So you’re ready to sell your home, and you might be wondering: are real estate agents really worth it? Pocketing the commission can definitely seem appealing. However, selling your home without an agent is no short of a herculean task — you’re solely responsible for the success of your home sale.
You’ll call the shots on pricing, marketing, negotiating, and signing contracts. And without the expertise of a real estate agent, you’re more likely to make errors, the sum of which can lead to losing thousands of dollars on your home sale.
In fact, FSBO homes statistically sell for less than agent-assisted sales on average, for a median of $217,900 compared to $295,000 — one reason why only 8% of sellers sold their homes via FSBO in 2020.
If you’re considering going FSBO, you’ll need to know how to navigate all the complexities of selling a home on your own. We spoke with a top real estate agent for all the nitty-gritty on how to FSBO successfully.
1. Set your listing price objectively based on comps
Accurate pricing is critical for securing a top sale. Overprice, and your home sits on the market, eventually drawing in low bids. Under price, and you leave money on the table.
“Managing a real estate transaction can be one of the most significant things that affect a family’s finances. And when sellers decide to go it alone, they don’t get the most money for their home,” comments Chris Parker, a top real estate agent in Huntington, Indiana.
To pin your listing price at or near Fair Market Value, research comparable sales, recently sold homes that are similar to yours, also known as “comps.” You can check public listing websites for this data unless you live in a non-disclosure state where only real estate agents with access to the MLS can see properties’ recorded sales prices.
Once you identify the sale prices of homes similar to yours that have sold in the past few months, analyze your local housing market dynamics. In a seller’s market where prices are rising, you may be able to set your price higher than recent sale prices. Look into what homes still in escrow have sold for to pin the most competitive listing price. You can try cold calling the listing agents for these homes to get the intel you need.
A word to the wise: Be vigilant of letting your bias cloud your judgment. You might think the world of your house, but that doesn’t mean it’ll sell for just as much as the house down the street did last month. Maybe your kitchen remodel is just your style, but is it as contemporary as the competition? It might not be what buyers in the market are after. To combat your bias, involve a trusted friend or family member to help you set the price point.
2. Weigh the return on investment on light upgrades
Light remodeling can go a long way when you’re listing your home FSBO. But not all upgrades weigh equal — you need to research which features yield the best return on investment for your market. Design trends are hyper-local; just because buyers in Southern California want certain kinds of flooring doesn’t mean it’ll impress buyers in Connecticut.
In a seller’s market, buyers are more likely to look past cosmetic flaws because they are just trying to bid on something, Parker said. But in a buyer’s market, the seller will have to prioritize making their home as appealing as possible.
Real estate agents often know the ins and outs of the market they cover and can add additional insight before you head out to the hardware store.
3. Hire a real estate attorney for legal protection
There are hundreds of laws governing real estate. If you overstep one or fudge a contract, your buyer can walk away from the sale with their earnest money or, even worse, take you to court.
“What happens if you are in court and whichever side you’re on, you find out that the other party has an attorney?” Parker asks. “You better get an attorney to make sure that you’re on a level playing field.”
Unless you know the real estate laws in your county front-to-back, we advise you to hire a real estate attorney. They can help you draft and interpret the endless stack of closing paperwork like contracts and legal documents.
A real estate attorney costs between $750 and $1,250 on average — a sum worth paying for legal protection. Selling without an attorney can open you up to more liability, Parker says. Plus, when he works as a buyer’s agent, he charges the seller an FSBO fee if they do not have an attorney.
“I’m not doing the marketing and promotion. But I am responsible to get your side to closing, and I’ve got to have all this communication with you on mortgage payoffs, and get title insurance done, and coordinating inspections, and reviewing your settlement statement,” Parker shares. “Even though you haven’t chosen me to be a Realtor®, I have fiduciary responsibility.”
Sellers should take note of these extra fees that buyer’s agents can charge FSBO sellers. Parker usually charges about 1.5% for this service, about half of what a seller’s agent usually takes from a transaction.
4. Brace yourself for negotiating against a seasoned pro
Unfortunately, real estate transactions aren’t as easy as a one-click purchase. You have to negotiate with the buyers to arrive at the final sale price. Usually, that means dealing with your buyer’s agent.
Maybe you’re a great bargainer at the flea market, but home sale negotiations are multi-layered. You need to prepare for what happens if your appraisal comes back lower than your listing price or if the buyer requests repairs after the inspection.
Again, it’s important to take emotions out of the picture here. If you’re persistent on going it alone, involve a friend or family member to provide you with a second opinion during negotiations.
It’s also a good idea to set your bottom line, the lowest price you’ll accept for your home. Once you set this price, commit to it. Consider telling your trusted friend or family member the price, too, so they can hold you accountable if they see you stooping below it.
5. Get a home inspection ASAP
While many sellers wait until their house sells to complete an inspection, a pre-listing inspection could save you headaches down the line.
Parker shares that if an inspector finds defects in your home, it’s best to address them head-on rather than for them to come up in negotiations. Since you won’t have a real estate agent having your back, you’ll want to reduce negotiation points as much as possible.
Plus, when you get a pre-listing inspection, you can market your home as pre-inspected, sharing the report and repairs invoices with prospective buyers to draw them in.
6. List your house on the MLS
Without a real estate agent, you’re responsible for marketing and advertising your own home. While there are free resources for this, you should invest in an MLS listing to play in the big leagues. Websites specifically designed for FSBO sellers don’t receive traffic like the MLS does.
“[Buyer’s agents] are not looking at forsalebyowner.com … the Realtors® are looking at the MLS, and unfortunately those ‘for sale by owner’ folks just aren’t a part of the conversation,” Parker says.
There are a few ways to get your listing on the MLS:
- Pay a flat fee to a local brokerage, ranging between $50 and $500.
- Find an agent who offers limited services for just MLS listing, which usually costs a set percentage of the sale.
- Pay per-day for an MLS listing through a third-party website like ListSpark that offers listing services for $7 per day.
7. Hire a professional photographer and stager
Unless you’re a professional photographer, do not take your own listing photos. Your listing is your first impression to potential buyers and buyer’s agents — don’t flub it!
“How many times do we see people taking cellphone photos of a home?” Parker comments.
“We see them taking photos of a home that’s not staged, not properly lit. They don’t have accurate information.”
Agents usually work with local, trusted photographers to help market your home to the best of their ability. Without an agent, you’ll need to add hiring a photographer and potentially a stager to your to-do list. Look up real estate photographers and stagers in your area and pay close attention to the reviews. You can then get quotes from these professionals.
The average cost of staging is $1,500 but can vary depending on how many rooms you’re staging and for how long. Real estate photographers usually charge between $100 and $150 per hour.
8. Clear your schedule to manage the selling process
If you haven’t figured it out by now, going “for sale by owner” requires a significant time commitment. Real estate agents usually spend at least 20 working hours per client for an easy sale, but that number can vary widely, depending on the market and property itself. If you have a full-time job, you may struggle to dedicate adequate time to managing the agent’s typical responsibilities, in addition to the standard seller responsibilities (think cleaning and decluttering).
If a potential buyer or buyer’s agent contacts you or wants to schedule a showing, you’ll need to get back to them ASAP. Consider blocking off time each day to dedicate to your home sale. Maybe you take an hour or two in the middle of the day to respond to calls or emails. Or you set alarms on your phone to check your email periodically throughout the day.
Even if you know how to FSBO, doesn’t mean you should
From setting a listing price to marketing your home to navigating paperwork, it’s safe to say that FSBO sellers are in for quite the ride. If “Project Manager” is your middle name and you’re up for a challenge, FSBO is possible. Otherwise, consider hiring a real estate agent to do the heavy lifting.
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