How to Sell a House by Owner
There are downsides to listing your home FSBO, but also ways to boost your chances of success. Here’s everything you need to know to sell a house by owner.
Paying a real estate agent’s typical 3% commission means forking over a hefty chunk of change. While listing your house for sale by owner (FSBO) allows you to avoid those fees, it comes with strings attached. You’ll essentially be playing the role of a real estate agent, which can be demanding.
You’ll need to prepare to do your own comparison research when setting a price for your home. This means fielding phone calls and emails from potential buyers. You’ll also incur fees in the marketing and sale of your home, from working with a photographer to hiring a real estate attorney.
It’s a lot of work to sell your house FSBO, and it won’t necessarily yield higher net proceeds. In 2018, the typical FSBO home sold for just $200,000, compared to $280,000 for homes that were listed with help from a real estate agent. Perhaps that’s why only 11% of home sales that year were FSBO. Most people prefer to work with a real estate agent.
Should you sell your house by owner? If so, you’ll want to make every effort to get your home the same attention from potential buyers as agent-assisted listings. Follow these tips to maximize your success.
Evaluate the Pros and Cons of FSBO
Of sellers that initially list their home FSBO, 10% end up getting help from a real estate agent. That’s because many people realize early on in the process that the cons outweigh the pros. Before you list your home for sale by owner, make sure you’re prepared for the journey ahead.
List your home for sale (or sell your house for cash)
Real estate agents typically use competitive market analysis to set a fair price for your home that will appeal to buyers. In an FSBO, you’ll need to set your price carefully. Overpricing can cost more than money.
To arrive at the right price, you’ll need to dig into public records for recent comparable sales in your neighborhood. Look for homes that sold in the past 90 days. Always compare homes that are similar in size, located nearby, and in a similar condition as your home. You may even decide to get an appraisal, which typically runs between $300 and $600, to get an accurate listing price.
You may also decide to sell your home off market to a cash buyer instead of listing it for sale by owner. At Sundae, we help sellers get the best possible price for your home with no fees and no obligation. If you request an offer from Sundae’s marketplace, you won’t have to pay any real estate commissions, and you’ll skip the hassle of preparing and showing your home.
Prepare your home for showings
You’ll want to make sure your home is photo-ready for your listing. It should look the best it’s ever looked when potential buyers pull up to the curb for a showing. At the very least, that means thoroughly cleaning and decluttering your home.
You may want to remove some of the furniture to give viewers a better sense of the space. You’ll definitely want to remove personal items, like family photographs and any valuables.
If you want to go the extra mile, hire a professional home stager. The National Association of Realtors reports that sellers spend a median of $400 on home staging. Meanwhile, 22% of sellers’ agents said home staging got them offers that were 1% to 5% higher when compared to similar homes that weren’t staged. And 28% of sellers agents said staged homes spent less time on the market.
Last but not least, consider making any necessary repairs. You don’t need to remodel, but you might need to address issues that would come up in a home inspection. You may also want to give your home a fresh coat of paint, add lighting, and improve your landscaping to make your home look its best. Keep in mind that if you make significant improvements that increase the value of your home, it will increase your cost basis when it comes time to pay taxes.
Read More: Checklist for Selling a House
Advertise your home
Promoting your house starts with professional photos and an appealing listing description. It’s definitely worth hiring a professional photographer, which will typically cost a few hundred dollars. When writing the listing, call out any special features or details that make your home stand out. Don’t forget to mention basic details and nearby amenities.
Next, you’ll want to get the word out. This might include one or more of the following strategies:
- Listing your home on Craigslist, Nextdoor, and Facebook
- Putting up signs or distributing paper advertisements
- Listing your home FSBO on Zillow, Trulia, and other listing sites
- Paying a real estate agent a flat listing fee to list your home in the Multiple Listing Service
- Hiring a discount broker to list your home on the MLS and possibly handle showings for about 1% commission
Show your home
Once you’ve listed your home, you’ll need to answer calls and emails at all hours of the day. This requires flexibility to work around your daily life to schedule showings. You may also want to schedule an open house to attract several potential buyers at once.
You’ll be responsible for making adjustments to the listing if your home doesn’t sell right away. The longer you let your house stay on the market, the less appealing it will seem to buyers. After a few weeks, you may need to lower your asking price. Other ways to sweeten your home’s appeal include offering furniture or a home warranty, paying some of the closing costs, or making other seller concessions.
Sell to a qualified buyer
Once you have an interested buyer, let them know they’ll need to submit their offer with a pre-approval letter from a mortgage lender. This assumes they’re planning to finance the purchase. If the buyer makes a cash offer, they should be able to show proof of funds.
In 21 states and the District of Columbia, you’re required to hire a real estate attorney to oversee the sale. Even if that’s not a requirement in your state, it’s wise to hire someone to review all the important documents.
Further reading: What You Need to Know About Cash Homebuyers
Alternatives to FSBO
If you’re strapped for cash and pressed for time, you can avoid real estate commission fees without listing your home FSBO. Selling your home off market means never listing it for sale. You don’t have to hire a real estate agent, make any repairs, or schedule showings. You have a number of options when it comes to selling off-market, including:
- Selling to an investor
- Selling to a fix-and-flipper
- Working with an iBuyer
- Choosing an offer from Sundae’s marketplace
Fix-and-flippers typically submit low offers to make the most possible profit. iBuyers are notorious for charging high fees. At Sundae, we aim to provide you with a range of offers from a list of hundreds of vetted property investors. You may even be eligible for a cash advance of up to $10,000 after your inspection to help with expenses. Not to mention, you’ll avoid those pesky real estate commission fees and closing costs as well.
See also: 5 Most Popular Ways to Sell a House
Consider your options carefully when deciding how to sell a house by owner. While you may want to get the best price for the lowest cost, remember that your time is valuable, too. Listing a home FSBO can be a stressful process that isn’t without hiccups. Finally, if you’re stuck on your decision, find out how others navigated the selling process.