"How to Sell Your Home WITHOUT an Agent"
by Adam Hopkins
Anytime there is an upswing or downturn in the housing market, some 'experts' urge sellers to try going it alone, saving the 5%-6% a real estate agent would charge to orchestrate a sale. But how do you know if the for-sale-by-owner (FSBO) route is right for you?
Well, you’ll need a thick skin and a better-than-average knowledge of home values and mortgage options, but most importantly, you’ll need plenty of time.
For starters, you’ll need time to show the property. Most buyers shop on weekends, so you’ll need to keep Saturdays and Sundays free. But some buyers also look on weekdays, so you should plan to be around then, too. Buyers are impulsive when deciding which homes to look at, so you will need to be available on short notice or risk losing a sale.
As an FSBO property, you should also be prepared for it to take longer to land a buyer, perhaps many months longer. That’s because many buyers don’t want to look at a home without an agent, and agents don’t want to show homes that don’t offer commissions. By selling on your own, you reduce your market to a small subset of buyers, reducing the prospects for a quick sale. (You can overcome this problem by offering a 2% to 3% commission if a buyer’s agent produces a sale.)
So the ideal go-it-alone seller is someone like a retiree who has plenty of time during the week and no drop-dead deadline for closing a deal. If you need to sell to relocate for a new job, or to get resettled by the start of school, the FSBO route may be too risky.
Now, about those other criteria....
Knowledge matters because you will have to explain to buyers much of what they would ordinarily learn from an agent. That means producing data on comparable local home sales to justify your price. Using sources like Zillow.com, you can unearth similar properties that have sold in the past six to 12 months, however, please keep in mind that companies like Zillow are increasingly drawing fire for their automated "Zestimate" home valuations, that are frequently off by as much as 35%-40% of actual market value. Still, be sure to drive by those properties to select ones your buyers will truly consider comparable, and calculate a price per square foot that can be applied to yours.
Also, arm yourself with counterarguments. You will want to point out, for example, that your home has a newer roof, furnace or kitchen than others that might be cheaper.
Next, bone up on mortgage rates and terms, and use the BankingMyWay Mortgage Loan Calculator to figure out monthly payments at current rates. A buyer who wants to pay $10,000 less than you’re asking might be swayed if you point out that, at today’s low rates, it costs less than $50 a month to borrow $10,000 for 30 years.
You’ll also need better-than-average knowledge to assess any buyer who makes an offer, because you don’t want to accept an offer and take the home off the market for weeks only to see the buyer fail to get a loan. ALWAYS ask for a pre-approval, which is a specific lender’s tentative agreement to grant the loan. To get a pre-approval, the borrower must document income and a worthy credit score, while a pre-qualification is a less demanding process.
Finally, there’s that thick skin. In showing the home, you’ll have to listen to a lot of criticism, something that’s easily avoided if you use an agent. Of course, if you can bear to hear them, the critiques will guide you on improvements that might make the property more appealing.
None of this is to say that selling on your own is a bad idea. Many people have been happy with the results, though others say they’d never do it again. The process has become much easier in recent years with the flood of FSBO sites on the Internet, some charging modest fees to help with advertising or to get a property on the Multiple Listing Service. For instance, you can now list your home in the Lynchburg MLS and REALTOR.com for as little as $295, and if you generate a buyer, you pay no commissions at all! For more information, contact Hopkins Real Estate Group at (434) 444-7136 for details.
If you have plenty of time, you can try selling on your own for a few months, then find an agent if the process just isn’t for you. A good REALTOR(r) will always be happy to welcome the lost sheep back to the fold.
Adam's Quick Tips to Sell Your Home without an Agent
MARKETING - Exposure Sells! Where do you look for a home? Chances are buyers will be looking there also. Today 92% of buyers are shopping online. Do you have your home listed on the sites where they are shopping? (Realtor.com, MLS, etc)
PRICING - People today are looking for a value. How does your home stack up to the competition. If you don't have a recent CMA (Comparative Market Analysis) of your home, you need this before you price your home.
STAGING - You only have 7 seconds! Studies have proven that buyers decide in the first 7 seconds whether or not they are in love with your home. Are you doing everything necessary to make sure buyers can envision themselves living in your home? If not, you will need to address this before your next showing!
NEGOTIATING - Every buyer is different! Negotiating is stressful because, lets face it...buying a home is an emotional process. You need to know your facts, the area, what other homes the buyer may be considering, and what the hot-button items are when negotiating with a buyer. If not, that buyer may disappear without a trace.
LEGAL FORMS - Do you have the current legal forms, disclosures, contracts, and addendums needed to close the sale? Are you comfortable walking the buyer (especially a first time home buyer) through these? Remember - if you're not a lawyer and you engage in "practicing law", you can be held liable. Make sure you get proper guidance.
CLOSING the SALE - Even after the ink on your contract has dried, you still still have several contingencies to work through: Home inspections, loan applications, appraisals, insurance, termite, well, septic reports, and the list goes on. If you miss any of these deadlines, even by a day, the deal can fall apart. Be sure you stay on top of these from start to finish, and NEVER ASSUME the other party is "handling it" on their end.
Hopkins Real Estate Group now offers a step-by-step plan to assist "FSBO" Sellers through the process for a very reasonable rate. While HREG still provides traditional, listing services for buyers and sellers, their "MLS-for-Less" service provides sellers the ability to potentially save THOUSANDS on the sale of their home, while still ensuring these critical areas listed above are addressed in a timely fashion.
Should you have any questions, or would like to find out if "MLS-for-Less" is right for you, give us a call at (434) 444-7136 today. As always, there's no cost or obligation to call.
Adam Hopkins, Broker
Hopkins Real Estate Group