Selling your Home:
For Sale By Owner Tips
Should you Sell your own Home?
When it comes to selling a home, many homeowners cringe to think that a realtor is going to receive a healthy commission when that same money could have gone into the homeowner's own bank account. But before you decide to sell your own home, here are some pro's and con's you may want to consider.
Pros of Selling Your Own Home
No commission fees. Obviously, this is the #1 reason that many homeowners choose to attempt selling a home without the services of a realtor.
You communicate directly with potential buyers.
Services now exist to help sellers with legal issues at a cost much less than the 4 – 6 % transaction fee of most realtors.
You determine showing times and open house events, if any.
If the current market for home sales is strong, you are more likely to find qualified, serious buyers.
Cons to Selling Your Own Home
Using the services of a realtor opens many marketing avenues to find qualified and serious buyers.
A realtor may be able to advise you on some easy, quick and inexpensive ways to increase the value of your home for greater profits.
Realtors may have a list of reputable service providers ie., electricians, painters, plumbers to call upon as needed.
A realtor will likely know how to avoid or handle legal issues and financing options.
Which way to Choose?
There's no "right or wrong" way to sell your home. There's just the way that is best for you. If you don't like dealing with the public or feel intimidated by paperwork and numbers, then clearly getting a realtor will let you sleep at night and help you to avoid unnecessary stress. If you are ready to tackle the job of pricing, marketing and showing your home to prospective buyers as well as some "Sunday shoppers" then the time and energy it takes to sell your own home may well be worth the profits.
You have joined the ranks of other owners who are also selling their homes without the help of a real estate agent. As a "for sale by owner" or FSBO, you've spiffed up your property for showings, set an asking price based on market research, and figured out a marketing strategy. Are you ready? Maybe. Before you put that For Sale on your lawn, consider the following important aspects:
Goals for the Sale
Do you have a handle on things like your desired timing for closing the sale and lowest acceptable price? Setting goals upfront in each of these areas can facilitate the sales process. How? You start off knowing whether you need to sell quickly or can handle a longer time on the market. And you also know if you can afford to accept a break-even price or need the highest possible price to finance your next move.
Most states in the United States require sellers to disclose material facts about property that they are selling. These facts include information that can impact a buyer's purchase decision and/or offer price. Examples of material facts include leaky roofs, flooding basements, structural flaws, defective major systems, possible environmental hazards, etc. You need to be familiar with the disclosure laws in the state where you are selling and comply with them.
Once all parties to the transaction sign a purchase offer, it becomes a legally binding sales contract. You must be sure that the document is written in accordance with the state's real estate laws, that all issues important to you are covered, and that your interests are protected. Think about who will provide the forms used. Will it be you or the buyer? Also consider how you will handle buyers who are working with a real estate agent. If you are not comfortable or savvy when it comes to offers and contracts, get advice from a real estate attorney on the best way to handle this.
Prior to showing your home to the first buyer, decide what personal property goes with you and what stays with the home. This will save you from unpleasant surprises and even heated disagreements later on. Many disputes have occurred over dining room chandeliers, window treatments, and refrigerators. If you make it clear from the very start what property conveys with the sale, you are better positioned for a smoother closing.
You may have only qualified buyers viewing your property and placing an offer. But how will you know if they are not? Real estate agents usually pre-qualify buyers before showing them properties. So there is a weeding out step, which does not always happen with for sale by owners. You can remedy that by asking prospective buyers if they have been pre-qualified or pre-approved by a lender for an amount that is greater than or equal to your asking price. Then if they submit an offer, ask for a written pre-approval letter with that offer.
Fair Housing Laws
Federal and state Fair Housing laws exist to ensure an even playing field for all homebuyers in a real estate transaction. As a solo seller, you are not precluded from complying with fair housing guidelines. Find out which laws apply to you as a FSBO and follow them so that you can avoid legal problems.
Information is for educational and informational purposes only and is not be interpreted as financial or legal advice. This does not represent a recommendation to buy, sell, or hold any security. Please consult your financial advisor.