This article is written by Peters and Associates.
The spring and summer months are prime home-buying and selling seasons, and for many, hiring a real estate agent can seem like a must. However, this isn’t the case.
Although there can be benefits to using a real estate agent, you can save what you would spend in commission costs by listing your home FSBO, or for sale by owner. Such sales can be risky, and they aren’t the norm in most markets, but bucking the trend could mean saving tens of thousands and selling on your own terms.
How to sell a home FSBO
1. Hire a real estate attorney
If you’re selling your home FSBO, you’re probably trying to cut costs, but you can’t skimp on a real estate attorney. A home sale is a complicated and high-stakes legal transaction that requires a professional, so retaining an experienced lawyer should be your first priority.
Your attorney will be able to advise you on real estate laws in your area, zoning regulations, terms of the sale, pre-sale paperwork, buyer approval processes, disclosures, caution precedent agreements, closing contracts, loan documents and more. Some may even be able to get your home listed on the Multiple Listing Service, a professional realty-listing site that can help drive sales.
There’s no way around using an attorney at some point during an FSBO, so it’s best to hire one early to ensure everything is on track throughout the process.
2. Price your home
This can be done on your own or with the help of an appraiser.
To price your home independently, research the value of other homes in the area and the price of recent sales. If you’re not in a hurry to sell, price it on the high end, and remember that you can dip lower than your original asking price from the money you’re saving by selling it FSBO.
Also, real estate agents may be willing to provide a comparative sales analysis of your home (“pull comps”) in an effort to try to earn your business — but, do not sign a listing agreement unless you plan to abandon the FSBO route.
3. List and market your home
List it on the MLS, either with the help of your attorney or for a flat-rate fee. You can also list it on fsbo.com, an owner-selling site that offers marketing packages.
From there, you can market using yard signs, newspaper ads, classified listing services, social media and more. The goal is to reach as many potential buyers as possible.
4. Clean it up and host an open house
Your house should be in selling condition by now, but getting it ready for an open house means cleaning it thoroughly and removing most of your personal items. Steam clean the carpets, wax the floors, wash all lighting fixtures and windows, repaint anywhere it’s needed, etc.
Your house should be spotless for a showing, and the more neutral your home looks, the better.
5. Fielding, negotiating and accepting offers
Require that all offers are put in writing by way of a real estate purchase contract. Your lawyer will help you with this. Also require that the buyer provide a preapproved mortgage letter from a bank, or proof of funds. It’s important to know that the buyer is able to get the loan before negotiations.
Once you get the contract and preapproval from the buyer, you can either accept their offer or revise the contract and send it back to them. Do not accept an offer before your attorney examines the contract.
6. Closing the deal
Once you’ve accepted the offer, you’ll need to work with your attorney and the buyer (and their attorney or real estate agent) on the seller disclosure forms, buyer conditions and any other necessary legal agreements for the sale.
Your lawyer will help you with that process as well as engaging an escrow/title company, which is common in all real estate deals.
7. Transferring the title
During this time, you’ll also need to work with an escrow officer at a title company to transfer the home title to the buyer and purchase a title insurance policy. If there are any outstanding liens on the property that threaten the title transfer, your attorney will be able to help negotiate them.
Please note: The information in this column is intended for general purposes only and is not to be considered legal or professional advice of any kind. You should seek advice that is specific to your problem before taking or refraining from any action and should not rely on the information in this column.