Not A Sure Thing
Selling a house comes with some big fees, most notably a listing agent’s commission, which can easily run in the tens of thousands of dollars. It’s no wonder some homeowners want to market and sell their homes on their own! But the for-sale-by-owner (FSBO) route is more complex than many are prepared to tackle. Keep reading to discover the most common mistakes homeowners make when trying to sell a property without an agent—so you can avoid them and have a more successful experience.
Before attempting to sell your home solo, be aware that FSBO homes typically bring less profit to the seller than homes that are listed and sold by a real estate agent, because those pros have a larger network, better advertising, and a stronger sense of market value. The National Association of Realtors (NAR) claims that not only do FSBO houses sell for less than similar homes, they can also remain on the market for a longer time before they sell.
Hanging a Subpar FSBO Sign
Buying a flimsy, plastic For Sale by Owner sign from your local hardware store and planting it in your front yard screams cheap and tacky. If you’re going to sell your home by yourself, consider having a professional sign company create a yard sign for you that looks impressive and is sturdy enough to stand up to the elements.
Succumbing to Sentimental High Pricing
We get it: You’ve lived in your home for many years and it holds a special fondness for your family. No one will pay for your good memories, however, and if you price your house too high, potential buyers won’t even look. Your best bet is to hire a certified home appraiser to inspect the house and determine what it’s really worth. Appraisers factor in such things as square footage, amenities, the home’s age, and current market trends to determine its value. Find one through the American Society of Appraisers (find-an-appraiser).
Undervaluing Your House
The flip side to an unrealistic high price is a too-low figure, which some sellers set because they think it will attract multiple buyers and lead to a quick sale. If you lowball your abode, get an offer, and sign a contract, you’ll be obligated to abide by that price even if you later find out you could have gotten $50,000 more. This is another reason to hire a certified home appraiser when determining an asking price.
If you list with a brokerage, your agent will advise you on how to make your home look its best, outdoors and in—and may even help you enlist the assistance a staging professional to “do” your interior in a way appealing to today’s buyers. Without a pro’s input, just be sure to keep your house tidy. If you’re slack about curb appeal, house-hunters will drive on by. Inside, conditions you’ve become accustomed to—smudged windows, everyday clutter, family photos—could be a distraction or even a total turnoff. Bottom line: You can impress if your place is a mess, so commit to a spotless appearance, from the front lawn, through every room, and all the way to the back fence.
If a potential buyer makes a lowball offer, don’t be afraid to counter back with a higher price. And keep in mind, other factors beyond price are negotiable, including the earnest money (the amount a buyer puts down when making an offer to show good faith), the closing date (when the deal is final and you hand over the keys), and things like whether the appliances will stay with the house. If your negotiation skills aren’t up to snuff, savvy buyers can take advantage of you.
Failing to Disclose
When a real estate agent lists a house, the homeowner must fill out a seller’s disclosure form that lists every material defect known to the seller. You can obtain a generic disclosure form online, or a banker can often supply one. If you fail to disclose something such as the fact the basement was once flooded or the house has termite damage, you risk putting the contract in jeopardy or, worse, you could get sued by the buyer after the deal closes.
Exaggerating in Your Listing
Be scrupulously factual when describing your house for an online or newspaper listing. If your description is not 100 percent accurate—claiming, for instance, a living space of 2,600 square feet when it’s only 2,300 square feet—the buyer can sue for misrepresentation after the deal closes. Real estate agents carry errors and omissions (E&O) insurance that covers such mistakes, but these policies are not available to homeowners. If you have a certified appraisal done, use the appraiser’s figures and description in your listing.
Selling a house involves a number of legal documents from lenders, appraisers, title insurance agents, and inspectors. If the proper forms are not completed correctly, it could blow the deal. If you’re not using a real estate agent, consider asking your banker to help oversee the paperwork process.
Not Researching the Buyer
Before an agent shows a house to prospective buyers, she researches their income, their credit rating, and their purchase budget. She’ll also request that the buyers get preapproved by their lender. Owners of FSBOs rarely take the time to research buyers in-depth, so they’re more likely to end up showing people through the house who can’t get mortgage approval.
Skipping the MLS
Most real estate agencies belong to a local multi-list service (MLS) that allows agents from all agencies to show and sell the listings of other agents. This is the single most valuable tool in matching the right buyer to the right house, and many multi-lists will allow homeowners to list FSBO homes in their printed MLS pamphlets for a fee ranging from $100 to $400, or more per month, depending on the number of words in the listing and whether you include a photo.
Posting Unprofessional Photos
If you’re not a great photographer, consider hiring a professional to take photos of your home before posting them online. Potential buyers are drawn to both interior and exterior photos, and amateurish snapshots could cause them to scroll past your listing to one that has enticing photos.If you’re not a great photographer, consider hiring a pro to take pictures of your home before posting them online. Potential buyers are drawn to both interior and exterior photos, and amateurish snapshots could cause them to scroll past your listing to one that has more enticing visuals.
Showing on Your Schedule
Buyers prefer to shop at times convenient to them—and won’t want to work around you. If you have a fulltime job or other demanding obligations, you might not be able to drop everything whenever a potential buyer wants to see the house. This is where real estate agents have a distinct advantage because they are available to show houses any time of the day.
Buyers typically feel free to voice concerns and ask questions of real estate agents during a showing, but they’re not always comfortable mentioning things such as funny smells or stained carpeting to the homeowner. This reduces vital communication and feedback that could otherwise help you on future showings. You can encourage potential buyers to be brutally honest, but don’t be surprised if they’re not.
Saying Too Much
Buyers are looking for clues as to how to get the best deal. If you share personal information, such as a need to sell the house quickly or the fact that you’ve been trying unsuccessfully to sell it for months, the buyers are apt to make a low-ball offer. Avoid telling the buyers about your motivation to sell. If they ask why you’re selling such a wonderful home, say, “We love this house and we’ll miss it, but it’s time for us to make a change.”
Being Slack About Security
Unfortunately, FSBOs are common targets for scam artists and thieves, who may request a showing in the hopes of raiding your medicine cabinet or scoping out your home to see what valuables you have. A good course of action is to ask the person to text you a photo of their driver’s license, and make sure prescriptions and valuables are out of sight before you show your house.
You work hard for your money, so keep more of it in your pocket! Sign up for the Two Cents newsletter to receive money-saving advice delivered right to your inbox.