There are a lot of reasons why you would want to sell your home “for sale by owner” (FSBO).
You want to save on commission, not have to deal with a real estate agent, and do things your way.
Despite being a real estate agent, I’m going to give you the inside scoop on how to not hire me and successfully sell a property on your own. It sounds counterintuitive, but whatever.
Below, you’ll see the steps we’ll go over.
- What it takes to sell “FSBO”.
- Getting your home ready for sale.
- How to get photography for your home.
- Setting a price that will sell.
- How to market your home effectively.
- How to deal with incoming offers and negotiate.
- Close.
Let’s dive in.
1. What It Takes to Sell “FSBO”
Selling a home on your own is not easy. In fact, over 90% of FSBOs will fail.
But should you be deterred?
I recommend you read my article on the pros and cons of selling for sale by owner to answer that for yourself.
Overall, selling a home on your own won’t save much in professional fees (if at all), cause stress and confusion, and attract a lot of bargain buyers who are good at sending low-ball offers.
However, despite the challenges, there are FSBOs who have succeeded.
This article is meant to address the primary model you should be using to set yourself up for success. I won’t guarantee a sale, but I will guarantee that you’ll be better informed and equipped at the end than you would otherwise.
2. Get Your Home Ready for Sale
Tidying up around the house and making any necessary repairs is always the first part of any home sale.
Whether you intend to remodel the home in order to raise the price, throw a fresh coat of paint on the wall, or repair a leaky faucet; doing your due diligence before going to market is a requirement.
Because you’re selling by yourself, you must be near perfect in order to succeed.
Here’s a quick checklist that you should follow for pre-listing maintenance:
- Clean – Make sure everything is scrubbed and kept. Wash the windows, shampoo the carpets, wax the floors, etc.
- Landscape – Curb appeal is important. The exterior of your home is the first impression for buyers. Hire a professional landscaping service or keep up with it on your own.
- Keep Your Valuables Safe – Don’t have any valuables or personal information left out in your home. Theft during showings happen.
- Declutter – Remove photos from the wall and keep knickknacks in storage. You don’t want to throw too much at your buyers at once. Let them envision the home as if they owned it.
- Staging – It might be worthwhile to hire a professional staging service to make your home look awesome. Read more about staging here.
An important note to mention—if you’re home is in utter disarray and you want to sell as-is, then I will 100% recommend you consult a real estate agent to help you. Especially if you expect to get most of your equity back.
Selling a home as-is will require a serious evaluation of pricing, a solid marketing strategy, and negotiation skills that can fight off the horrid low-ball offers that bargain buyers will send your way.
3. How to Get Photography for Your Home
Do NOT take a couple of photos with your iPhone and call it a day.
Here’s the deal. Real estate markets are the epitome of capitalism. It’s all about competition.
If you have over 90% of the real estate market being handled by agents who will not list a home unless the seller agrees to get professional photography. Then how do you expect to sell your home with poorly lit iPhone photos of the backyard, living room, and bathroom?
A buyer on average will preview ten homes before buying one.
Not only is it hard to sell to a buyer because you’re competing with all the other homes on the market, but it’s even harder to get them in the door!
The best and easiest way to at least attract buyers is through professional photography.
This doesn’t have to be hard. All you need to do is make a quick Google search for photographers in your area and hire one.
Pricing will differ, especially depending on where you live, but you can expect an average of $200 for a full photoshoot in the United States.
4. Setting a Price That Will Sell
Pricing a home takes a lot of research and effort in order to do it right. For luxury homes, I have a pricing strategy that differs from the average agent.
But for the sake of this article, we’re going to use a pricing strategy that would be used for general sales.
Get Comparable Data
You might think “my home is worth $300,000. I’m going to price it that way”.
I’m sorry to let you know that the perceived value of a home means absolutely nothing.
Here’s why:
The real estate market is like the stock market. Values constantly change, fluctuations in trends alter the entire market’s trajectory, and some stocks are favored over others.
The intrinsic value of your home is more or less a benchmark than it is an actionable price.
Pricing is based on the market and what it wants.
To understand what the market wants, you have to look at other homes that have sold or are currently for sale in your area; that are built the same or have the same features as yours.
You take the data from those homes and evaluate their pricing. The goal is to look for a path that can earn you the most money while still remaining competitive.
Real estate agents have fancy tools to collect and process this data, but you aren’t a real estate agent.
Therefore, I’m going to break down exactly how you can price your home using just Zillow to get comparable sales data.
The Zillow Comp Method
Type in “zillow.com” in your search bar and get to the home page.
Now, navigate to the “Sell” tab and select “home values”. (It might say your city’s name).
Once on the page, make sure you type in your market’s name so that you can get values that matter to you.
Scroll down to the second graph and take note of the median list price and median sales price.
If we evaluate my market, you’ll notice a $43,700 discrepancy between the listing price and the sales price.
This indicates that we’re in a slower market and buyers aren’t jumping at any sale. This is also called a “buyer’s market”.
If you happen to live in a buyer’s market and you’re selling FSBO, then you’re going to have an exceptionally difficult time.
If you’re in a balanced market or a seller’s market, then it will be a little bit easier.
Once you’ve taken in all the necessary market information, it’s time to zoom in for physical data.
Go to the “Buy” tab up top and select “Recent home sales”.
Now you’ll see a map of your city and all the recent home sales. Start using the filters to narrow down so that you’ll only see homes that have the same qualities as yours.
Make sure you’re filtering by price range, bed/bath, and any other features that you can list.
After that, you should have a small number of homes to work with. Zoom in on your local neighborhood and look at what’s sold recently.
Do any of the properties look like yours? When did they sell? For how much? Do you see a trend?
Setting the Price
List the homes that resemble yours and their prices on a spreadsheet or on paper.
Think about what your home has to offer, and without overdoing it, pick a price somewhere in between the highest-priced sale and the lowest priced sale.
Because you’re selling FSBO, you have a very small window (about three weeks) before you start getting hit with “days on market attrition”.
You’ll want to price lower so that you can get buyers in the door faster, provoke a sale, and get everything over with.
The longer your home sits on the market, the less money you make.
Very little time has to go by before hiring a real estate agent would have saved you more money in the long run.
5. How to Market Your Home Effectively
Marketing is a major field of study with tons of moving parts. Real estate marketing is no different.
While most real estate agents often go for a traditional marketing approach, Berri Properties takes a digital approach, which allows us to expose homes to thousands of eyes quicker and more efficiently than our competitors.
But as a FSBO, you don’t have an established marketing plan or the research in place to make good decisions, the instruction of trial and error, and a dedicated marketing budget.
What you do have is an experienced marketer (me) telling you exactly how you can market your home on a shoestring budget and get the most exposure possible in the shortest amount of time.
Before we begin, check out my 6 marketing tips for 2020.
The Big Three
As a FSBO, you’ll want to focus on three major marketing channels:
- Zillow
- Videos
Zillow Marketing
Zillow is your best friend when you’re on your own.
They’re the ones who will list your home in this scenario (you could also pay money to your local MLS to list, although they all vary).
To list your home on Zillow, all you have to do is go to the home page, navigate to the “Sell” tab, and select “Post For Sale By Owner”.
Simply fill in all the information about your home. Make sure all your tax data is correct.
The easiest way to find your tax data is to type into Google “[your county] GIS map”.
Upload your professional photos to Zillow, list at the price you came up with, and you’re all set.
The mistake most FSBOs make is that they stop here. They think they’ve finished the marketing part and now they just need to wait.
One of the reasons why people don’t like real estate agents is because they are said to “put a sign in the yard and wait for a phone call”.
Listing on Zillow and stopping there is literally the same thing. You’re a real estate agent now. Do the right thing.
Utilize Facebook
I’m talking about more than just posting your listing to your feed once and never doing it again.
I’m more alluding to Facebook Ads.
Berri Properties uses Facebook Ads for home exposure, and it works well.
Those numbers are tests we ran for just two days. We were looking to see what ad sets could create the most exposure the fastest.
While Facebook Ads is a diverse and complicated subject that you’re going to want to read up on. We’re going to talk about what you can do to get started now.
The first step is to make a Facebook page for your home. Go to the Facebook homepage and select “Create” in the right-hand corner.
Then, click “Page” from the dropdown box.
On the next screen, you’ll want to choose “Community or Public Figure”.
Name the page as your home address and then make the category “Residence”.
Fill in whatever requirements they ask you for. You’ll then wind up on a page that looks like this:
Now is the time to create a listing post.
Take some of the pictures you received from your photographer and make an image-based post.
Add the description of the property, the price, and a call to action like “Contact Us Today!”
Once it’s posted, you’ll see a button that says, “Boost Post”.
Due to Facebook’s new rules about fair advertising, you’ll need to check the box for “Special Ad Category” and select “Housing”.
Set a budget and the amount of days you want to run the ad. Then simply hit “Boost” in the bottom right corner.
Remember that Facebook Ads are a matter of trial and error. There’s no one perfect way to do them.
But I’ll let you know this—spending a few bucks on social media ads is well beyond what most FSBOs and even Realtors are doing.
Video Marketing
Marketers are selecting video as their preferred form of content. It has engagement rates up to 1200% more than image and text-based content.
You’ve probably even started to see some of the more advanced real estate agents using video in their marketing campaigns. This should be a sign to you.
Your goal as a FSBO is to compete with the market. Selling your home is a very serious and arduous task.
You need to bring you’re A-Game, and that means pulling out the camera for some video clips.
You don’t need to go spending tons of money on a DSLR camera or hire a videographer. All you need is just a smartphone camera and good lighting.
A simple walkthrough of your home can be a great way to capture more engagement for your listing. It’s even better if you have a glowing personality that is happy to be in front of a camera and give your viewers a tour.
Once you’re done filming, you can easily drop your footage into Magisto using their free trial. This will help you make professional-looking videos and really make an impression on your audience.
If you boost the video on your Facebook page, you’ll see engagement triple the results of your image-based ad.
You just can’t go wrong with video marketing.
6. How to Deal with Incoming Offers and Negotiate
Acting like a real estate agent becomes even more important in this stage. Whenever offers come your way, it’s important to remain calm and collected. Don’t blindly jump at every opportunity.
Truly evaluate what the offer entails and whether it’s a good deal for you.
Some things to keep in mind:
- Answer Calls – You’ll be called by a lot of real estate agents asking if they can list your home or preview it. What you do with that is up to you but be considerate. You’ll need to answer all of your phone calls because you don’t want to ignore a potential buyer, thinking they were an agent.
- Be Flexible in Your Schedule – If you want to sell your house, you have to be willing to sell it. By being flexible about showings, you’re letting buyers know that you’re willing to work with them.
- Feedback is King – Feedback is important. It lets you know what the market thinks about your home. Take it seriously and make adjustments in accordance.
- Do Not Let Your Home Sit – Days on market attrition is real. The longer your home sits, the less likely you are to sell, let alone get the price that you want. If your home isn’t selling within a month, it’s time to hire a Realtor.
- Request Mortgage Preapproval Letters with Every Offer – This should prevent unqualified buyers from wasting your time. By getting a preapproval letter, you know that the buyers are serious and won’t have to pull out of the contract due to financing issues.
- Work with the Buyer’s Agent – Every buyer is going to have an agent because they’re free to work with. This means you’ll need to speak with and pay a real estate agent at some point. Be fair with your commission offering and give 2%-3% of the sales price. There’s really no way around this.
Once you get an offer, there’s always an expiration date included. Most often, between 24-48 hours after the time of delivery.
General practice is that an offer will be sent to you (usually via email) and the buyer’s agent will call you to let you know that they’ve sent it.
As a seller, you’re not bound by any terms and you have the right to completely ignore the buyer (although I don’t recommend it).
Unless the offer is for full asking price, then you’ll most definitely want to take action with a counteroffer.
This means that you’ll basically revise the current offer with a new asking price or whatever terms you want to change and send it back to the buyer.
The buyer may accept, decline and send another counteroffer, or they may walk away entirely.
It’s important for you to do extra research into the art of negotiation in real estate.
There’s a fine line that you need to walk as a FSBO. You’re vulnerable in a pool of professionals who know how to win engagements.
What Happens When You Accept an Offer?
Congratulations! You’re now “under-contract”.
In North Carolina, the buyer usually provides the closing attorney, who will hold on to the earnest money deposit and due diligence fee in escrow.
You’re now in a phase called the “due diligence period”.
This is the time where the buyer gets the opportunity to go through all their inspections and negotiate repairs with you.
This is also the time where the buyer has the full right to void the contract for any reason with entitlement to their earnest money deposit. The only thing they’ll lose is the due diligence fee, which will be rewarded to you as “liquidated damages”.
It’s important for you to allow the buyers to do whatever they want at your house. Your job, for now, is to keep them happy.
7. Closing
Now it’s time to prepare for closing and deliver the keys to your buyers.
There’s a lot of paperwork involved with closing and while most of the effort is on the buying side, you may want to consider hiring an escrow agent or a fee-only real estate broker to help you stay legal and on pace for closing.
You can find fee-only broker representation on sites like forsalebyowner.com for as much as $900.
You’ll also want to take note of the closing costs you may need to prepare for. While most closing costs will be paid for by the buyer, there are situations where the buyers will negotiate for you to cover some of the costs.
The most important thing about closing is that you want to have everyone that’s involved in the transaction on the same page and going through the motions to ensure a clean process.
When you finally get to the closing table, you’ll transfer your title to the buyers, funds will be disbursed to you, and you’ll hand the keys over.
Final Thoughts
Selling a home on your own is super hard.
There’s really no way to sugar coat it. Most will fail, few will make more than they would with a Realtor.
I also wouldn’t recommend selling a luxury home for sale by owner.
But despite this, if you follow the guide I’ve laid out, then I would give you better odds at selling than I would if you didn’t follow the guide.
Let me know what you think in the comments below. If you’ve sold a house FSBO in the past, I’d love to hear about what you did.
And of course, if you need help or advice, reach out.
Stay Classy.
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