As a homeowner, you know the in's and out's of your house. And that may be one of the reasons that you are considering For Sale By Owner. A word of caution, however, that homes for sale by owner typically sell for less than with a realtor. Houses sold directly to a predetermined buyer, however, I do not consider FSBO. I buy houses from sellers who either contact me directly or whom I contact directly. Why not avoid all the hassle in the first place? Here's what you should know before listing your home FSBO?
What is FSBO?
FSBO is For Sale By Owner. This means that the owner is handling everything in the sale of the house. Every year, there are thousands of houses for sale by owner. Almost 50% of sellers who decide to list the house for sale by themselves do so because they don't want to pay the realtors' commissions of 6%. It's understandable to think that you know your house the best, can sell your house the best, and can represent yourself the best.
- Can you approach the sale from a buyer's perspective?
- Do you have a background in sales?
- Are you well-trained in the 10-page CAR RPA? (Hint: if you don't know what that stands for then you probably aren't ready to tackle it.)
- Have you studied the real estate market both in your neighborhood and in general?
Are you the best person to represent the sale of your house?
"Of course, I am, I know the house better than anyone!" But this could also mean that your emotional attachment to it could effect your ability to price the home properly. One of the major hang-ups that FSBO homeowners face is pricing the property too high and then it sits on the market for months.
Also, having professionals help you with staging your home and with quality photography is incredibly important to attract and retain buyers. Bad MLS photos will keep buyers from even considering your house. A poorly staged house will turn buyers away consistently.
Do you have a background in home sales?
Unless you are a realtor or used to be a realtor, I think that sales should very much be left to the professionals. There are thousands of books, seminars, trainings, and companies out there, all devoted to sales. So don't think you are doing yourself any favors by being your own salesperson, especially when it's such a high-priced item like your home for sale.
Are you familiar with the CAR RPA?
The California Association of Realtors use standard forms for the real estate transaction. The main form is the RPA (Residental Purchase Agreement) and it's 10 pages long. There are about 10 other forms that also are a part of the real estate transaction. There are training sessions for realtors to understand each of these forms. The CAR forms are also updated on a continual basis. Sound confusing? It is!
The legal liability that you must take for filling these forms out properly and accurately is huge. Again, think of the price of your home. And it's not only the liability that comes during the transaction, it's all the years after the sale of your home when you are still held responsible for what you stated on the CAR forms.
Have you studied the local real estate market?
You have to do your market research to understand pricing, potential price reductions, time on market, extentuating factors and the like. Here are 7 of the 20 or so things I consider before listing one of our houses for sale.
- You can't just use the recent sale of a home on your street as your research.
- What is the price per square foot of all the sold homes in a half mile radius from your house within the last 3 months?
- How fixed up were each of these homes compared to yours?
- How long did each home take to sell? Is the time going up or down?
- How long was escrow? Time going up or down?
- What was the original list price? And what was the final sales price?
- What was the average year over year gain or loss for your zipcode?
Why you can sell your home
You can absolutely sell your home yourself. Ultimately, research has shown that sellers get a lower price when they list their house themselves. However, if you want to sell your house and not pay the real estate commission, you can sell your house to a real estate investor.
I buy houses from sellers for many reasons, the 2 most common reasons are when the seller doesn't want to pay the realtor's commission or when the seller doesn't want the hassle of going through the entire real estate transaction. Those real estate transactions can be some of the most stressful times. Luckily, it doesn't have to be. We've continued to improve our sales process so that it's the most simple, fast, cash sale you've experienced.