5 Tips for a Successful FSBO
FSBO or For Sale by Owner is the process of selling property without representation by a real estate agent. Many property owners believe you need to contract the services of a real estate agent to sell their homes. While a real estate agent offers convenience, this comes with a price. Real estate agents will typically charge 2% to 3% of the final sales price as their commission.
By adopting the For Sale By Owner concept approach, you effectively save up 2% to 3% on commission sales. If your home is located at a high value, high demand area the estimated commissions will be on the lower end. Conversely, the commission rate will be higher in slow moving areas with lower demand.
The cost savings will give you more pricing flexibility during the negotiation process. Thus, it can help you move your house faster in the market.
More property owners are opting for FSBO because it offers additional benefits:
- Higher net return on the sale of the property
- Save up on out- of- pocket expenses
- Dedicated focus and attention on the sale of the property
And FSBO is easier than you think! By harnessing the power of the Internet and a bit of planning, the idea of selling your own home will become a reality.
1. Educate Yourself
A real estate transaction isn’t as simple as selling your property to a buyer. There is a clear cut process involved which involves contracts, payment of fees and taxes and other provisions as required by your city state. Hire the services of a lawyer to draw up the contracts and attachments.
You should also know how to price your property. It would be well worth your time to conduct research on the market value of similar homes in your area, the average selling price the last 6 months and trends and developments in real estate.
2. Get Your Home Ready
If you want to generate more interest for your home, you should get it ready for viewing. Here are some ideas for sprucing up your home:
- Contract the services of a general cleaning company. Buyer are extremely wary of dirty bathrooms, the kitchen and the living room. Have the tiles and kitchen fixtures cleaned thoroughly.
- If your home has carpets and drapes, contract the services of a carpet cleaner. The last you would want is for your buyers to start sneezing when they enter your home.
- Have an engineer inspect your home and conduct minor repairs.
- Do some painting touch ups.
- Remove all personal items from shelves in visible areas.
- Open up the main areas for easier viewing; move around furniture to de-clutter the spaces. Interested buyers want to see how they would renovate a potential new home.
- Trim the grass, thick shrubbery and fix up flower beds.
You also need marketing collaterals. You would want your home to look its very best in brochures, at the online sites and social media.
3. Go Online
There are For Sale By Owner websites where you can list your properties. You can avail of free services or pay a minimum fee to receive additional features. If you opt for the free service, you will be responsible for updating the images and content of your account.
You should also post your property in various social media sites. Check with your subdivision or city state if they have a community webpage or social media page and ask if you could join. You can post pictures of your home plus details on the property then link it to your FSBO account.
There are also real estate listing services you can use. It may cost you between $300 and $4,000 depending on the location of your property. But the scope and coverage of these networks are far and wide.
4. Advertise on Local or National Publications
Traditional marketing is still very effective in real estate. There are studies that show a combination of online marketing and traditional marketing can increase the probability of a sale by 15%. You can post an ad at a local publication for $35. A national publication may charge you upwards of $1,200.
5. Consider an Auction or an Open House
An auction is a popular way of getting a home sold. But there are fees and other expenses associated in setting up an auction particularly in marketing and promotion.
Make sure you set the ceiling price for the auction. If the ceiling price is not attained, you could use the highest bid as the basis for negotiating with interested buyers.
An Open House will also entail expenses not just in marketing but in making the event more enticing.
You have to create an environment that would influence selling behavior. These include:
- Baking and serving fresh bread with brewed coffee. These scents are associated with home more than anything else.
- Play classical music or nature sounds such as a babbling brook.
- Open up curtains and select lighting to brighten up the place and emphasize the key selling points of your home.
- Please keep pets off your property. Some interested buyers may not be fond of animals. It may also be perceived as a red flag because pets tend to litter inside the home.
Finally, make sure there are brochures readily available on a table near the front door.
All of these activities are exactly what a real estate agent would do for you. By going FSBO, you have more control over your expenses. Thus, there is absolutely no reason why you cannot sell your own home.
People believe the real estate agent’s greatest advantage is having a large list of contacts or potential buyers. But what good is the list for you if the real estate agent also uses it for his or her other clients?
Keep in mind that even with an exclusivity agreement, a real estate agent shall never be “exclusive” to you. He or she will always have other clients to attend do. Real estate is a business.
An agent will prioritize the account which is easier to sell. And if it’s not your account then time will place more pressure on you to have your house sold within 4 months. Generally, if a house stays on the market longer than 4 months its perceived market value drops.
By following these 5 actionable tips, you can probably sell your own home faster than a real estate agent and become more profitable as well.