Ideally, sellers hire an agent to sell their home. However, there are a few brave souls who take the risk and sell on their own. If you are planning to FSBO, here are the basics of home selling 101:
Research and understand. With FSBO, a comprehensive understanding of the real estate terminologies will help you avoid confusion and poor judgment during the selling process.
Study the housing trends in your area. Determine the selling price of the currently listed homes and the recently sold houses so you can price your home fairly. Compare these to your home: square footage, upgrades, and special features. How long did similar homes stay in the market?
Know your payables. Without an agent by your side, it is now your job to research the real estate fees that you need to pay while selling your property. You need to have a fund for repairs and possible issues that may come up after the pre-purchase inspection. Buyers have their agent, but it is the seller’s responsibility to pay that agent’s commission. Most important of all, pay your remaining mortgage payment upon selling your home.
Prepare your house for selling. It’s all about making first impressions and having a welcoming curb appeal. Repair, update, clean and stage your home. Take cues from other houses which are currently advertised on the market and see how your house stacks up against the comparables.
Take professional photos. Hire a good real estate photographer to highlight the key features of your home. Smartphone shots are just too unappealing.
Advertise your home. The cheapest marketing tool that most FSBO sellers use is a yard sign, in fact, NAR reports that “36% of would-be sellers rely on yard signs.” In the housing market, “only 10% of all buyers actually find their homes via yard signs.” Don’t think about advertising on print media either, as “only 1% of buyers find homes through newspaper ads.”
Marketing, when done right, can increase your chances of FSBO success. Without access to an agent’s vast real estate network, you need to get your house listed on the MLS (requires hundreds of dollars in listing fees) and other trusted home listing websites. That is because “92% of all home buyers use the internet to help them in their search.”
Determine the effectiveness of your marketing strategy. Try and gather a sense of what other listing agents are selling properties for in your area. Inquire how many property showings should be expected from a house for sale in your location. Accurately pricing your home is a vital step and without a strong understanding of the market and the true value of your home, you may find yourself overpricing your home and driving potential buyers away.
Prepare the necessary real estate documents. Among the tons of paperwork needed in a real estate transaction, you must be able to draft a proper sales contract. Seek the help of a real estate attorney to ensure its legalities.
There is also a seller’s disclosure, which enumerates the important details on the condition of your home. In Oklahoma, a disclosure form must indicate the items and appliances included in the sale, previous flood damage, sewer backup, electrical defects, environmental and health hazards, filed lawsuits on the property, and homeowner association fees.
Find out if you have a qualified buyer. Know the difference between a pre-qualification and pre-approval letter. The buyer should have the earnest money in escrow. Ensure that your home will be paid accordingly. For example, the Oklahoma Real Estate Commission warns homeowner sellers against creative types of home financing which can result in financial jeopardy. Refrain from arrangements such as equity sharing, note without a mortgage, Treasury bond exchange, promissory notes, and new loans prior to closing. Moreover, study the Federal Fair Housing Acts of 1968 and 1988 to avoid possible buyer discrimination.
Resolve issues. Get ready for a list of repairs and/or potential problems after the buyer’s inspection and lender’s appraisal. Repair, replace, or offer credits to resolve the issues.
Close the deal. If everything goes well, schedule a closing date with the title company and bring your ID, house keys, and property documents to be signed. After the closing day, the lender will release the funds as payment and you will have to pay the commission of the buyer’s agent. Afterward, you have officially sold your own home.
According to the National Association of Realtors, “more than 80% of FSBOs end up listing with a Realtor.” If you find all of the steps above to be time-consuming and overwhelming, a real estate agent can help you sell your home faster, easier, and at its best price. Need help? Call my number or email me today.
disclosures in Oklahoma: https://www.lawyers.com/legal-info/research/oklahoma/selling-a-house-in-oklahoma.html
Oklahoma Real Estate Commission: https://www.ok.gov/OREC/documents/Buying%20and%20Selling%20a%20House%20Info.pdf
Brian A. Allen is a Realtor and is full of energy, excitement and zeal for every sale. He spent most of his career in marketing and now applies that skill set to the homes his clients want to sell. Click here to learn more about Brian A. Allen