The power of potential

Real Estate

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 be on the market longer than expected because it’s not attracting or receiving offers from qualified buyers. And this is where many homeowners get frustrated and begin to think 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 home correctly. Setting the right selling price is critical. Setting the price too high can be just as bad as setting it too low. Home prices are determined by fluctuations in the market, not by your emotional attachment to your home or what you think your home is worth. To establish a realistic price, compare the price, features, and condition of similar homes both in your neighborhood and where similar homes have sold in recent months. It is also important to be familiar with the terms of each potential sale. The terms are often as important as the price in today’s market. Carefully budget your selling 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. Prospective buyers can 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’ll 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/Parcel 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 home is for sale. You can reach local buyers with newspaper ads, but you will only reach a small part of the possible 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 if their client’s criteria match what your home has to offer. Out-of-town shoppers 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 house. Be sure to keep your emotions out of the sale of your home. The best way to do this during a screening is to physically stay in the background. If a prospective buyer says something negative about your home, you’re better off countering this view by drawing 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. Research your financial situation regarding job security, salary, debts, liabilities and creditworthiness.
  7. Negotiate with efficiency 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 drawn up so that you can, in turn, explain the details and ramifications to the buyer, and make any necessary modifications to the sale. Have your real estate attorney take a close look at the contract you use. Some real estate brokers may be willing to help you do this. While this is happening, work to maintain the buyer’s interest in your home so it doesn’t wane 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 selling price of their house? Answering these questions will give you an advantage in negotiations: you’ll know what you need to do to get what you want.
  9. Do not move before selling. Studies show that selling a vacant home is more difficult than selling one that is occupied. A vacant house looks abandoned, forgotten, and just plain unattractive. And it could even cost you money. By moving in before you sell, you’re also letting prospective buyers know that you have a new home and 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: the money you walk away with, how long your property will be on the market, or perhaps both. Different goals dictate different strategies. Someone who prefers to sell without a real estate agent to save on commission would indicate that money is a primary consideration (see “Assessing Your Net Profit” below). Whatever your reasons, it’s very important that you keep them to yourself so you don’t put yourself at a disadvantage during negotiations. If someone asks why you’re selling, simply tell them that your housing needs have changed.

How to evaluate your net profit
To find out whether or not you’ll get away with 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 usually get you much less in the long run. Determine for yourself the following:

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


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