If you want to get every possible dollar from the sale of your home this spring, it may be time to stick that for sale by owner sign out in the front yard.
It may be the difference between profit and loss.
People who can sell their homes the for sale by owner — or FSBO — way essentially could save 6 percent of the selling price, the money they would have paid real estate agents. Even more when you consider the true cost of the the homeowners equity, says Mike Greiner, Co-Owner of TexasFSBO.com.
But unless you’re living in a model home, there are some things you should do well before you think about planting that sign in the yard this spring.
Following these seven steps should increase your odds of for sale by owner success:
1. Design your selling strategy
Once you determine who your potential buyers are, you can craft a plan to market your home to them. Your approach may be to advertise on online or to put up fliers in local neighborhoods. You can also use online services to list your home on your local multiple listing service, known as a Flat Fee MLS, where buyers or their agents will see it. Determining your game plan now allows you to set up a realistic time line and allocate sufficient funds.
2. Know your home’s strengths and weaknesses
“Be proactive when it comes to your homes condition". Get a professional home inspection done early so you can identify problems that are almost certain to be discovered and have time to fix them. Even if you don’t fix them, you can incorporate the knowledge of any problems into your pricing.
3. Check the property’s record
This is the time to make sure there are no liens against your property. Go to the county courthouse and ask for help finding any claims that have been filed. You may want to hire a title insurance company to do a search or even a real estate attorney who can help you clear up any problems.
4. Get an objective price evaluation
Have an independent third party to a Comparative Market Analysis usually at no cost, or you can hire an appraiser for about $400. In the current market, there’s no room for wishful thinking about how much you can get for your home. Armed with a professional evaluation, you can price the home more accurately and show the appraisal to potential buyers as an official documentation of your home’s value.
5. Research your local market
There’s a wealth of information on the Internet about sale prices in your neighborhood to get you started, but you can learn a lot more by doing some literal legwork around your community. The earlier you start the process, the more time you have to see how your home measures up before you put it up for sale by owner. Then, you can either do some minor improvements or price accordingly.
6. Start home improvements
Once you’ve had an inspection done and visited similar houses for sale, you can start on home improvements that will increase your chances of selling at a higher price. “Buyers typically have little imagination and the first impression is a lasting impression,” says Greiner. “It can make a difference as to whether they actually want to see the inside or keep on going.” Do a thorough yard cleanup and prune and trim bushes and hedges. Other relatively inexpensive improvements include painting, decluttering, removing furniture and replacing soiled carpets.
7. Pull together your team
You may not have a real estate agent, but you’ll still need a supporting cast. The Title Company is perhaps most important, especially in the closing process. The Title Company is an independent third party which ensures the property is clear of any liens or Title defects. They also work closely with your buyers lender to prepare the closing documents and ultimately close the transaction.
Another professional to consider is a mortgage professional — not just for your use on subsequent purchases, but for any potential buyers who come without being financially prepared.
You should only show your home to Pre-Approved buyers. Prior to scheduling you should always ask "Are you pre-qualified?" and if not, you then can provide them with a Mortgage Professional,” Greiner says.