So, you’ve decided to go FSBO (For Sale by Owner). There are lots of reasons why selling your home on your own might make sense. Maybe you want to have more control over the selling process. Maybe you want to pocket more of the profit from the sale and want to avoid spending your cash on your agent’s commission and the buyer’s agent’s commission.
Those are all solid reasons to take the FSBO route. But depending on the market and your level of real estate know-how, taking on the challenges and responsibility of selling a home could be risky.
The FSBO option requires a lot of work, patience, flexibility and some basic knowledge of the home selling process.
And, spoiler alert: Even if you save money on agent commissions, your home may sell for less than if you went through a traditional real estate agent.
Benefits and Drawbacks of For Sale by Owner (FSBO)
Although the FSBO route may be appealing at first glance, there are definite benefits and drawbacks because of the complications it can bring. Let’s explore a few that stand out.
- You’ll avoid having to hire, pay commission to and work with a real estate agent.
- You’ll have complete creative control over how you stage, market and ultimately sell your home.
- Because the decision of how to sell ultimately comes down to you, you won’t compromise on things you may not be comfortable or happy with and can wait for the right buyer.
- While you’ll save on commission on the home sale, you may spend more money upfront because you’ll have to do a lot of the staging, photography and listing on your own.
- You’ll have to become familiar with real estate terms and concepts quickly.
- You’re emotionally attached to your home and it may be difficult to be objective during each stage of the process.
Still interested in going FSBO? We’ve got 10 FSBO tips to get you started as a home seller:
1. Prep Your Home
Before you start advertising your home to buyers, repair, update, clean and stage it.
- Repair: Make any needed repairs. This might mean fixing leaks in the plumbing, repairing the roof, installing new windows or maintenance on the HVAC system. These repairs can raise the value of your home and help it pass a home inspection.
- Update: Are your wood floors scratched? Could your walls use a paint job? Does your kitchen need a refresh? Making necessary updates can help raise the value of your home.
- Clean: Hire a professional cleaning service to scrub your home until it’s grime and dust-free. Every window should sparkle, every mirror should shine and your walls should be spotless.
- Stage: Finally, you should stage your home to stoke prospective buyers’ imaginations.
2. Ask for a Second Pair of Eyes 👀
Your home is yours. And everywhere you look, you see a memory.
While your memories are precious, you are trying to sell this home for new people to make memories in. Your home needs to be scrubbed of anything too personal. Let your home be a blank slate for prospective buyers.
Once you’ve repaired, updated, cleaned and staged your home, ask a friend or someone impartial to walk through the house and experience it from a buyer’s perspective. Ask them to watch out for anything that stands out in a bad way, needs a little more attention or just needs to be changed.
3. Make Sure Your Home Listing Stands Out
Pictures of your home and your listing description have one job: to sell your home. But they need to be more than click-worthy. They should start the aspiring home buyer on a journey that draws their attention to each unique feature of your home and, hopefully, ends with them seeing themselves living there.
- Professional photography: One of the best investments you can make for a FSBO sale is to pay for professional photography. Real estate photographers have experience staging, lighting and capturing homes in a way that highlights their unique qualities.
- Listing description: Your listing should be short, punchy and captivating. This is your chance to point out unique features in the photos and pair them with descriptive wording and adjectives. Keep your listing to under 250 words. You don’t want to lose a buyer’s interest between walls of text.
4. Advertise, Advertise, Advertise
How do you plan to get people to see this professional and totally compelling listing?
Post your listing on your local multiple listing service (MLS). The MLS is a professional space for real estate agents and potential buyers to access home listings.
While real estate agents have automatic access to the MLS, FSBO sellers will have to do a little legwork. As a seller, you’ll have to pay a flat fee, usually a couple of hundred dollars to list your home.
The MLS filters down to the major listing sites and will put your home in front of even more prospective buyers.
If you have enough followers or can figure out the right hashtags, consider posting your listing on social media. You should also check if your company has a community forum or message boards you can share your listing on.
Call us old-fashioned, but you could always advertise using word of mouth. Tell friends, family and co-workers that you’re selling and looking for a buyer. Who knows? Someone close to you might be looking for a home or know someone who is.
If you have a front yard, put a “For Sale By Owner” sign up. Don’t underestimate the power of a yard sign!
5. Show Your Home Like a Pro
So, a prospective buyer wants to see your home? First of all, congratulations! All your hard work has led to this visit. But there’s still more to do.
Here are a few of our favorite home showing tips:
- You should point out the best features of your home while you’re touring with potential buyers and their agents.
- Quiz potential buyers on their needs and adjust your pitch to fit their situation. For example, if the buyer has children, point out the rooms you think could work as a kid’s bedroom or show them the prime spot in the backyard for a treehouse.
- If you’ve got pets, send them to a friend’s place or a kennel while you’re showing. You’ll also want to remove any evidence of your pets, so vacuum any fur and hide any cages.
- Treat the buyer like any guest. It won’t hurt your standing with the buyer to offer drinks or treats. It might make their visit to your home stand out.
6. Be Flexible and Avoid Alienating Buyers and Agents
Without a real estate agent to help you, you’re the primary point of contact for buyers and their real estate agents. That means you have to be available at all times for whatever they may need.
In the beginning, this could mean fielding questions and setting up showings. In the final stages, it could mean negotiating the sale price, managing multiple bidders and collaborating on legal papers.
If you’re working with a buyer’s real estate agent, remember that you’re working with a real estate professional. You’ll need to be prepared to negotiate with them at their level as a seller.
Take this responsibility seriously. Be flexible and respond to any inquiries quickly.
7. Check for Preapproval
Ask interested buyers for a mortgage preapproval letter. A mortgage prequalification letter might work, but a preapproval letter is better.
A preapproval letter demonstrates that a buyer is serious about buying and has already taken that first step of talking to a mortgage lender. Those are all things you’ll want to see in a prospective buyer.
8. Hire a Real Estate Attorney and a Title Company
Even though you’re selling the home on your own, it’s important to hire a real estate attorney and title company. The title company will draw up the title and can set up the escrow account. A real estate attorney will prepare and review documents related to the sale.
A real estate transaction is likely the biggest sale you’ll ever make. The mortgage contract, title transfer, escrow account and various legal documents can be extensive and dense. Having experts by your side during the legal process will help ensure a smoother transaction.
9. Price Competitively and Be Willing to Negotiate
Whether you’re in a buyer’s market or seller’s market, it’s important to price competitively. Do your research and look at what comparable homes in your area are selling for.
- Factor in any repairs or updates you’ve made during the process. These alterations should raise your home’s value.
- Be willing to negotiate the sale price with home buyers, but know you don’t have to accept the first offer – especially if you have multiple offers.
- It’s natural to be attached to a home. Ask a trusted friend or family member who’s bought or sold a home to look over offers with you to help depersonalize the process. You might benefit from a gut check!
10. Consider an iBuyer
iBuyers or “instant buyers” are real estate companies (in select cities) that allow you to sell your home in a simple, hassle-free way.
You submit details about your home listing, location and features and the company will decide whether they’re interested in buying the home. This process is quick. You could get a cash offer in as little as 24 hours.
While iBuyers don’t usually have standard closing costs, they do have service fees that are a small percentage of the sale price, usually around 5%.
You don’t need to clean, repair or stage for iBuyers. They will factor any repairs into their offer. While you may make less if you sell to an iBuyer, it can be a way to sell your home faster.
Channel Your Inner Real Estate Agent
When you’re selling, it’s the perfect time to proudly show off how incredible your home is. You can highlight the things you love about living there, from the type of flowers that return every year in your front yard to the view from your favorite window.
But you’ll have to do more than sell the best parts of your home when you decide to go FSBO. With great power (and potentially greater profits) comes greater responsibility.
You’re in charge of everything, and you have the power to make or break a sale.