Selling a home is an intricate business. Even most attorneys who are not real estate experts opt to hire real estate professionals. Some people, however, feel they can beat the odds and sell without the help of a Realtor.

Those in the real estate business have resources and knowledge gained through experience. Notwithstanding this, if you have decided to sell your home yourself and become a FSBO (For Sale By Owner), there are some questions you should consider to make sure you are on the right track.

Pricing

How do you determine your selling price? Perhaps you have gone to open houses and checked out the competition. How do you tell if the competition is overpriced or priced correctly? A property is overpriced if it is listed more than 3% above market value. I believe most properties today are overpriced. If this was not true, almost all listings would sell within their first few weeks on the market.

Perhaps you interviewed a number of agents, had them provide Comparative Market Analyses, and got their opinions on price before you decided to hire yourself. Will you take the highest price given? The lowest? Average them out? Take the median or the mode? Estimates of value from agents may give you some perspective, but, in the end, pricing is an art based on experience. Is your experience enough?

If your home has been on the market more than two weeks without a sale, the price needs to be reduced.  Are you willing to do that now? If not, how serious are you about selling? Overpriced properties stay on the market longer and invariably sell for less than those priced near market value.

Marketing the property

How do you gain the broadest exposure to the marketplace? Most FSBO’s put a sign on the front lawn, print up flyers and run open house ads in the newspaper. The flyers are generally distributed to nearby real estate offices. The assumption is that local agents will be interested in selling the house. There is usually an offer to pay one-half the commission. The parlance for this is “cooperating.”

Agents, however, are often leery of getting involved in FSBO transactions because they end up doing twice the work with twice the liability for one-half the real estate fee. Consequently, FSBO’s are not overwhelmed with buyer showings from agents unless it is a hot seller’s market. 

 A thought to ponder: if you agree to pay half the commission, who is representing you? The buyer’s agent is representing the buyer and you are representing yourself. How comfortable and competent do you feel about that?

If you choose to work directly only with buyers and not with agents, you have eliminated 90 to 95% of the pool of available buyers. This will radically lengthen the time it takes for your home to sell. By the way, if you do happen to find a buyer without an agent, the buyer will know you are saving on commission and will more than likely lower his offer accordingly.

Some other marketing questions to cogitate

Advertising. Where should you advertise for the best results? How often should you run ads? How should they be written? How large should the ads be? How much are you willing to spend each week? What do you say when people call? Do you know the important, qualifying questions to ask callers? 

Open houses and showings. How do you deal with open houses and showings? Are you willing and available to be  home whenever someone wants to see the property? If you limit days and times of showings, you also decrease the number of showings. Do you know how to differentiate genuine prospective buyers from those who may be coming into your home to rip you off? How do you strike the balance between allowing buyers to view your home unhindered and protecting yourself and your belongings?

Watch what you say. How do you answer those leading questions some buyers ask that can trap you later? You want to be open to answering reasonable queries or else it will appear you have something to hide. On the other hand, you also need to be careful about what you say. An example of an apparently innocent buyer’s question that could later cause you heartache is “Where’s the property line?”

Facing drawbacks. How honest and detached can you be about your home’s drawbacks? Every house has them. Can you objectively differentiate between those that relate to value and those that do not? 

Staging. What steps can you take to show your property in its most positive light, to “stage” it for selling? How much time, effort and expense are you willing to invest in order to have the home show at its best? How much is appropriate and how much would be an investment you might never recover? Do you have a team of trustworthy people to hire for sprucing up before selling? If the house is vacant, do you know whom to call for renting furniture and accessories at a reasonable price?

Fixers. How is a property that needs extensive work (a fixer) marketed? Which defects would most buyers be willing to accept? Which need to be repaired or taken off the price? Which corrections will lenders and insurance companies insist upon?

If the marketing phase goes well and you have a buyer for your home, you will now be confronted with a new series of hurdles. In part two, I will discuss handling buying and selling at the same time and negotiating the contract. Part three will cover managing and closing the escrow. 

Related Articles: Selling By Yourself, Part 2 and Part 3; Protecting Sellers; How Important Is Permit?; Not Just Termites, Part 1 and Part 2; Check Drainage; Understanding The Market; Why Expireds Expire; What is a Bedroom?; and Earthquake Country.