The 7 Steps to Successfully Selling by Owner

Selling your home by owner is not impossible…or even difficult…if you understand the process and what you need to do to be successful.

It’s not for everyone.  In fact, fewer than 10% of all homes sold in the U.S. are sold without an agent.

Why?

Because most sellers find that when they stick their FSBO sign in the yard, most of the phone calls come from agents hoping to convince you that they’re the solution to your home selling needs. And after a week or a month, most sellers give up and give in. They sign a long-term listing agreement with an agent and agree to pay a big commission.

What I find most interesting is that most sellers who try to sell by owner aren’t really against paying a commission; they’re simply trying to maximize the real dollars they’ll get at the closing table.  And the typical commission is a tough number to justify for a lot of folks.

A good agent will sell a home for more than you could on your own…Because they sell homes for a living, they’re connected to the marketplace, they’re experienced negotiators and problem solvers, and they deal with buyers all the time.

My experience tells me that most who try to sell by owner fail for just one simple reason:  They don’t prepare themselves for a successful sale.

By following these seven steps, you’ll increase your chances of selling on your own and saving yourself literally thousands of dollars in the process.

  1. Do your homework

Before you do anything, familiarize yourself with the way real estate transactions work. There are a lot of players and moving parts aside from the buyer and seller.

You’ve already been through a transaction at least once, so go through the paperwork from when you purchased the house and learn the language.

You’ll likely come in contact with real estate agents, mortgage loan officers, title agents, appraisers, municipal inspectors and a host of other folks with a role in your transaction. Be sure you understand how they work together.

  1. Get it ready

When selling your home, the most important thing is preparing it for the market. You’ll need to really get critical here, and it may benefit you to have someone you trust to be honest share their thoughts.

Categorize issues into 3 lists: cosmetic, functional and the things you can’t do anything about. Fix the things in the first two categories, and adjust the price to compensate for issues in the third.

Make sure it is spotless. Paint scuffed or brightly colored walls in neutral colors. Replace worn carpet and refinish hardwood floors. Thin out closets. Wash windows. Repair screens. Remove heavy drapes and any furniture that detracts from the size of your rooms. Make sure every lightbulb works. Pack up all the family photos and religious décor. Clean up the landscaping and trim overgrown trees and shrubs. Perhaps even invest in meeting with a home stager to help you put your home in the best possible light.

Consider the mechanicals of your home; the functional pieces like appliances, furnaces, the roof, the plumbing. Leaky faucets and old appliances turn off buyers. And if anything is near the end of its useful life it should be replaced.

Lastly, consider the things you cannot change, like adjacent power lines, main roads, poorly maintained streets or neighboring houses. These issues are real in the mind of the buyer, and can only be addressed with pricing that tips the scale toward making a deal.

  1. Price it properly

It’s a fact that home sellers going the “by owner” route usually price their home too high. It scares off potential buyers and the house sits unsold while they think there must be something wrong with it.

Check out neighborhood sales either online or at the county clerk’s office. Hit the local open houses and understand your competition. Speak with an agent. Or hire an appraiser yourself to give you a true picture of your home’s value.

  1. Market it where buyers are looking

Buyers search for homes online. Trulia, Zillow and Realtor.com are where you need to be these days.

The internet has leveled the playing field for home sellers, making it easy to put your home in front of buyers where they’re getting their information. Don’t waste a dime for a newspaper ad; instead place an ad on Craigslist.

Consider whether open houses will be beneficial in reaching your goal; in some communities they’re amazing for generating true buyer interest while in others they’re a complete waste of your time.

Most importantly, consider whether you’d be willing to pay a commission to an agent working with a buyer for your home. If so, you don’t necessarily need to hire an agent. Some companies will list your home in the MLS for a fee, and you’d be foolish not to market your home where agents locate properties for their buyers. Remember, more than 90% of all homes sold are facilitated by agents.

  1. Make sure it’s accessible

You’re selling your house. The only way to land a buyer is to let them in. Making it easy for them is important, even if it isn’t convenient.

Buyers have their own schedules and their own commitments, which is why it’s best to have someone available to show your home to them on a moment’s notice if necessary.

If you have a trustworthy neighbor or family member nearby, recruit them if necessary.

The most serious buyers will want to see your home during the day and during the week. Make sure you can accommodate.

  1. Negotiate the right deal

Make sure you’re able to justify your price and that you’re comfortable discussing terms with buyers or agents.

It’s not all about the price; other terms like timing, type of financing, occupancy after closing, and what you’re including and what you’re not all need to be clearly identified.

Understand what it might cost to pass on a deal; consider payments, maintenance, exposure, market timing, etc.

Make sure you understand every clause on the sales contract you sign and how it affects you.  Make sure you provide all of the necessary disclosures required by law. Decide whether it might be beneficial to hire a real estate attorney to help you with negotiations.

Most importantly, remove emotions from your decision-making. As a seller, it needs to be a business transaction. Emotions are for buyers.

  1. Close the sale

Accepting an offer is just the beginning of the sale process.

It’s important to verify buyer qualifications, including any mortgage preapprovals or proof of cash funds.

You’ll likely have an earnest money deposit that should be placed in an escrow account at your chosen title company until the closing date.

Be prepared for delays and continue to follow-up with the necessary parties as necessary including mortgage loan officers, appraisers, inspectors, etc.

Be prepared for inspection issues and valuation concerns and determine how to best address them for your benefit without killing your deal.

A good title company will help you with closing statements and documentation and should help you get necessary mortgage payoffs and lien releases prior to your closing date.

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It sounds like a lot of work, and it is.  There is a lot of time involved, too. And that’s why most sellers hire a professional to get the job done.

But following these steps will put you on the path for successfully selling your home on your own.