This article is for you if you have made the decision to sell your home by yourself. According to the National Association of Realtors, if you’ve made that decision you are among less than ten percent of the population in the United States who have. Of that number, 59% either already knew the buyer (friend, family member, neighbor, or relative), or were contacted directly by the buyer to purchase the home. So, the number of homeowners who decide to go it alone is relatively small. But if you do decide to sell your home as a For Sale By Owner, below are some tips to help you through the process. Please keep in mind that we are Realtors and not attorneys. None of this should be construed as legal advice.
1) Get your support team together:
You will need to assemble an attorney, a lender, a title insurance company/escrow company, an appraisal company, and a home inspection company. You will want to get to know them, and let them know that you will be sending business to them. It will amaze you how helpful they will become when they know that.
* We recommend that you hire an attorney to draft the purchase contract and review all documents. Drafting your own purchase contract could be a nightmare for you later. Abraham Lincoln was right when he famously said, “He who represents himself has a fool for a client.”
* It will be important to have a lender ready because you will want to make sure each and every potential buyer is pre-qualified. This is critical because you won’t want to waste your time negotiating with an un-qualified buyer. If the buyer is paying cash, you will want to make sure that you obtain documentation from them showing that they have the funds to complete the sale.
* The title insurance company is an important component because they will be the one that performs a title search insuring you against the possibility of overlooking a lien or claim. They will also act as a neutral third party who will act as an intermediary between you and the buyer, collect and remit funds, provide title insurance, prepare final statements, record the deed, and much more.
* Since you will not have the advice of a real estate agent, you may want to consider hiring an appraiser to appraise your property so that you know at what price to market the home. This is one of the main reasons why people who sell their home without the help of a real estate agent sell their home for less than what it could have sold for if they had hired a professional. Homeowners usually do not know what their home is worth and tend to under-price the home. And without an appraisal, the buyer will most likely try to get you to lower the price because they will think you do not know the true value of your home.
* It’s a great idea to hire a home inspection company to inspect your home before putting it on the market. Then, once you have the inspection results we recommend that you take care of as much as you can (if not everything) on the list. That way you (and the buyer) will not be hit with any surprises that could end up killing the deal later…And in some cases, the buyer may be willing to accept your home inspection report.
2) Prepare Your House for the Market:
This is probably one of the things that sellers overlook the most often. As a Realtor, we have shown homes where there are weeds in the yard, paint that needs to be touched up, clothes lying around, dishes in the sink, dirty windows, cluttered closets, and debris on the property. It has been said that you never get a second chance to make a first impression. This has never been more true than when you are trying to sell your home. You may even want to hire a professional home stager to help guide you as to what you need to do to get the home ready. They can range in price from $100 to $300 for a one to two hour consultation, but they’re worth it.
3) Hire a Professional Photographer:
We have seen some of the most horrible photos taken of homes. If you are selling your home as a For Sale By Owner you are probably going to market the property online. If you aren’t planning on doing that, you will be missing a large part of the market. According to the National Association of Realtors, 92% of buyers used the internet in their home search process. That is significant, and having photos that are professional will go a long way toward finding a buyer for the home.
4) Market Your Home:
There a number of websites where you can advertise your property, such as, forsalebyowner.com or craigslist.com. You will also need to purchase a For Sale sign and you can find one of those at your local hardware store. You will need to put your phone number on the sign and place it in your yard. If you plan to hold an open house you will also need to purchase 5-10 open house signs. Make sure you create a professional flyer with all of the details of your home. We recommend that you leave the price off the flyer so that the buyer will have to call you to find out the price. This will give you an opportunity to explain why the buyer should come to visit your home. There are plenty of flyer preparation programs you can purchase online or at your local office supply store. And speaking of office supply stores, you can also have one of them create the flyer for you. The more professional the flyer, the better. You will need to purchase a flyer holder to place in the home and also one to put near or on the sign. You can find these at an office supply store, too. Phone or email everyone you know and let them know you are selling your home. They may not want to purchase your home but they may know someone who is looking for one. While you’re at it, place your flyer on the bulletin board in your office, the library, grocery store, and gym. And of course, you can also advertise your home for sale in the newspaper. Do keep in mind that of all of these suggestions, the most important one is how much exposure your property will get online. That is where most buyers start their home search.
5) Show Your Property:
One of the many advantages of hiring a real estate professional to help you with the sale of your home is that they will be the one showing your home to prospective buyers, not you. It is a little known fact that selling real estate can be a very dangerous business. Keep in mind that you will be letting complete strangers into your home. You will need to keep your safety in mind each and every time your show your property to a prospect. You may want to consider having someone with you when the home is shown for safety sake. Then there will be the neighbors and just plain ‘ol lookie loos wasting your time. That is just a reality of selling your home. Most of the buyers who call you will want to see the home during the day, so it’s a good idea to let your manager know that you may need to leave the office from time-to-time to show your home. When possible, try to arrange to show the home before you head in to work, or at the end of the day when you get home. Make sure you are available to answer any calls you get. If you’ve done your marketing right your phone will ring a lot. Many of those callers will just be curious about the price, and many of those will be your neighbors.
6) Sign the Contract:
Once you sign the contract you will send it to the title company along with the earnest deposit that you agreed on with the buyer. The title company will open escrow, the buyer will complete the home inspection, and the appraiser will complete the appraisal. Along the way you will need to negotiate the repairs that you agree to make. If the appraisal comes in low you will have to negotiate that with the buyer, as well. Don’t forget that you will also need to make disclosures to the buyer regarding any defects in the home. When working with a real estate agent the agent will provide you with a Residential Seller’s Property Disclosure Statement that addresses all of the disclosures the seller is required to make.
7) Close Escrow:
Once you have made it through all of the steps above you will be ready to close escrow. Before you do that the buyer will probably want to revisit the property to make sure it is in substantially the same condition as on the date of contract acceptance, and to make sure that any repairs that were agreed to were made. Remember to notify all of your service providers to turn off service, notify the post office of your change of address, and leave all keys, remotes, and codes to your home’s systems for the new buyer. It’s a great idea to also leave a note for the new owner of where the mailbox is and the box number, and when trash and recycle should be placed on the curb.
If it sounds like a lot, it is. That’s why 90% of people who sell their home choose to do so with the help of a professional. But we get it. We own a home too, and want to maximize the amount of money we put back in our pocket after we sell our home. But consider this. Most home owners who sell their home with a real estate agent sell their home for more than people who sell For Sale By Owner. A real estate agent can help you negotiate the price, terms, repairs, and the best close of escrow date which can all save you money. Most real estate transactions are in excess of $100,000. If you had a $100,000 tax problem would you handle it yourself, or would you hire a tax accountant? If you had $100,000 legal problem would you handle it yourself, or would you hire an attorney? And most people who try to sell their home For Sale By Owner eventually list it with a real estate agent. And by then, the home is “stale” on the market. If you still decide to sell your home by yourself we wish you luck. You’re going to need it. But, if you would like the assistance of a professional, experienced agent, we hope you will reach out to us. We would love to help you. We have over 22 years of experience helping home sellers and buyers. And if you want to see what other satisfied clients of ours have said about their experience with us, check out our reviews on Yelp! Happy selling.