Steps to Sell a House by Owner - Complete Guide
If you've recently explored the idea of placing your home on the market, your initial research may have shown you that you will need to pay your real estate agent a commission that can amount to 3-6% of the sale price. While Real Estate Brokers provide valuable services that can help you simplify the home-selling process, it's also possible to complete this process on your own.
Before you even entertain the idea of selling your home without a Real Estate Broker by your side, there are many things you should consider. If you want to know how to sell your house on your own, the following is a step-by-step guide on this process.
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1. Take Pros and Cons Into Account
Selling a home without retaining the services of a Real Estate Broker has its pros and cons, all of which you should consider before moving forward with this approach. The benefits of this method include:
- Eliminate commission fees - Since you don't need to pay the commission fee of 5-6%, your profits will be considerably higher.
- Sell your home quicker - Nearly 80% of homes that were sold by owners in 2020 were sold in less than 14 days.
- Have complete control over the process - Instead of leaving your agent to control negotiations and marketing for the sale of your home, you can control every facet of the process, which may help you streamline the process.
The few issues associated with selling a home without a Real Estate Broker include:
- Requires ample amount of time - Selling a home without the help of a Real Estate Broker can be difficult to handle. You'll be tasked with preparing your home for sale, performing marketing, analyzing recent sales trends, scheduling appointments, and fielding any offers that are made.
- Any hurdles must be handled on your own - Whether a buyer requests repairs to be made or non-permitted work is discovered on the property, you must handle any problem on your own, which can prove to be challenging.
- It's possible for you to earn less money - Selling a home without a Real Estate Broker may cause you to lose money. The median price for an FSBO home in 2020 was right around $217,000, which was 25% less than non-FSBO homes. Keep in mind, however, that this comparison doesn't take other factors into account that may cause prices to be different.
Identify a Realistic Priced Based on Market Conditions
Once you've weighed the pros and cons and believe that this is the best option for you, it's time to properly price your home. The price you land on should be somewhat close to the estimated value of your home. Real estate agents typically help homeowners by performing a comparative market analysis that uses recently sold homes in your area to create useful comparisons.
When selling your home without professional assistance, you will be tasked with performing a CMA (Comparative Market Analysis) without any help. Your goal should be to settle on a price which reflects the market value. If the listing price is too low, your home would be undervalued, which would cause you to lose money. Overvaluing the home may lead to buyers not showing any interest, which may lead to the home staying on the market for too long. When conducting a CMA, make sure that you look at:
- Recent sales nearby your home
- Comparable active homes in your area
- Notable amenities that your home provides verses competing homes
- Market trends pertaining to price and sales volume
Most of this information is available online through websites like Zillow. You should also request a home appraisal to obtain an accurate estimate of your property value.
Take Pictures and Prepare Your Home
When you decide to sell your home, among the most important aspects of this process is properly displaying your home to potential buyers. Photos that appear to be professionally done can be worth several thousand dollars when it comes to the final price. Make sure that you improve the appearance of your home before taking pictures. Depending on the property conditions, some repairs may even be necessary.
Consider adding a coat of paint to the home's exteriors. You should also wait for a well-lit day with ample amounts of sunshine and natural light. For the interior photos, it's highly recommended that you remove clutter from your home to make sure that the interiors are properly staged. Perform a deep clean to remove any dirt, dust, or stains from your home interiors. Consider adding some flowers to your entryway for a more natural appearance.
If you want your home to be properly marketed, think about hiring a professional photographer, which can cost several hundred dollars. Once you've prepared your home, you may consider hosting an open house, which provides potential buyers with the opportunity to view your home without needing to schedule an appointment.
List and Market Your Home
There are numerous websites that provide sellers with a place to list their home. While some websites charge a small fee for making a listing, other sites offer these services for free.
When looking at the many marketing options available to you, social media websites like Instagram and Facebook can be particularly helpful when you're trying to get potential buyers interested in your home.
A "For Sale" sign in your yard is also highly recommended. Many buyers choose to drive through neighborhoods that they'd like to live in while searching for a home. With a sign in your yard, you'll get more eyes on your property.
It's highly recommended that you consider listing your home on a multiple listing service, which ensures that you'll receive full MLS listing coverage. When you request this service from a broker like ByOwner.com, it will come with a flat fee that can cost you around $500. The most popular online real estate websites like Trulia, Realtor.com, Redfin and Zillow pull data and listings from an MLS, which is why it's better to get your home listed on an MLS.
At ByOwner.com, our flat fee broker will provide your home with the same exposure that it would receive under a traditional broker but with less hand-holding. Even though you receive limited representation, you benefit from having access to a local MLS service, which allows you to effectively avoid the high commission fees that most real estate brokers ask for.
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Consider Offers and Buyer Financials
The fifth and final step that occurs when selling your home is to consider offers as well as buyer financials. Once you've received an offer that you believe is fair, you must confirm if the buyer's information is true. If you can't confirm that the buyer is able to afford your home, you shouldn't even entertain their offer. Every buyer who makes an offer should provide you with a preapproval letter or proof of funds to close if they make a cash offer. You should also contact the buyer's lender to verify their info.
Identify the exact down payment that the buyer is putting forward. You should also know how much the buyer is qualified to borrow from their lender. In the event that there are conditions in the loan approval, identify what these conditions are. Once you have all of the buyer financials, you can be more confident that the sale of your home will go through.
Selling a home with a real estate agent allows you to place all of your focus on preparing for your move and finding a new place to live. On the other hand, selling your home without any additional help gives you the ability to reduce expenses, expedite the closing process, and have more control over how your home is sold. The five-step process detailed above should help you take a more structured approach to selling your home. Learn more about how you can save thousands of dollars by listing your home on an MLS with our flat fee MLS listing.