Do I want to sell my home as a For Sale by Owner?
You’ve probably asked yourself this question when considering the cost savings of selling your home yourself. A For Sale By Owner (FSBO) can be a fantastic experience if you’re well-prepared and willing to learn the ropes as you go.
While it may seem challenging, roughly 7 to 8% of home sales are FSBO each year, and many home sellers repeat FSBOs. So, if you think you're interested, here’s what you need to know to sell your home by owner.
Selling Your Home as a FSBO: A Business State of Mind
It's common for homeowners to be emotionally attached to their houses because so many important life events take place there. But it's to your advantage to split the emotion from the business portion of your FSBO.
If you treat the sale like a business transaction and keep emotions to a minimum, you’ll be less frustrated as you prepare the property and work with home buyers. Do your best to separate from personal attachments, like the perfect shade of baby pink in the nursery, and focus on presenting your property in the best possible light.
Plan Your Budget
One of the first steps of a successful business is creating a viable budget. You probably chose a FSBO partly for the cost savings, which can be significant if you don’t use a real estate agent for your home sale. But this isn’t to say the transaction is without costs. You’ll pay several real estate professionals and home services to help you get to closing day, so prepare your budget accordingly.
Include the numbers needed to spruce up your property. Whether you want to sell it “as is” or in “move-in-ready” condition, you’ll pay for updates, upgrades, and repairs. Research professional services in your area to help you plan the budget.
Here’s a list of some of the fees you might pay before listing a FSBO.
- Painter, landscaper, contractor
- Marketing and advertising online and in print
- Professional cleaners
- Storage containers or units
- Legal fees-real estate lawyer, notary
- Broker fees
- Taxes
- Appraisal
- Other closing costs
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Photo by Ron Lach from Pexels via Canva.com
Collect Important Property Documents
Spend time gathering the property’s essential documents, such as assessments, surveys, inspection reports, and utility bills. These documents will help you determine the asking price and prepare you for savvy real estate agents and home buyers who may ask for more information. Your buyers will also appreciate a collection of home manuals for appliances and heating and cooling systems for a seamless move-in process.
Determine the Asking Price
Give yourself plenty of time to research real estate in your area; it's a challenging task, especially for first-time FSBO sellers. Comparable listings are some of your best resources for setting your asking price, but you’ll also need to take into account the location, the house’s condition, and upgrades.
Consider the local Basic Allowance for Housing (BAH) when targeting the military home buyer community. If the buyer perceives a price that is too far beyond their monthly BAH, you may shrink a reliable buyer pool.
Essential Updates for Your FSBO
If you’re planning a FSBO, chances are you’re not afraid of DIY work, which is great because you’ll need some sweat equity to get your house ready for buyers to fall in love. First, inventory and prioritize the tasks requiring the most attention or time. Prioritize safety when starting repairs, like a broken banister or front door lock. Then, decide which chores you have the time to take on and delegate others to a professional who can do them efficiently.
You’ll also have to account for which updates yield the best return in your neighborhood. The project could be large, like a new roof, or small, like adding neutral paint in the living areas. Consider replacing dated hardware and fixtures and updating appliances and flooring.
Spruce Up the Exterior Curb Appeal
Curb appeal is crucial to your sale, even in the winter. Remove junk and debris from all spaces and meticulously trim the yard. Some homes will require touch-up exterior paint and pressure washing. Don’t forget the porch. Update the mailbox and house numbers, sweep the floor, and add seasonal furniture and plants.
Your front door speaks volumes, so give it the attention it deserves. You might need a whole system upgrade with in-demand innovative features, or a simple paint color change could do the trick.
Decluttering and Staging Your Home
Simplify and Declutter Before a FSBO
Think of your home sale as preparing for a cross-country move. Go through your belongings ruthlessly and discard or donate anything unnecessary. Remove items you don't use daily, even if they are neatly stored.
You might need to rent a storage unit to create a spacious, buyer-friendly environment. After the purge process, hire a crew for a professional deep clean. You'll be amazed at the amount of grime you’ve missed.
Home Staging Decisions
Home staging is an option to consider, especially if the market is challenging or the house is empty. A staged home usually sells for more in a shorter timeline. A professional stager can help in various ways, so choose an option that works best for you.
- Book a consultation and execute the ideas on your own.
- Pay for a partial stage in high-traffic areas.
- Purchase a complete staging furniture rental plan with installation and tear down.
- Hire a home stager specializing in adding furniture and decor virtually to your home’s photographs.
Marketing Your FSBO
Advertise Your Home
Your online advertising is paramount. It's a given that home buyers will spend time scouring your ad if it has professional photography or exceptional DIY photos.
Your home description also needs to be top-notch. Include all the pertinent details, like bedrooms and bathrooms, along with finer details of the home, like distance to the closest base, the school it’s zoned for, and any in-demand hotspots like a neighborhood restaurant or coffee hangout.
Learn how to write an incredible home description that sells.
Plan an Open House
Now that your home is perfectly cleaned, staged, and photographed, it's time to give people what they want: an open house. Promote your open house on social media and through yard signage. Schedule it for a weekend for optimal foot traffic.
Create a welcoming atmosphere by being friendly but unobtrusive. Remember to make plans for your kids and pets and remove all evidence of pets. Ensure the home is well lit, with fresh flowers and perhaps some easy snacks. Provide an information sheet with key details such as address, price, and square footage.
Comparing Offers and Closing
Hopefully, the offers will flow quickly after all of your preparation. Review the offers carefully and compare them based on price, contingencies, and closing dates. You can also request a pre-approval letter to ensure the buyer is financially qualified. You’ll also need a real estate attorney and closing agent to review offers and navigate the closing process.
Steps to closing day:
- The home enters escrow, initiating the closing process.
- The buyer arranges an appraisal and home inspection.
- Address any issues raised by the inspection report.
- Pack your belongings and hire movers.
- Conduct a final inspection before closing.
- Complete the transaction and transfer ownership.
As you can see, a FSBO requires dedication and careful planning, but selling your home as a FSBO can be rewarding financially and personally. Following these steps and maintaining a professional attitude can increase your chances of a successful sale.
