What You Need to Know When Selling as For Sale By Owner

Selling your house can be a complicated process, but in the end the only thing that matters is finding one viable, qualified buyer to complete the sale. One of the first decisions you will have to make once you decide to sell is how you will find a pool of interested, qualified buyers in order to find the one that will ultimately complete the purchase. One option that you might be considering is doing it yourself – commonly referred to as For Sale By Owner (FSBO).

Intuitively, you know that there is an easier way to sell your house, such as working with a Realtor® or an investor, but maybe you’re thinking that you’ll walk away from the sale with more money in your pocket by doing it yourself. In this blog we’ll take a closer look at what you need to know when selling as For Sale By Owner and the other options available to you, so you can make the best decision for you.

Statistics on FSBO Sellers

At the beginning of your home selling journey, it makes sense to think about how to get the most amount of money from your investment. You might be thinking that going it alone will be easier, faster, and even mean more money in your pocket. Here are some recent statistics from the National Association of Realtors report that will help fuel your decision:

1. 61% of FSBO sellers are trying to save money.
2. 37% are trying to save time.
3. 36% are confident they can sell without an agent.

However, the report also shows that:

1. An estimated 25% of home sellers in the U.S. tried and failed to sell FSBO.
2. Only 7% of recent home sales were FSBO sales this year.
3. FSBOs typically sell for less than the selling price of other homes; FSBO homes sold at a median of $260,000 last year, significantly lower than the median of agent-assisted homes at $318,000.
4. 57% of FSBO sellers knew the buyer of the home

Selling as For Sale By Owner

FSBO refers to the process of selling your house by yourself. While the vast majority of American home sellers work with a Realtor® to sell their homes, a minority are willing to put in the time and effort necessary to go it alone.

It’s enticing to sidestep a real estate agent and sell your home on your own. You could save thousands of dollars in commission fees if all goes well. Unfortunately, it’s not that clear-cut. Selling a home can be a complex process, and you need to have the appropriate expertise and enough time to close a deal that gets you fair market value.

If you decide that selling as for sale by owner is for you, here are the steps you’ll need to follow to do it successfully.

1. Get Your House Ready – If you need to make minor repairs in addition to freshening up the interior and exterior this could take a while. This is a critical step and it’s best not to market your house until this is done. You also need to stage your house as early as possible for photos that will be posted online.
2. Set the Price – To choose the right price you could research homes recently sold in your area, get a comparative market analysis from an agent, or consult real estate websites for estimates. You should also hire an appraiser, as that will be a requirement during the home buying process anyway.
3. Market Your House – There are several FSBO website options as well as the MLS, and the costs can add up if you’re not careful. You could also put up yard signs, print flyers, post on social media, talk to friends and family and possibly even set up your own website.
4. Show the Home – In-person visits can be tricky, especially if you have children and pets to get out of the home for every showing. One option is to offer a video tour that’s live or online, but eventually, the prospective buyers and inspector will need to have an in-person look.
5. Review Paperwork and Negotiate – You’ll need to review a buyer’s offer in writing and the purchase & sales contract. You should hire an attorney to help make sure you get this essential step right. Prospective buyers will try to include contingencies that can make the purchase dependent on what they discover during the inspection, for example. Also, you need to provide disclosures to buyers, which are often required by state law and vary by state.
6. Close the Sale – This is the final stage of the process and most states require you to have an attorney for this.

The hope is that, once you’ve closed the sale, you’ll get the price you want for a cost that would be less than if you had hired a real estate agent.

Professionals You’ll Need

Even if you choose selling as for sale by owner, there are some real estate professionals you will need to hire:

1. A professional appraiser will provide some valuable insight into how your home compares with similar ones in your area.
2. Unless you are an expert in contract law and negotiating expensive deals, you will need to hire a real estate attorney who can help review the purchase & sales contract, negotiate issues related to the inspection, and assist at closing.
3. Sellers usually provide the owner’s title insurance policy, which can be obtained through a title company. Once you are under contract, the title company could be an impartial third party to hold the buyer’s earnest money. The company also could help you with preparing closing documents and disbursing funds at closing.

Sound easy? Or maybe it sounds like a lot more work than you anticipated. Let’s take a look at some of the downsides of selling as for sale by owner that could lead you to seriously consider other options.

Some FSBO Downsides

The prospect of walking away with more money when selling as for sale by owner can seem attractive. But before you make your final decision, consider this:

1. FSBO homes sold for 26% less than homes represented by real estate agents.
2. Realtors representing buyers may not show a FSBO because they know there won’t be a professional colleague on the other end of the transaction and they might not want to deal with the risks of trying to close the deal without a professional representing the seller.
3. You have a full-time job. Can you rush home from work every time someone wants to see your home? Can you excuse yourself from a meeting every time your phone rings with a potential buyer? At the end of a long workday, do you have the energy to take advantage of every possible opportunity to market your home? Are you an expert in marketing homes?
4. You don’t have relationships with clients, other agents, or a real estate agency to bring the largest pool of potential buyers to your home. A smaller pool of potential buyers can mean waiting longer to sell your home and possibly not getting as much money as your house is worth.
5. Do you know how to find out whether someone who wants to view your house is really a qualified buyer? It’s a lot of work every time you have to put your life on hold, make your house look perfect, and show your home.
6. You’re not an expert in what makes homes sell. A real estate agent can walk through your home and point out changes you need to make to attract buyers and get the best offers. They can see flaws you might not because you see them every day. They can also help you determine which feedback from potential buyers you should act on after you put your home on the market to improve its chances of selling.
7. A lot of legal paperwork is involved in a home sale, and it needs to be completed correctly by an expert. A seller can be held liable for fraud, negligence, or breach of contract if they do not disclose properly. If you fail to disclose a hazard, nuisance, or defect—and the buyer comes back to you after having moved in and found a problem—they could sue you.

If you’ve read this far, maybe you’re beginning to think that selling as for sale by owner isn’t such a good idea after all. Maybe you’re also wondering if there’s a way to sell your house quickly without having to pay all the commissions and fees that come with working with a real estate agent. There is!

Sell Your House to Us

Black Girls Buy Houses will buy your house for cash and will close the sale in a matter of a few weeks. On top of that, we’ll buy your house in as-is condition. This means you’ll save time and money by not having to spend money on repairs and staging. And, best of all, when you sell your house to us, there are no fees or commissions to pay!

Maybe you’re thinking that if you sell to us you’ll walk away with less cash than if you sell it yourself or work with a real estate agent. In actuality our clients usually walk away from the sale with around the same amount of money because you don’t have to pay commissions, fees, or for repairs when you work with us. You are liable for some, or all, of those costs when selling as for sale by owner or working with a real estate agent.

So if you’re ready to sell and you are in the decision-making process, we hope you’ll want to talk with us. Click here to schedule a time to learn more about how we can help you sell your house today.