For those hoping to maximize profits on a home sale, posting a “for sale by owner” sign in the yard is an appealing option. Real estate brokers typically take 5 to 6 percent of the sale price, which could mean as much $12,000 is lost to commissions in the sale of $200,000 house.
However, saving money isn’t the only reason people decide to sell on their own. “Selling your home can be a very time-consuming process, especially when you have a broker representing the sale,” says Allen Shayanfekr, CEO of real estate investing platform Sharestates. While a broker will do much of the work, Shayanfekr says owners will find they have to coordinate schedules with their agent and work on their timeline, which some people might find inconvenient and frustrating.
Regardless of whether you want tosell your own hometo walk away with more money or retain more control over the sales process, you need to do it the right way. That may involve spending a little extra money upfront to maximize the sale price and minimize any headaches.
Have your property appraised.“In a low-inventory market like we’re seeing today, pricing your home correctly is crucial,” says Emile L’Eplattenier, real estate analyst for FitSmallBusiness.com. Normally, areal estate agentprovides a comparative market analysis to price your home appropriately. This analysis will look at the features and condition of your house and compare it to other recent sales in the area to determine the appropriate asking price.
If you don’t have an agent, you could do your own market analysis using free online resources such as Zillow and HouseCanary or by scouring local tax records for recent sales data. Some homeowners ask local agents to provide a free comparative market analysis even though they have no intention of listing their home with that broker, but paying for an appraisal may be the best way to get an accurate value while bypassing the ethical questions associated with this strategy.
When to Fire Your Real Estate Agent
If your agent isn’t returning calls or lacks knowledge, consider moving on.
Get serious about your listing.Once you know theright price for your home, it’s time to create a listing. Homeowners have options that run the gamut from posting free ads on Facebook sales groups and Craigslist to setting up a dedicated website to market the property. For a flat fee of around $400 to $500, you can have your property listed in the multiple listing service, known as MLS. This will post your home where real estate agents can easily find it. Paying for MLS inclusion can expand your potential customer base, but be aware you’ll likely need to pay a 2 to 3 percent commission to the buyer’s agent if they have one.
However, even an MLS listing may not get much attention if the photos are dark and the rooms cluttered. Clearing out the excess and improving lighting can go a long way towardmaking your home attractive to buyers. Other options would be to pay for a professional photographer or use a service like roOomy, which allows people to virtually stage their house by uploading photos of rooms, erasing old or unsightly furniture and replacing it with images of more stylish décor.
Remove emotion from the process.Homeowners undoubtedly have their favorite property features. There may be aspects of the home they love and naturally would like to emphasize. However, buyers may have other priorities, and focusing only on the things you love could be off-putting.
“The right buyer might be someone who is looking to completely redesign the property and while meeting, they might make comments that would, in a different setting, offend your taste,” Shayanfekr says. For the sales process, you need to shift your perception from selling your home to selling a house.
Approach your house sale like a professional.Removing emotion is only the first step toward selling your house like a pro. You also need to be ready to put in the time to show the house, respond to emails and calls promptly and provide thorough information.
People also need to be strategic about their marketing and take care not to share too much about defects upfront. “The ‘warts and all’ approach can and will backfire on you if your home is not priced carefully,” L’Eplattenier says. “Skilled salespeople downplay negative aspects of the home until they get their clients physically [inside] to talk them through their options.”
Go On a Relaxing Vacation While Selling Your Home
The stresses of selling a house will never completely go away, but these steps will help you enjoy your time away even with a home on the market.
Hire a real estate attorney.Between the documentation needed for the mortgage, title transfer and other legal requirements, the paperwork for home sales is extensive. “There are two common hurdles we see related to the [for sale by owner] process,” says Craig Evans, an executive with Ally Home Mortgage. “The first is the accuracy of the purchase agreement. The second is related to aligning expectations on both sides of the purchase transaction.”
Evans says both problems can be addressed by having a real estate attorney review paperwork. A handful of states, such as New York and Georgia, have laws requiring all sales, even those in which the buyer and seller have agents, be overseen by a real estate attorney. Zillow estimates the cost for one to be between $500 and $1,500.
Don’t rule out an agent.L’Eplattenier saysselling a house isn’t for everyone. Not only does it require a significant investment of time and energy, it may result in a lower sale price. In 2016, the median price of a home sold with an agent or broker was $245,000, while the median price of properties sold by the owner was $185,000, according to the National Association of Realtors. There is no hard data on whether “for sale by owner” properties are sold below market value, but L’Eplattenier says the homes that do sell this way tend to go quickly, which is an indication that they are underpriced.
For those who want to use an agent but can’t stomach paying thefull commission, a discount real estate broker may be a good choice. Redfin is one example of a company promising full service but charging only a 1.5 percent fee. However, keep in mind you’ll still need to pay the customary 2 to 3 percent to the buyer’s agent.
Going the “for sale by owner” route can result in more cash in your pocket, but you need to be smart about how you approach the sale. Spending time and money on your listing and an attorney can help ensure you get the best price possible and that the transaction goes smoothly.