Image courtesy of Flickr, Mark Moz
What's the secret to being successful at selling your home FSBO? We've provided stories from three people who have had success selling their own home without using a real estate agent. Here's what they had to say.
The main reason to sell your home ''for sale by owner,'' or FSBO, is a great one: Doing so can save you lots of money.
But most people, 89 percent in 2015, don't use this method. Why? There are all sorts of reasons, but the main one is that people simply don't know what to do or how to be successful selling FSBO.
Case in point: I recently noticed a FSBO sign in front of a house near me. The sign looked unprofessional and homemade, there were few photos of the house online (I looked), and the description of the home was generic. In a matter of just a few days, this home's FSBO sign was removed from the yard, and a new sign from a real estate agency replaced it. The owner apparently quickly gave up selling FSBO. But that might not have had to happen if this homeowner had a better FSBO plan. So what's the secret to being successful at selling your home FSBO?
We've provided stories from three people who have had success selling their own home without using a real estate agent. Here's what they had to say.
Moving expert and blogger at The Art of Happy Moving, Ali Wenzke, sold two homes FSBO - the first one in Chicago, IL, (and with three children under age 3!) and the second in Knoxville, TN, just two years later. ''Selling FSBO isn't for the faint of heart,'' says Wenzke, who sold both homes when the market was down: one in 2009 and the other in 2011. ''Despite the challenges, my husband and I wanted to save the money that would otherwise go to a real estate agent.''
Wenzke explains how she sold the Chicago house.
''First we decluttered and depersonalized our home. This is an extensive process, so we started early. Second we took amazing photos of our immaculate space. Professional looking photos would sell our home. Third, we signed up for a flat-fee listing service.'' This was an important step for the Wenske family. ''Without a listing on the Multiple Listing Service (MLS), Realtors wouldn't know our home was for sale.'' The Wenske's home generated lots of interest after taking these steps, but despite dozens of showings, no offers came in.
The Wenzke family soon learned the importance of pricing a home right to sell. After dropping the price, the home sold right away. ''We needed to be realistic about our home value,'' says Wenzke.
''The next steps included negotiations, dealing with a home inspection, more negotiations, and finally a closing.'' The Wenske family hired a lawyer for the contract and closing. Success!
The real estate market was at rock bottom when this family wanted to sell the Knoxville home, so they priced it low to begin with. Although it took six months, the house sold, and again by FSBO. Six months might sound like a long time, but in a down market, it wasn't so bad, especially when compared with the neighboring homes that took two to three years to sell, says Wenzke.
Ron Nolz first spoke with real estate agents when he was ready to sell his Redmond, WA, home. They told him the house wouldn't sell for more than $740,000, which sounded low to Nolz. Plus, he figured that a real estate agent would cost him about $50,000, so he decided to try FSBO. And he was very happy he did. Nolz listed his home for $765,000, but he sold it for $820,000 in only three days. And he didn't pay an agent commission.
It helped that Nolz's home was right in the shadow of Microsoft, just outside Seattle, WA, and that the market was hot. ''We had a revolving door with people through the house,'' says Nolz. ''It worked out very well.''
Although Nolz sold FSBO, he didn't sell his house totally on his own. He enlisted the help of ListingDoor.com, a service that helps homeowners sell FSBO. ListingDoor was in charge of marketing the home by putting it on major real estate sites, such as Zillow and Trulia. ''ListingDoor also sent over a professional photographer who took 25 photos of the home,'' says Nolz. Then a professional writer shared the home's unique story instead of a generic real estate description. ''ListingDoor also made some beautiful signs,'' says Nolz. ''I had one in the yard and one on the main street where a lot of Microsoft employees drive.'' The strategy worked.
Note that when you sell FSBO, and you deal with abuyer's agent, you might need to pay that agent's commission. In Nolz's case, he had two good offers: one came with a buyer's agent (who wanted a commission) and one came with no agent (and no commission to pay). Nolz chose the buyer that had no agent to avoid paying a 3 percent commission (which in this case was about $25,000!).
Chuck McGaughey sold his Corpus Christi, TX, home FSBO in three weeks, and this was in a down market. ''I had an advantage in that I could price my house between $5,000 and $10,000 below what other homes were selling for because I didn't have to pay a real estate fee [to an agent],'' says McGaughey.
McGaughey also used ListingDoor to help him sell his home, using the same strategies as Nolz did. Since he sold FSBO, he didn't pay an agent fee. But he didn't pay the buyer's agent fee, either.
''I wasn't going to pay a real estate fee, and they understood,'' says McGaughey. ''They picked up the real estate fee on the buyer's side, which was a little unusual. But because I priced the house right, it worked out.''
The bottom line for McGaughey was that he believed that he could do a better job at selling his own home than a real estate agent could. ''There's no one better to sell my house than me.''
When you sell your home FSBO, you don't have to do so without any help. You can use a service as Nolz and McGaughey did, or you can use a flat-fee listing service as Wenzke did. ''Homeowners may not be aware that they can still pay a small fee to a real estate agent to have the home listed on MLS,'' says Tal Frank, president of PhysicianLoans. ''It will still be a FSBO, but this technique greatly increases the likelihood of the home coming up in online searches any prospective homebuyer makes.''
There is still the issue of paying a commission to the buyer's agent. You can have a ''just say no'' policy, particularly if you're in a hot seller's market. But you might need to play ball with buyers' agents to get your home sold. And that usually means paying a commission, but only about half of what you'd pay if you hired an agent to sell your home. ''A FSBO seller must keep in mind that if they are not willing to pay a commission to a buyer's agent, many agents would not bring the home to a buyer's attention,'' says Frank. If your home isn't getting traffic, Frank has a suggestion: ''The homeowner can state in the listing that buyer's agents are protected and will receive a commission upon sale.''
Whether you choose to use a real estate agent or FSBO is a choice only you can make. It's good to know, however, that you do have a choice.
Real estate agents receive commissions from home buyers and sellers, collectively earning over $50 Billion per year. Learn how commission amounts are set, who pays them, and how they work in this article. Read more.
List of secured property tax rates for all counties of California fiscal year for 2014-2015. Read more.
If you live in California and are over the age of 55 you can effectively reduce your property taxes when buying a new home. Read more.
You've heard the term used before, but what does loan closing mean? Find out all you need to know about the process. Read more.
Foreign real estate investment in the United States, both commercial and residential, is a huge phenomenon that is only expected to accelerate, maybe even to skyrocket, in 2016. Read more.
Houston Vs. Dallas? If you are considering moving to either of these major metropolitan areas, we've created a resource to help you make the decision process a little easier. Read more.
Whenever there is money to be made or money to be spent, some unscrupulous folks will take advantage, trying to game the system or commit all-out fraud. Read more.
In this article, we explore how homeowners insurance works and what happens in the event of a house fire. Read more.
Your DTI is used by mortgage lenders to determine whether you qualify for a loan, and if so, for how much. Improve your DTI with these 16 tips. Read more.
A bankruptcy will make it very difficult to attain a home loan. These 5 tips will help you re-establish your credit quickly in order to qualify for a home loan. Read more.