For Sale By Owner – How To Sell Your Home Yourself FAST!
You have finally made the decision that it’s time to sell your home and you’re going even bolder and choosing to sell it yourself, also known as “for sale by owner”. I can already hear the responses. What?! You don’t want to use a real estate agent? Are you crazy?
That is the first reaction I got when I made this choice. I also heard that I had no idea what I was doing AND it would sit on the market for months AND I would be stuck with a mortgage payment. To be honest, in hindsight I didn’t know all that much. But I can happily report after being on the market for just under 45 days, I have successfully closed on that property.
How do you successfully list, market, and sell your home fast when listing as a for sale by owner?
First off, you better be ready to put in the time and sweat equity because it takes a lot of both. Secondly, you can and should leverage online tools like Zillow, Craigslist, and even Facebook to market your home. Lastly and most importantly, when it comes to selling, you have to speak openly and honestly about the property to a potential buyer. The combination of these three things will make your for sale by owner experience a breeze.
Selling your home as a for sale by owner is not a walk in the park but it’s more than possible. In this article, I’ll tell you how you can do it successfully and avoid the mistakes I did, hopefully saving you hundreds if not thousands of dollars.
Do You Need A Realtor?
This section may ruffle some feathers but the short and sweet answer here is no. Realtors can be incredibly valuable to anyone buying or selling a home but for me, I didn’t believe one was necessary.
The main reason I chose to sell my home as a for sale by owner is that I wanted to save the money. Yes, I understand that some realtors produce enough value to earn their 6% commission check but unfortunately, most don’t. Paying someone $10,000 + to sell a property that I knew inside and out made absolutely no sense to me.
Besides, this wasn’t a primary residence for me and instead was a rental, or investment property, as some call it. Because of that, I wanted to do whatever I could to maximize the return on my investment.
Side note, most people don’t understand how realtor fees work so let’s break that down real quick. I’m not going to use my real numbers because that information doesn’t help make my point any better than a simple example.
For this example let’s say you sell your home for $200,000 and you still owe the bank $150,000 on the mortgage. If you hire a realtor and they sell your home for the asking price, you are going to be paying them a 6% commission. This assumes the buyer and seller each have their own realtor, which in most cases they do.
After some quick math, you’ll know you are going to be paying $12,000 in commission. What does that leave you with at the end of the day? Well, you have your sale price of $200,000 minus your remaining mortgage of $150,000 which gives you $50,000. Then you need to subtract your realtor fees of $12,000 leaving you with $38,000.
To me, that’s a huge deal. Just think about what you can do with $12,000. That’s a healthy chunk of money. On top of this fee, you are going to be paying fees that are unavoidable whether you have a realtor or not. These include property tax, closing fee, and owner title insurance. At my close, these three combined to be over $2,000.
If you want to learn more about real estate as a passive income investment then read my article: Is Real Estate The Best Form Of Passive Income? – Answered Simply
Can You Sell?
The second major reason I opted to do a for sale by owner is that I’m comfortable selling. When you are selling your home by yourself, it means you have to give tours, sales pitches, and be ready to negotiate with people face to face. If you aren’t comfortable meeting with strangers in your home and doing these tasks that aren’t done in your typical day, then definitely find yourself a realtor.
This isn’t as intimidating as you may think it is though. As an example, my buyer and I hashed out everything and actually signed the sales contract in the Starbucks of a local Kroger. Literally right next to the fruits and vegetables.
Some may argue that I’m not factoring in the cost of my time doing all of this. But I 100% believe I came out on top even though I was the face of the buying experience. Whether you use a realtor or not, you are still going to be answering phone calls and emails going back and forth through negotiations. That still takes time.
Prepare To Roll Up Your Sleeves
No matter if you are using a realtor or selling your home yourself, you better be ready to roll up your sleeves. The old saying goes, “You never know how much crap you have until you have to move”. Honestly, I don’t know if that is an old saying or not but it sure rang true for me and based on the dozens of Facebook statuses I’ve seen, it has for others as well.
Like I mentioned above my home was a rental property. Unfortunately, this meant that over 10 different people had lived in it over the last five years. When I decided I was going to sell the property, I went to the house to estimate how much stuff I was going to have to get rid of. I learned just how bad I was about making sure the property was cleaned out with each new tenant. A couple of trips to the dump and over 20 trash bags later, it was finally clean.
If you’re going to sell your house you need to have it cleaned out, no question. This isn’t just for the sake of giving tours but you need to actually take pictures so you can list the property. More on that later though. Here is a list of all the prep work that went into getting my home sold:
- Tree removal
- Bedroom Painting
- Cleaning, cleaning, and more cleaning
What I would also suggest doing is making an organized list of all the improvements you have made to the property since you owned it. This shows the buyer that you care about the property and also lets them know you are being transparent. I think having that list really helped sell my home as I knew each and every piece. Here is my copy:
Since we are talking about the hands-on work already, we might as well mention what is going to happen after a buyer gets an inspection done. Unless your buyer is crazy, they’ll get an inspection done on the property. No matter how perfect you think your home is, something will come up on that inspection that a buyer wants you to fix before they will sign a contract.
Usually, it would be on your real estate agent to pass this information back and forth but since you are selling your home yourself, it is all on you. If you are good at communicating with people face to face, then this is a huge opportunity for you to get a little more return on your investment and save yourself time.
This is all about leverage, especially if you have multiple competitive offers. While you may have already agreed on a sales price, understanding what needs to be fixed and the cost of that can all be negotiated. All it takes is a little creativity.
To start, let me outline all of the things that an inspector found on my home:
- Toilet wasn’t screwed tight to the ground
- Tub spout jammed
- Window frame had dry rot
- Termite damage
- Sprinkler plug was dripping
- A GFCI was missing in the garage
When I got this list, I looked it over and asked myself what I could do fast and cheap versus what would take me a lot of time and money.
I then went back to the buyer and told him I would fix everything except the dry rot on the window. Why? Well, I knew that this would mean I would have to replace the whole window and it was going to cost me around $1,500. Instead of fixing it I took a little off my asking price. It was less than I expected the window to actually cost, but enough to be significant. Thus, saving me time and money.
Listing and Pricing Your Home Correctly
As I mentioned earlier, technology has made selling your home as a for sale by owner incredibly easy. We have websites like Zillow, Craigslist, Realtor, and Facebook that allow us to list a property in under 10 minutes.
Yes, you read that right. People are selling homes on Facebook and I’m seeing more and more pop up every day.
Let’s back up though. Before you list, you need to make sure you have all the material ready for that listing. This means your description, photos, and asking price.
One of the big benefits of having a realtor is that they bring in a professional photographer with a nice camera and a wide angle lens to take professional pictures. These pictures look great, no doubt, but again they aren’t worth the commission to me. There are actually freelance real estate photographers out there but if you can do something yourself, why wouldn’t you?
Chances are you have a smartphone and that phone has a better camera than you may think. In addition, there are some great FREE photo editing apps out there that will make you a real estate photographer in 10 minutes. Here is a photo I took on my iPhone and put through an editing app to add some pop to the picture. How do you think it came out?
A little bit of trial and error, mixed with a clean house and fresh cut lawn and you can take high-quality pictures of your listing all by yourself.
The only thing left is to be creative in describing all the aspects of your home. You do not have to be a writer to come up with a catchy description. What I did was look at other listings online who were written by professionals. I then took my ten favorites to give me an idea of how I wanted mine to sound. Honestly, you would have thought I was selling a mansion. People love a good show, so make sure that you use lots of adjectives.
Setting Your Sales Price
The absolute most important thing you can do when selling your home is getting your asking price correct. Again, this is where the expertise of real estate agents come into play but you can leverage
One of the best things I learned when doing my for sale by owner was how to play dumb. If you have your home listed online you are going to get calls and most of them will be from agents trying to get your business. They will use the most annoying sales pitches and anything else they possibly can to get your business. Don’t fall for it.
Instead, use your leverage again. You have the home that they want to sell so why not get some information out of them. When these agents would call me, I would play dumb and act like I had no idea what I was doing. The topic of price was usually the first thing that came up and I had a whole skit together of how I pulled my asking price out of thin air (which I didn’t).
I would then ask “You know if I hired you what would you sell this house for”. 99% of the time they would answer with a legit price because again they are the expert.
This is how I got my asking price and some professional advice for free.
Zillow and other websites will have estimates for what your home is worth but I have found them to be a little off. Sometimes even $1,000’s of dollars off. If you list your home too high, you are going to scare potential buyers away; too low and you’ll cost yourself a ton of money.
List Your For Sale By Owner
It’s finally time to list your property. If I could go back and do this all again, I would honestly post it on Facebook first. People know you there and they may know the property. I believe this sense of trust can go a long way, especially when people are going to be making such a large purchase.
Other than that, stick with the reputable sites I mentioned above like Zillow, and Realtor. I did mine 100% through Zillow and going through the process of listing took me 10 minutes. It was almost too easy.
Some people may suggest you list your property in the paper or put out flyers. To be frank, that is way too old fashioned and not very cost effective. Spend your time wisely and stick to the internet.
One of the huge negatives of doing a for sale by owner is that you are missing out on the opportunity to list your home on the MLS (Multiple Listing Service). This is a service for licensed realtors who can post a property and it will automatically spread the property everywhere. Yes, it brings a ton of exposure to your home but I think it is overrated. Who cares if thousands of people view your listing? You just need one person who will buy it.
If you feel like you are missing out on not using the MLS, you can call a realtor and usually pay a one-time fee to have it listed there. I had this quoted for my property and was told that it would cost $350 to do this, so it’s fairly expensive.
Negotiate and Close On The Property
You have put a ton of time and effort into selling your home yourself, it is finally time to negotiate a final contract and close on the property. At this point, most of your hard negotiations are probably already done. You have figured out what needs to be fixed from the inspection and you and the buyer have already sorted all of that out.
It’s time to sign a contract. For my for sale by owner, the buyer drafted up the contract. You can find real estate contract templates online or if you can just copy the one you used when you bought the house in the first place.
One thing you might consider is adding in an addendum. An addendum is a contract outside of the main contract. What this contract does is add anything special you want. For example, I put that the buyer was aware of the window dry rot. He then added in that I would have the carpets professionally cleaned and a termite treatment put down.
Another one was that I wanted all the appliances out of the home. I had just bought a new dishwasher a couple months ago and he was planning on replacing it so I asked if he would give them all to me for free. He agreed. In turn I got a dishwasher, fridge, stove, microwave, and a nice front load washer and dryer.
Most of these I’ll end up selling on Facebook Marketplace to help add a little more cash to my wallet. Not a bad deal.
You can add in anything you want that will make your life easier and help you feel like you are getting a better deal.
The Title Company
It doesn’t matter if you are using a realtor or selling your home yourself you will still most likely have to use a title company. The only instance where a title company is not necessary is when you own a property outright and they are paying in cash. Other than that your bank, or the buyer’s bank, will require it.
If you are selling your home by yourself then put it on the buyer to set up the closing with the title company. They should have no problem doing this since they want your house.
Title companies charge fees when doing a closing. Whether these fees are overpriced or not is a whole different topic but just understand that they are there.
What they will do is set a date of close. You come in and make sure your contract, addendum, and everything else is correct, then just sign the paperwork. That’s it. From there the title company will file everything with the county, or city and you will get a check right then.
The Bottom Line
You are all ready to sell your home yourself. Whether that is preparing your home, setting the asking price, or taking some professional looking pictures. No matter the challenge you can do it.
I hope this article calmed your nerves and steered you in the right direction when it comes to selling your home yourself. Remember, no matter how much you prepare, how hard you work, there will always be minor things that go wrong. It is just a part of it and whether you have a realtor or not you will have to deal with it.
This may seem like a ton of work up front (which it is) but walking out of that title company with a check knowing you saved yourself tens of thousands of dollars is an amazing feeling. Lastly, you should feel empowered that you did something that people thought you were crazy to even try.
Good luck and if you have any questions don’t be afraid to reach out via the Contact Us tab!
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