FSBO (For Sale by Owner) Success: 4 Things You Need to Do, According to Experts
Planning on selling your home without the assistance of a real estate agent? Make sure these tasks are on your to-do list.
Some homeowners balk at the idea of paying thousands of dollars to a real estate agent to help them sell their home. They prefer going the FSBO (for sale by owner) route instead. And nowadays, there are several widely accessible digital tools that can make it easier to market FSBO properties. That said, even with a little assist from tech and social media, FSBO isn’t as easy as it may seem. If you do decide to go it alone, be sure to take care of these crucial steps.
Hire a Good Real Estate Attorney
You may not need a real estate agent to sell your home, but you’ll definitely want to get a real estate attorney to handle all of the legal work. “You don’t want just any attorney, you want one that specializes in real estate law,” advises Jonathan de Araujo, broker and partner of the Vantage Point Real Estate Team in Lexington, Massachusetts.
He recommends talking to a real estate attorney about the disadvantages of selling your home without representation, and also says you should find out what disclosures you’re legally required to make. “For example, there are federal laws that require you to make a disclosure regarding lead-based paint if your home was built prior to 1978,” de Araujo notes. In addition, he says a real estate attorney might be willing to advise you through the negotiation process.
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Do Your Research Before Listing Your Home
If you’re planning on selling your home without a real estate agent, you probably have some idea of how to proceed. However, de Araujo recommends researching other homes on the market first. “Go to local open houses and see how each home is being marketed,” he says. Find out if they’re using flashy brochures, providing floor plans, or including a seller’s statement of property condition.
How you present your home is as important as the home itself, so your marketing materials need to be comparable to those of other homes on the market. “At the end of the day, you’re selling a product, and that product is your home.” If you do a poor job of presenting your home, de Araujo says, buyers will view it as an inferior option.
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Seek Expert Opinions on Your Home’s Value
Even if you’re not working with a real estate agent or broker, you can get advice from these professionals—but be prepared to pay for their expertise. “For example, you can ask for a BPO, or broker price opinion, to learn the value of your home, but you should expect to pay brokers for their time.” De Araujo strongly warns against pretending that you’re thinking about selling your home with an agent just so you can get a free market analysis. “A good Realtor/broker will appreciate your honesty and could be a good point of contact in the future if you need advice during the process of selling your home.”
Overpricing is the most common FSBO error, so you’ll want expert advice to avoid what can be a costly, time-wasting mistake. “Overpriced listings lead to more days on market, which lead to buyers asking what’s wrong with the house,” de Araujo says. This, in turn, drives down the price of your home. “It sounds counterintuitive,” he says, “but in my experience, listing your house at too high a price will ultimately lead to it selling for less, more often than not.”
Get Your House Into the Local MLS
If you want success in your quest, you’ll need to get your home in the MLS (Multiple Listing Service), something a Realtor would normally handle. “If you have not paid to have your home published in the MLS, you’ll lose out on a lot of potential buyers because many agents won’t even know it’s on the market,” explains Jo Ann Bauer, a Realtor at Coldwell Banker Residential Brokerage in Scottsdale, Arizona.
You may think that using free sites like Zillow is enough, but de Araujo agrees that your home should be in the local MLS. “Buyers these days are using all sorts of different websites and tools to stay up to date on which homes are new to the market,” he explains. “Listing your home in the local MLS will syndicate your home’s listing to hundreds of home search websites and ensure that just about every buyer in the market knows about it.” For a fee, he says, you can use an “entry only” listing brokerage to have your home added to the MLS.
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Both de Araujo and Bauer warn that FSBO isn’t as easy as many homeowners assume it is. “You’re responsible for presenting the home, including photography and marketing materials, as well as running open houses, negotiation, disclosures, etc.,” de Araujo says. If you drop the ball in just one of these areas, you could negatively impact the sale of your home.
“For most FSBOs, the time and effort it takes to move from deciding to sell themselves to realizing a successful close proves to be too much, and many end up eventually listing with a real estate agent,” Bauer says.