FSBO – What you need to know about selling your own home

The key to selling your home yourself is to be properly prepared. If you’re not, your home may stay on the market longer than expected because you’re not attracting or receiving offers from qualified buyers. And this is where many homeowners get frustrated and start thinking about giving up on the dream of selling their homes themselves. However, some sellers are very successful selling their own homes, and you may be one of them.

This report has been specially prepared to help home sellers like you understand the process so you can sell your home quickly and for the price you want. To help you prepare, consider the following tips before deciding if this is the right approach for you.

1. Price your house correctly. Setting the right selling price is critical. Setting a price too high can be just as bad as setting it too low. Home prices are determined by fluctuations in the market, not your emotional attachment to your home or what you think your home is worth. To set a realistic price, compare the price, features, and condition of similar homes both in your neighborhood and in places where similar homes have sold in recent months. It is also important to be familiar with the terms of each potential sale. Terms are often just as important as price in today’s market. Carefully budget your sales costs and prepare a net profit sheet to determine an informed estimate of what you can expect to earn from the sale of your home. Potential buyers may request a similar analysis of purchase costs.
2. Prepare your house for sale. First impressions are crucial. Make sure your home makes a positive statement by carefully inspecting all the details and viewing it, as objectively as possible, through the eyes of a buyer. Don’t ignore needed repairs and fixes – your prospective buyers certainly won’t! Your job is to make sure your home stands out favorably from the competition.
3. Make sure you have all the necessary legal documentation. There are many important contracts and legal documents that you need to gather, complete, and understand when selling your home. Below is a partial checklist of the forms you will need for prospective buyers and for legal documentation.
   • mortgage payment
   • Loan application
   • Deposit receipt
   • Technical sheet of the property profile
   • Buyer Cost Sheet
   • Closing and liquidation
   • personal property
   • exclusion list
   • property survey
   • Seller’s Statement/Plot Representation Plan
4. Market your home effectively. Beyond the sign on your lawn, you need to find effective ways to spread the word that your house is for sale. You can reach local buyers with newspaper ads, but you’ll only reach a small part of the potential market. Be sure to include buyers who are already working with a real estate agent. To locate them, notify as many major agents in your market as possible in case their clients’ criteria match what your home has to offer. Out-of-town buyers are also an important target, so create a strategy to reach them as well. Above all, be very customer service oriented and make it easy for pre-qualified buyers to view your home. That means making sure someone is always available to answer the phone, respond quickly to messages, and be ready to give qualified prospects a tour of your home as quickly as possible.
5. Be objective when showing your home. Be sure to keep your emotions out of the sale of your home. The best way to do this during a projection is to physically remain in the background. If a prospective buyer says something negative about your home, it’s best to counter this point of view by calling attention to the positives rather than getting defensive.
6. Prequalify potential buyers. Don’t waste time entertaining buyers who can’t afford to buy your home. Investigate your financial situation regarding job security, salary, debts, liabilities and solvency.
7. Negotiate effectively and knowledge. There are a host of details that need to be worked out before a sale is considered final: price, terms, inspections, date of possession, and buyer concerns and objections, to name a few. You must fully understand the contract you have drafted so that you can, in turn, explain the details and ramifications to the buyer, and make any necessary changes to the sale. Have your real estate attorney take a close look at the contract you are using. Some realtors may be willing to help you do this. While this is happening, work to keep the buyer’s interest in your home from waning during negotiations.
8. Know your buyer. Your goal during negotiations is to control the pace and set the duration. Try to determine what motivates potential buyers. Do they need to move quickly? Can they afford the sale price of their house? Answering these questions will give you an edge in negotiations: You’ll know what you need to do to get what you want.
9. Don’t move in before you sell. Studies show that selling a vacant home is more difficult than selling an occupied one. A vacant house looks abandoned, forgotten and just plain uninviting. And it could even cost you money. If you move in before you sell, you are also letting prospective buyers know that you have a new home and that you are motivated to sell it quickly. That can, of course, give the buyer an advantage at the negotiating table.
10. Understand why you are selling, but keep your reasons to yourself. Just as important as understanding your buyer is understanding yourself. Your reasons for selling can affect everything from the price of your home to the amount of time and money you spend preparing it for sale. And knowing your motivation helps you determine your priorities: how much money you’ll walk away with, how long your property will be on the market, or perhaps both. Different objectives dictate different strategies. Someone who would rather sell without a real estate agent to save commission would indicate that money is a primary consideration (see “How to Evaluate Your Net Profit” below). Whatever your reasons, it’s very important to keep them to yourself so you don’t put yourself at a disadvantage during negotiations. If someone asks why you are selling, simply tell them that your housing needs have changed.

How to Evaluate Your Net Profit
To figure out whether or not you’ll get ahead selling your home yourself, consider that most buyers use real estate agents because it costs them nothing (the seller pays the agent’s fee). Beware: Buyers, investors, and speculators looking for properties for sale by owner are usually looking for a bargain. Low offers from these buyers will generally net you much less in the long run. Determine for yourself the following:

1. You need to be as prepared as possible with your marketing, negotiations, appraisals, exhibits, and all legal matters.
2. Estimate what it will cost to effectively market your home and gather all the necessary materials, from the “For Sale” sign to contracts.
3. What price will a buyer offer you as a Sale By Owner, less the costs identified in #2 above? Is this net amount more or less than the price an experienced agent could get for you minus his commission?