Private Sale Is Challenging
FSBO - For Sale By Owner is your money saving alternative to selling a house through an agency. How much you can save, and if you can make it happen depends on your commitment to be your own agent.
There're few primary reasons why you may decide to sell your home privately:
How To Sell My House Myself
Decide what you can do yourself and in what areas you need a professional help. You should also have a contingency plan if your house doesn't sell within a reasonable time.
Buyer's Agent - Private sale doesn't guarantee that you can avoid paying a commission. In fact, you will be contacted by many agents offering their help with finding a buyer for a fee.
Since commissions are usually split 50/50 between the buyer's and seller's agents you can claim a half of the commission rate for yourself, or even more if you are a tough negotiator and market conditions are in your favour.
Pricing - FSBO properties unless they are offered in the seller's market do not compete well with comparable homes listed by agents at the same price. Homebuyers usually prefer to negotiate through an agent and they wouldn't have a cost incentive to purchase directly from an owner.
When it's hard to sell give your buyers a discount they crave for. You'll sell the house faster and you still can save money for yourself.
Lowering your price below the market value for as much as 50% of the commission rate will get you on a fast track. If savings are more important to you than a timely sale, you can reduce the price by less.
FSBO Listings - Online companies offer a variety of packages. Services may include listing a house on their website and the MLS, making lawn signs, help with negotiating and closing deals, taking photos and preparing virtual tours.
These sites will give you tools to interact with homebuyers and to measure the performance of your listing.
They charge a flat fee instead of a commission. The average cost to list a house is about $1000, including the MLS exposure. The price varies depending on a region and service level.
In Toronto it's around $2000. The same services cost less in eastern provinces and rural areas. You'll have to pay for the service upfront. The fee is non-refundable if your home doesn't sell.
Advertising - You need more than a brief description of the property and some photos. A properly worded and illustrated ad will do a much better job.
Keep in mind that user interest and selection of properties for further viewing is initiated online by visual clues. Poor photos deliver inferior results. They have to be neat, bright and inviting.
How to make your online ad :
While you are on your own, you still can apply many of the same marketing instruments used by agents to advertise homes.
Direct mail and e-flyer services are affordable, using social media to promote the property will cost less or nothing, and online classifieds like kijiji and cragslist are free.
Street Sign - Avoid preprinted signs, which look cheap and amateurish. Order or prepare your own board, similar to those used by agents. Make it double sided so that it can be noticed by people driving by from both directions.
Provide basic info - FSBO, number of bedrooms and bathrooms, special features, viewing by appointment only, and a phone number. If you have any pedestrian traffic in front of the house print pick-up sheets, and attach them to the board or a fence.
Presentation - Ask for the buyer's name, phone number and home address. Always call back to confirm an appointment. Never receive visitors after dark. Walk-ins are acceptable only when there's another adult in the house.
Remove all valuable items and let your buyers walk around freely. Once they finish, show them anything special about your property they might have missed, and answer their questions.
Legal Assistance - Find a lawyer who will prepare for you the agreement of purchase and sale. Negotiate terms and conditions with the buyer and have them approved by the lawyer.
If your buyer has an agent they'll come up with an agency prepared agreement where blanks are used for terms and conditions. No matter how simple they seem to be you'll still need a lawyer's review. Even one simple phrase can have mighty consequences.
Follow up after the initial presentations. This may seem to you a little pesky, but it's what efficient sales people do. If you haven't heard from your propspects give them a friendly phone call. Ask whether they're still interested and if they would like to have a second look at it.
FSBO And Listing Agreements
These agreements are intended for homeowners who don't mind selling through an agent and still want to reserve their right to a private sale without paying a commission. You may find them helpful if your house doesn't sell as you expected.
Exclusive Agency Listing is limited to having a house posted on the MLS. No other services are offered, and commission rates are discounted.
Some discount brokers advertise their commission as low as 1%. You'll pay such a rate only if the agency you listed your house with finds a buyer.
If another broker brings a buyer, an additional charge equal to a half of the commission has to be paid to that broker. For example, if their full commission is 5% your extra cost will be 2.5%, and the total cost is 3.5%.
Open Listing - While you advertise your property as FSBO you'll have many inquires from agents asking if they could get you a buyer. That's the only service provided under the open listing, which you can sign with different agents at the same time.
Such agreements are made to ensure that you don't bypass an agent, and enter into own deal with a buyer introduced by the agent. You'll have to pay to the agent one-half of the fee or whatever you negotiate.
How To Stage Your House
First impression really counts. Make sure the house and its surroundings are tidy:
Is FSBO Right For Me
FSBO can save you money, but you have to work for it. It's a challenging endeavour asking for a lot of your time, dedication and some skills of an agent.
Also, one has to remember that taking agents out of the picture is at the same time shrinking the number of prospects. So, it usually takes longer to sell on your own.
If you can't make your FSBO with dedication or a faster sale is a pressing concern, you might be better off with finding an agent and selling your house the old fashioned way.