How Does “For Sale by Owner” Work? 5 Steps to FSBO Success
Upon hearing that the average cost to sell a house can reach tens of thousands of dollars—and that the price of hiring a REALTOR® contributes a large portion to that expense—you’re probably a little stressed. And if you’re thinking one of the best ways to reduce your total costs is to just sell the property yourself, you’re also not far from correct. Of course, a “for sale by owner” does require time and energy to get a home sold, which still creates a lot of pressure, especially if you need to sell the house fast. But if you know how a successful “for sale by owner” works (and you work hard at keeping it simple), it is possible to save money, time, and sanity.
How Does a “For Sale by Owner” Work?
Even if you haven’t been wondering how a “for sale by owner” works (or seriously considering it as an option for selling your house), you should. Here’s why. In addition to eliminating the cost of paying a real estate agent commission, you can also potentially shorten your timeline for selling. You may even be able to pare down the paperwork that has to be filed, which, in-and-of-itself, is always a hassle. And when you’re selling a house for a job relocation or because of a divorce or death in the family, the easier the process is for unloading your house, the better you’ll feel transitioning into a new life.
To help you toward that end, here are five steps you can begin taking now that may improve your chances of selling your home quickly:
Price your home competitively.
To attract the highest number of buyers in the shortest amount of time, list your home at a competitive price. You’ll first need to hire an appraiser to determine your home’s current value. Then, compare the size, style, age, and condition of your home to houses nearby that have recently sold. This will give you an idea of the final sale price you’re likely to get. Remember: the number of bedrooms and bathrooms has to match, too. These days, this information isn’t hard to find, either. Call title companies, check your local newspaper, and search online.
Prepare the property to sell.
To ensure you get offers on your house, prepare your property to be viewed—and loved—by the home buyers who visit. Declutter and clean as much as you can, hauling away trash and any furniture or accessories that are in bad shape. If you can afford to perform repairs and upgrades, plan to do those, too, since most buyers are interested in move-in ready homes. If your budget is limited, consider just painting your house before selling it and replacing a few fixtures. Just know that the more you can do, the more offers you’re likely to get.
Advertise your house to buyers.
Without a real estate agent to market your home to buyers, that responsibility will fall to you. One of the most effective methods is to list your property online with services such as Redfin and Realtor.com. You can even hire a company to create professional listings for you. For an added fee, some can post your house on agent-only sites like the Multiple Listing Service (MLS). Direct mailings, such as flyers and postcards, may help as well. Of course, you’ll want to buy ads in your local newspaper and put signs on your lawn—and throughout your neighborhood—too.
Hold an open house.
Though holding open houses can be a lot of work, it’s typically less demanding than scheduling appointments with individual buyers. And if you hold open houses on weekends when most people are free, you’ll accommodate the highest number of potential visitors. Be sure to have information on hand that includes details about your house for anyone who might be considering making an offer. Having a guest book isn’t a bad idea, either, since it allows you to follow up with visitors and answer their questions. Just don’t hold your open house alone because it’s easy to get overwhelmed. Plus, you need to be safe with so many strangers in the house.
Offer to pay your buyer’s agent.
Though you’ll save on paying a real estate agent’s fees by selling your own home, you’ll still need to compensate the agent who brings you a buyer. You’ll want to make your intentions known from the beginning, too. Otherwise, there won’t be any agents who show clients your home. This compensation is usually handled by the listing agent. But, since you won’t have one, offering some form of commission will be your responsibility.
Keep in mind, too, that every buyer’s agent is looking out for their client’s best interests in addition to their own. So, even a generous offer of several percentage points in commission won’t guarantee you’ll sell your house fast—especially if you skipped any of the steps above.
The Drawbacks of a “For Sale by Owner”
Unfortunately, there are significant downsides to selling a house yourself—which may be why “for sale by owner” transactions account for only 7% of all home sales. So, be sure to consider the drawbacks, too, before moving full-steam ahead with selling your house. For example:
- Getting the house priced right isn’t easy to do and, if you get it wrong, your home may not sell for months—or at all.
- Preparing your house to sell and then marketing it to buyers almost always takes more time, effort, and money than most homeowners can afford.
- Showing the home, whether by appointment or during weekend open houses, is often a big hassle. If you’re working full time or caring for a family, it may even be impossible.
These downsides are why, without more detailed advice on the best way to sell their homes, homeowners often end up hiring a real estate agent anyway. That doesn’t have to be you, however. In fact, you have another option that allows you to sell your house directly to a buyer, without an agent’s help or any other hassle. And this option only takes one step: a phone call.
The Right Buyer Will Handle the Work for You
Though it does help to know how a “for sale by owner” works, you may need more information about what kind of sale is best for your situation. Hiring a real estate agent might be the better option if your market favors sellers and your house will sell quickly. Then again, selling the home on your own could actually be ideal—especially when you sell to a home-buying specialist who can handle all the work. And by calling Sell Your House Direct, you can find your answers fast.
As trusted real estate advisors, we help all of our clients decide what to do based on what kind of sale will net them the most profit for their home. We provide a detailed document, called a “net sheet,” that breaks down all of the numbers so that the decision is clear and easy to make.
Since we’re also all-cash buyers who purchase homes as is, we’ll make an offer to buy your house—and close in seven days or less—as well. That means you won’t have to worry about pricing or prepping your home to sell. You won’t have to handle any marketing or hold open houses, either. All you have to do to sell your house fast is give us a call so that we can offer advice and an all-cash number. Successfully selling your home can be that simple. And with SYHD, you can get by with zero commissions or fees.