Understanding how to sell your own home “by owner” without using a Realtor will not only help you succeed but save your thousands in commission fees. Here are the detailed steps of how to get the job done.
To understand how to sell your own home without a realtor you need to explore the most basic home selling equation. A real estate transaction always consists of a buyer and a seller. A seller wants to sell for the most amount of money in the least amount of time, while the buyer is looking to find the right home for the best price.
If you agree with the above equation, you should immediately realize that neither the buyer nor seller are ever intrinsically motivated to use a real estate agent. Selling your own home, without an agent, leaves so much more money on the table, so why is everyone not doing it? The simple answer is lack of understanding of the "for sale by owner" process.
Although, selling on your own home may seem like a monumental challenge, keep in mind that thousands of people do it every single day. In fact, over 10% of homes sell without an intermediary. Once you understand the for sale by owner process, it is quite simple. You require a basic strategy, and that is exactly what we are going to show you.
Step 1: Prepare the home for sale
Step 2: Price your home
Step 3: Market your home for sale
Step 4: Show your home to buyers
Step 5: Negotiate your sale and close the deal
The number one reason to sell "for sale by owner" is to save money and preserve your equity! Remember that real estate commission fees are not based on your equity but your final sale price.
So, let's assume you use an agent who charges 5% to sell your home for $500k. Assume you have a mortgage of $400k. Upon sale you have $500k (sale price) - $400 (mortgage) = $100k (left in equity).
The 5% commission you will pay is based on the $500k selling price, which equates to $25k. This amount will be deducted from your $100k equity, leaving you with $75k. This means that you will spend 25% of your equity on real estate commission fees!
Here are a few more reasons why selling your own home makes sense:
Regardless of how you choose to sell your home, this step is of the greatest importance and one that every homeowner must do. Your goal is to perform improvements that yield the greatest return on your investment (ROI). Avoid major construction or renovation projects and stick to basic cosmetic improvements.
Clean, declutter, repair, and obtain estimates. Cleaning and decluttering represent the greatest ROI as it requires nothing more than simple sweat equity. Repair only the cosmetic or most noticeable items in your home and obtain several estimates for any major deficiencies that you may be aware of.
Clean all vertical and horizontal surfaces in your home, including appliances and cupboards. Steam clean carpets, wax and shine all hard floor surfaces. Wash your windows and take the time to manicure your lawn and gardens.
Declutter, open-up the space in your home. Remove bulky appliances and nick knacks from kitchen and bathroom countertops. Rearrange bulky furniture to make more space or store in basement/garage. Remove fridge magnets and minimize personal memorabilia.
Repair the obvious, such as leaky taps or broken kitchen hardware, lubricate noisy doors, replace burnt out light bulbs. Paint away! The best bang for your buck is a freshly painted home. Don't forget about the baseboards, and most importantly your front door. This is the first thing your buyer will see!
Obtain estimates for major items that may be deficient. This includes roofing shingles, leaking windows and broken doors. Such items may later be revealed in a home inspection report. Take the time now to obtain several best estimates and avoid future frustrations.
You must get this step right! Setting your price too low will equate to money lost, set it too high and you will inevitably fail. There are three ways to accomplish this step.
Use the internet yourself to find some comparable homes for sale. Look for homes in your immediate area that are most comparable to yours in square footage, lot size, layout, and upgrades.
Call up a few real estate agents, ask them for a comparative market analysis (CMA). Most agents will be happy to provide you with such reports free of charge, as it gives them a chance to pitch their services. This is also a great way to have a "Plan B", in case things don't work out with your "for sale by owner" sale.
Hire a certified appraiser. You will be able to find many local appraisers online, you may also ask your insurance or mortgage broker if they can recommend someone. Be sure to tell your appraiser that the appraisal is for selling purposes, not for lending or insurance. Lending appraisals tend to be higher while insurance appraisals are much more conservative in value.
This article is written by TradeCasa, a leading marketing company in for sale by owner sales. Here we may be a little biased, but you can be the judge. If you are already convinced that selling your own home is the way to go, check out TradeCasa's for sale by owner packages and get started.
If you are still considering other alternatives, there are numerous "for sale by owner" online marketing platforms to help you sell your own home.
Zillow or Trulia, offer free listing services to for sale by owners. The online visibility is great, however, there is a major catch. Your listing inquires are forwarded to local buyer's agents; agents bid on your listing to appear as the primary contact for your sale. Most inquires generated come from agents, not buyers, and nine times out of ten you will have to pay a partial commission to sell your home.
Other companies, whose names we choose not to disclose, take a sneakier approach. We caution to avoid any so called "FSBO" marketing sites that offer MLS services. MLS is a commission-based model, requiring you to disclose a buyer's agency commission, resulting in thousands of dollars in unexpected fees. If you wish to go the MLS route, hire an agent at full service, going the middle ground is never a favourable formula. Such companies will often offer free listing options with the agenda of getting you into an MLS contract shortly after listing. You will end up doing all the work with little financial reward in the end!
TradeCasa.com advertises your sale to thousands of exclusive buyers daily, hosting a massive global presence across North America. Unlike all other FSBO realty sites, we do not forward your listing inquiries to agents or promote commission-based services like MLS, which result in thousands of dollars in fees. TradeCasa.com has the highest "For Sale By Owner" industry success rate in the country, over 12,000 sales to date without a dime in commissions!
If you are serious about selling your own home, consider TradeCasa a part of your marketing plan. If you are still on the fence, we invite you to create a basic listing free of charge, no strings attached. Our premium listing options are one low flat fee offering some of the best tools and marketing in the FSBO industry.
Showing your own home can be the most time-consuming part of your sale. With every showing it is critical that you clean and prepare your home to make a positive impression. We encourage you to do regular open houses, as it allows you to clean your home once and show it to many in one day.
To prepare for your showings, here are some important things you should know.
Clean your home, make sure that it shows at its best. Turn on all the lights, open all the blinds to let the natural light in, and ensure the property is free from unpleasant smells.
Take care of your pets, larger animals such as dogs may be intimidating to your prospects, while cats or other smaller pets can signal allergies.
Put your valuables away, such as jewelry or smaller valuable items. As the old saying goes, out of sight out of mind.
Provide a feature sheet, of the property only after the completed the tour. Allow your prospects to focus on the walk through, rather than be distracted with a hand-out.
Use a sign in sheet, collect relevant information about your prospect. This will allow you to follow up with your potential buyer later.
Give them a guided tour, be sure to point out all the features that you enjoyed, recent upgrades and inclusions. Open closets as you walk through, some buyers may be intimidated to do so.
Let them look around on their own once you give them the tour. Allow your potential buyer to have a better look at the property. The longer they stay, the more interested they become.
This is by far the most rewarding and simple step in selling your own home! Before you begin this step, it is wise to hire a real estate lawyer. Regardless of how you sell your home, a real estate lawyer plays a critical resource in the home selling process and in many parts of the country is necessary to close your deal.
There are typically four key items to negotiate before you can prepare a formal real estate contract. Your lawyer will also guide you on what they require.
Most contracts are conditional. Below are the two most common conditions. When in doubt, always consult with your real estate lawyer.
Now it is time to put all of this together and turn it into a binding contractual agreement. This is where you will now require your lawyer's involvement. Your lawyer will draft the final contract based on the information that you and your purchaser have negotiated and provided.
TradeCasa makes this process simple, by providing a "negotiation contract tool". This tool allows you and your buyer to negotiate, collect and deliver all the information necessary for a lawyer to draft a formal sales contract.
If you follow these steps carefully, you will succeed in the for sale by owner process! Not everyone succeeds, but then again, not every agent does either. Perhaps the best reason to try selling by owner is that there is absolutely nothing to lose and everything to gain! You always have the option to use a realtor if things do not work out, and the payout is extraordinary when you succeed.
Using the marketing services of a company like TradeCasa will make the for sale by owner journey successful and pleasant. Our turnkey marketing options will provide you with all the tools, resources, and online visibility to make this dream a reality. We invite you to take the next step and view our for sale by owner packages.