Saving on real estate agent commission fees is a great motivator for many sellers to want to sell their houses independently.
They bill a percentage of the selling price, so the higher the expected settlement, the more you stand to gain from the transaction by removing the middleman.
The for Sale by Owner (FSOB) process is tedious and technical, which is why most sellers engage licensed real estate agents to oversee the transaction on their behalf.
You risk losing the perceived gains if you make the wrong moves, flushing all the effort down the drain.
You need to have a current market feel coupled with excellent presentation and negotiation skills to operate at par with the real estate agents you will inevitably be dealing with.
All these attributes will do you no good if you don’t understand the process and what to do at each stage.
This article will take you through the steps of selling a house so you can know what it takes and how to go about it without a real estate professional.
Please note that we are not offering legal advice but rather guidelines on the process under the existing regulations. We suggest you consult a real estate attorney for any other questions.
Yes! When you choose to be an FSBO seller, you can sell your home without a real estate professional or real estate license and avoid having to pay a real estate commission fee.
This real estate commission fee in Colorado averages around 5.50%.
When selling FSBO, determine market value. Regarding closing costs when selling FSBO, buyers and sellers will pay a portion, but you can negotiate this.
Many FSBO home sellers will list their house for the price they think it is worth as opposed to the prevailing market value.
They also try to load the sale expenses in there and end up asking higher due to attachment and emotional investment.
If your house’s listing price is too high, it will sit in the market forever. The longer it sits in the market, the more likely people will start to think that the house has a problem.
Look for a comparative market analysis (CMA) report of the neighborhood. Real estate agents and brokers create these reports to help sellers set listing prices, and buyers make competitive offers.
You can use them to estimate what your house is worth compared to other houses in the area.
CMAs are free and can be done by any real estate agent. Call up several realtors in your area and ask them for reports on comparable homes in the area.
It is good to compare different CMAs to get an unbiased feel of the ground. Realtors will easily oblige because they hope you will eventually change your mind and engage them for the home sale.
Get the FSBO home in its best shape so it is ready to sell at the purchase price and show during an open house. You might have to sacrifice your free time and your weekends.
Pull weeds in the yard, fill holes on the walls, and paint the house if needed, removing all the eyesores from the real estate property that might bother an interested buyer.
It is perfectly normal to miss a few glaring anomalies because you have grown used to them over the years. Get a friend and have them walk through your house with a notepad, jotting down any eyesores they notice.
They will be better placed to identify all the things home viewers will find negative about the house.
You don’t need to go all out and spend a lot of money, but rather fix the immediate things people will notice when they walk into the house.
Remove personalized decorations from the house like family portraits; this allows potential home buyers to envision themselves living in the home.
Clear clutter and remove things from the counters to open up the space. Brighten the rooms as much as possible; turn on the lights and pull back the shades. Dark spaces feel small and confined.
Don’t skimp on photography. Avoid the urge to use your cellphone to take photos. Grainy and dull photos won’t do the house any justice. We recommend that you hire a professional. They will charge between $300 to $400, and the result is worth it.
Get the house to as many listing websites as possible so that the information is available in the market. You can have it listed in the local papers on Zillow, Craigslist, Facebook, Instagram, and other relevant platforms.
Start by combing through these websites to get an idea of what people are saying about their houses so you can come up with an appealing description for your property. Highlight the unique things that set your house apart from the rest and ensure they are well captured.
Ensure your contacts are a part of the description so that they are clearly visible, so people know how to get a hold of you. You don’t want this critical information to be overshadowed by paid ads.
Make sure realtors know you are willing to work with them as much as you are not using a realtor yourself. Realtors view FSBO sellers as unrealistic, unreasonable and difficult because a number of them have been burned by sellers who fail to honor their agreed commissions.
Both the buyer’s and seller’s realtors are paid from the proceeds of the sale, so the seller foots the bill.
More than 90% of your prospective buyers will be using realtors. They may be dissuaded from exploring your listing even if your house is perfect for them if their realtor feels there is nothing for them in the transaction. You can offer between two and three percent of the selling price.
You will start getting phone calls from realtors, including those who furnished you with the CMAs, as soon as the listing goes up. They will be hoping that they can list your home so that they can earn a commission.
They might break you and convince you that you cannot see the deal through, but if your mind is made up, you can politely decline their offers and tell them you will get in touch if it becomes too much.
Eventually, you will get phone calls from people who want to show your house to their clients. You should schedule a time for meeting with them within 24 hours because there is a high possibility that they will move on to an alternative house if the period before viewing is too long.
It is good practice not to be there for the showing as the homeowner. The prospective buyers will feel more comfortable in your absence as they want to explore the house without feeling like they are intruding or like they are being judged.
Keep the house clean and presentable at all times during this period. The same realtors might be showing it to different buyers, and you want them to experience consistency.
When a potential buyer comes twice or more to see the house, it indicates an offer is in the offing. You will start getting emails from realtors with offers in them. They typically contain the purchase price and any other concessions the buyer(s) feel should be included in the deal.
You can accept, decline or counter the offer at this point. It is advisable to counter the initial offer just to be sure you are not leaving any money on the table. It is usually just a starting point, and it will take two or three counter offers to get to where both parties are comfortable.
Once all the kinks have been ironed out, you will execute a purchase and sale agreement which contains the purchase price and any other related agreement.
The signed purchase and sale agreement is sent over to the title company, the lender or any other party that requires it to aid in the transaction
The buyer schedules an inspection with a property inspector within ten business days after the agreement. The inspector will inspect the property with a fine toothpick, preferably in your absence.
They will assess the status of the plumbing and electricals, whether the roof is holding up, if the foundation is well settled, and adherence to codes, among other parameters. The buyer needs to ascertain the condition of the house from a professional. Be prepared for the inspector to recommend a few fixes here and there, which the buyer will bring up.
Around this time, the lender will also order an appraisal to confirm if the house is actually worth the amount of cash that they are loaning the home buyer.
Inspection and appraisal expenses are covered by the buyer but will still affect you because the inspector and appraiser have to visit the property, and you need to schedule their time and grant them access to the property
The buyer should be able to take care of all the title work for you through their agent. The title company facilitates the deal’s transaction and the fund transfer between the involved parties. They ensure everything is well recorded, and the documentation is well-executed, including the signing of the deed to the property.
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