What Does For Sale By Owner Mean
When you sell your home for sale by owner (FSBO), you’re trying to sell your home without a real estate professional assisting you. The main appeal for homeowners to consider this route for selling their home is to save some money on the listing agent commission, which can typically be about 3 percent of the sale value.
Not only will this process save you a little bit of money, but it will also give you more control over the home selling process. You will be fully in charge of deciding on your listing price, scheduling tours, disclosing issues, negotiating the sale price, and deciding on a marketing strategy. Other reasons to consider selling your home as the owner are to save time, or if you already know a potential buyer.
While some people may find those things appealing, others prefer to leave it to a professional. You will also be assuming all of the legal risks of completing the sale, so it’s important to understand all your responsibilities.
History of For Sale by Owner
According to the National Association of Realtors, 7 percent of home sales in 2020 were FSBOs. The process was once much more popular, up to 21 percent of home sales in 1985, so why the decline?
For starters, the process is not easy. There are many complicated legalities and disclosures and processes that take place when selling a home. It is also difficult for non-professionals to price a home correctly. Specifically, buyers who are looking to buy FSBOs are also expecting a lower price on the home.
Today’s technology does help sellers overcome some of these obstacles. There are many online tools that you can use in order to help you sell your home without a realtor, as well as plenty of information to help you learn proper methods and tactics.
Not so coincidentally, younger sellers are more likely to try to sell their homes by themselves. According to Zillow, 36 percent of Millenials and 26 percent of Men Xers have tried or succeeded in selling their home FSBO, whereas only 22 percent of Boomers have.
How to Sell Your Home as an Owner
The process of selling your home FSBO is very similar to that of selling your home with a realtor, except you’re in charge of all the steps instead of a professional.
Decide on your selling price – Pricing your home correctly is a very important step in the selling process. Set it too high, you run the risk of sitting on the market too long. Set it too low, and you’re obviously missing out on a profit. You can figure out a fair price by using an online real estate valuation site or running comparables in your neighborhood.
Get your home ready to be on the market – Basically, the goal here is to make your house look as good as possible so that buyers will be interested. You need to get any minor repairs handled, touch up the aesthetics, clean out all your clutter, and stage the home. Make sure you leave your personal opinions at the door and set the home up for the average buyer, not someone with specific tastes.
Market your sale – You don’t have a real estate agent, so you’re responsible for finding potential buyers. Get the word out that your house is for sale. A sign out front is the most obvious way, but you can also try magazine or newspaper advertisements, brochures, word of mouth, and online listings. Make your promotions as high quality as possible by hiring a professional photographer.
Negotiate – This is another step you’ll need to channel your inner real estate agent. You’ll be single-handedly in charge of working with buyer’s agents to come to a deal. That means listening to offers, making counteroffers, and eventually settling on terms for the sale. This involves more than just the pricing – things such as contingencies, concessions, closing dates, etc. must also be agreed upon.
Closing day – You may want to consider (or be required in some states) hiring a real estate attorney to help with the paperwork. Whether you enlist legal aid or not, make sure you understand everything that you’re signing.
Cons of For Sale By Owner
All that might sound easy, and with proper preparation and effort, you can definitely sell your home as an FSBO. However, there are some cons that come with selling a home without a professional.
For starters, you might not actually save money in the long run. Typically, houses sold by real estate agents sell for higher prices. It makes sense, they are the professionals! Even if you sell your home for a similar price as an agent might have, you will also be spending your own money on marketing the home. By the end of the day, the money you saved may balance out with the money you put into the sale.
If you’ve never sold a home before, there is a huge potential to make a mistake along the way. Selling a home is a lot of work, and there are a lot of small things that could go wrong that might affect your sale. Not to mention the legal liabilities along the way, potential scams, and time and effort you will have to put into it.
Is For Sale By Owner Right For You?
Selling your own home will definitely take more time and effort on your part, but if you manage to pull it off and sell your home for an appropriate price, you could save yourself thousands of dollars in the long run.
If you are interested in selling your home as an owner then you should contact Property Pals USA to receive a fair cash offer for your home.