For Sale by Owner (FSBO) - Getting Started

Choosing FSBO

Is selling your home as a For Sale By Owner right for you? If you’re looking to sell your home quickly without having to pay hefty commissions, FSBO is an attractive option. It is important to remember that when selling your home you will be acting as your own real estate agent, so you’ll need to understand what makes for a successful home sale including all paperwork involved. So long as you are willing to invest the extra time and effort it takes to market your home and negotiate offers, you should have no problem selling as a FSBO.

Establish a Price

Once you’ve decided to sell FSBO, you’ll need to put a price on your home. You’ll need to be as objective as possible and not let personal attachments that are irrelevant to buyers to enter into the equation.

6 Steps to Establishing A Price:

  1. Check comparable sales and estimated market value – FREE on RealtyTrac.
  2. Look around at neighboring homes for sale and see what they are selling for.
  3. Take any upgrades or features that your home offers into consideration when comparing it to others in the area.
  4. Set your price at least 5 percent above your determined market price, which will give you wiggle room to negotiate effectively.
  5. Set your price just a hair below a round number, such as $579,900 as opposed to $580,000. The actual difference is minimal, but the perceived savings may be just enough to attract a buyer.

AVOID pricing your home too high or too low. When your home is priced too high, interest from prospective buyers dwindles. Even if you are lucky to find a buyer willing to pay your asking price, you might have trouble getting the property appraised for that amount. Of course, there’s also a danger of undervaluing your home if you rely totally on instinct. This is especially true if you purchased your home when market prices were lower.

Touch-up & Repair

Before putting your home on the market you need to step back and take an objective look. Prospective buyers will want a house that looks good and is free of problems, so you’ll need to consider making necessary touchups and fixes. Ask yourself these questions.

Is everything working? While you may have tolerated that leaky faucet for years, buyers will certainly see this as a flaw. So make sure everything in your home works, from kitchen appliances to plumbing to that backyard spa that hasn’t been turned on in years. Anything broken that you fail to point out will almost always be detected during the buyer’s inspection, so there’s nothing to gain by trying to mask that leaky faucet or inconsistent pilot light.

NOTE: It’s important to be aware of the condition of your home so there will be no surprises from what a buyer’s inspector finds. You may even want to hire an inspector of your own to check things out before you put it up for sale.

Does your home look ready to be moved into? Beyond the items mentioned above, consider any additional things you can do to make your home look move-in ready. Add fresh coats of paint here and there, and clean smudges off the walls. You may even consider making minor improvements, such as planting a new flowerbed filled with inexpensive plants like geraniums or impatiens. It will not only attract buyers, but more importantly improve your home’s value.

Remember, selling your home is a business decision, and making necessary repairs and touchups is smart business.

However, at the same time you want to AVOID over-improving your home. While making necessary repairs and touchups are going to improve the value of your home and help you sell it more quickly, major repairs that aren’t necessary, like replacing a roof or remodeling a kitchen, would likely cost more money than you’d recover from the sale.

Obtain Legal Help

While selling as a FSBO is mostly do-it-yourself real estate, there are some things best left up to the professionals. Obtaining a lawyer may cost a little extra money, but it’s an invaluable investment. A lawyer who specializes in real estate will not only protect your interests, but help you during the sales transaction including evaluating offers and mortgages, as well as preparing and reviewing contracts. Lawyers can also act as your escrow agent and will advise you on what legal forms you’ll need to complete during the negotiations and closing process.

Depending on the state you live in, you will either need to get a lawyer or go through a title insurance company.