What’s 6% of $400,000? $24,000. What can you do with $24,000? A whole lot.
But you know this already. This was the exact formula you used to calculate the amount of savings you’d enjoy selling ‘for sale by owner’. We’re willing to bet you put less time into considering the actual process because who wants to focus on the negatives, right?
Despite that, we do believe its entirely possible to successfully sell your home without the help of an agent if you take the time to prepare yourself. That means considering every aspect of the process—your pricing, marketing, scheduling, followup and mindset need to be informed and efficient to avoid headaches.
So, how would an agent approach the sale of your home?
The Sale Price and Current Market Analysis (CMA)
First, consider the urgency, if any, behind the sale of your home. If you’d like to sell within:
1 month: set price below market
3 months: set price at or slightly above market
6 months to 1 year: set price reasonably above market
Then, arrive at your ideal list price by considering two factors: recently sold comparables and the current market. Real estate agents call this process a Current Market Analysis or CMA.
What are comparables?
A comparable is a property similar in condition, sq. footage, appearance, and features to your home. To get an accurate snapshot of your homes true value:
Search for homes sold within the last 6 months (or 1 year if no recent sales).
Search for homes within a mile radius of your property.
Zillow provides a database of recently sold homes here.
What kind of market am I in?
Seller’s Market: this type of market is identified by low home inventory and a high presence of buyers. In this case, the seller holds the leverage. Your home is one of a few on the market meaning you can be a little more liberal when pricing your home. Buyers are hungry and you have what they want.
Buyer’s Market: this type of market is identified by high inventory and a low presence of buyers. In this case, the buyer holds the leverage. Your home is one of many on the market meaning buyers have options. They’ll be less likely to consider homes priced too far over market price because they know they’ll find a similar property for less.
Zillow’s Zestimate can guide the pricing of your home, but beware of its flaws. Another way to obtain a CMA is to ask a real estate agent. Most will oblige for free because they want to be first in line if you do decide to list with an agent in the future. You’ll save the headache of formulas and time consuming analysis.
Your next step will be deciding how to expose your property to buyers. There are many websites that provide marketing resources to FSBO’s. Some of them will even place your property on the Multiple Listing Service (MLS); the database used by real estate agents. Here are 3 of the most popular:
Zillow.com : arguably the biggest direct-to-consumer database for homes. Zillow is often the go to when buyers search for a home. Through Zillow, your home will also be featured on Trulia.
ForSaleByOwner.com : they offer a step-by-step process for listing and many other resources like legal advice.
Owners.com : they offer flat-fee services and listing resources
Consider having a photographer take professional photos of your home to ensure your property catches attention. Before that, however, make sure you prepare the inside/outside of your home for sale. You don’t want to turn off any prospective buyers.
Communicating and Scheduling
The Annoying Phone Calls
You will be receiving phone calls from numerous people interested in your home. However, they won’t all be buyers; some will be agents hoping to persuade you to list with them. This tends to be the most frustrating aspect of the process for most homeowners.
It’s important to answer the phone no matter who is calling you. Don’t be afraid to tell an agent you’re unwilling to list for monetary reasons, they already know and understand this before calling you. By choosing to ignore phone calls you fall into a habit that makes you hard to reach and keeps your home from selling quicker than it could.
1 out of the many people that call you within an hour could be a serious buyer. How do you filter the rest?
Consider setting up a Google Voice number. It’s a service provided by google that assigns you a phone number that forwards to your cell phone with voicemail services and caller ID. When you finish selling your home, disconnect from google voice and voila the calls will cease.
The longer your property remains on the market the less willing you’ll be to accommodate a buyers request to tour your home. Between scheduling, ensuring you’re available and determining the buyer’s seriousness it’s easy to become frustrated. It’s important to remain level headed and consistent if you want your home to sell within your timeframe.
When a buyer calls you to schedule a showing:
Ask them some pre-qualifying questions like ‘how long have you been searching?’ or ‘are you buying cash or financing?’. Depending on their answers, you’ll get a good understanding as to their level of interest in the home.
Find a reasonable time that works for you and the buyer. Don’t limit your showings to a one hour timeframe one day out of the week. Everyone has a busy schedule and buyers are no different.
If you’re not a lawyer, don’t handle the paperwork. There are numerous mistakes you can make along the process that could place you or the buyer in a legal position neither of you want to be in.
Contact a local title agency or real estate lawyer to have them review your contracts and facilitate the closing.
Why would I need an agent?
Homeowners assume the responsibility of selling their own home because they imagine the process to be straightforward and relatively easy. What they fail to realize is selling a home is a full-time job. Real estate agents get paid a high commission because they earn it. Their expertise and familiarity with the process help the homeowner avoid the headaches and stay out of legal trouble.
Before selling your property without an agent, ask yourself, ’Do I have the necessary patience, diligence, and time to successfully handle the sale?’. If your answer is no, consider working with an agent. Your blood pressure will thank you.