be well worth it to increase the number of people who are aware of your home for sale.
5.Verify the buyer's financial standing
After receiving an offer, it is imperative that you ascertain whether or not the prospective purchaser is in a financial position to purchase a house. According to what Realiff advises, you should request a letter of preapproval from every buyer that submits an offer. She goes on to say that although sellers have the right to call the lender, real estate agents do not have this privilege.
Determine how much of a down payment the buyer is willing to make, the type of financing program they intend to use, and how much money they are eligible to borrow from a lender. If a buyer has been granted conditional approval for a loan, you should find out what kinds of restrictions they need to fulfill in order to receive final clearance.
6.Think about getting legal representation in selling a house by owner.
According to Realiff, if you are interested in selling a house by owner, it is definitely a sensible option to work with an attorney who is an expert in real estate law. "When issues begin to arise, a rookie vendor can quickly find themselves in a world of hurt,"
According to it, the cost of hiring a real estate attorney will likely be in the several thousand dollar ranges, but you will get a lot of the same advice that you would get from a reliable real estate broker. An attorney can, for instance, assist you in evaluating complicated offers, drafting closing documents, and ensuring that the legal aspects of the sale go down without a hitch.
Are you thinking about using FSBO? It is not too late to get in touch with a real estate agent
Many people who are selling a house by owner are surprised by how difficult and time-consuming it may be to do so without the assistance of a real estate professional. According to Adam Upchurch, owner and Realtor at Marvel Real Estate in Wilmington, North Carolina, some people simply do not have the time, patience, or organizational abilities necessary to sell their own house on their own. They are living their life. They have jobs and children, and they are unable to approve every appointment or grab the dogs to get them out of the house for a showing and they are limited in their availability.
Realiff suggests that in the event that you do want to work with a real estate agent, it is important to look for someone who not only has a significant amount of experience in the process of listing houses in your region, but also has solid referrals from previous customers. It is important to keep in mind that real estate commissions are subject to negotiation; nonetheless, it is common practice for a listing agent to divide the commission fee equally with a buyer's agent.