If you're considering selling your home, selling it yourself, also known as “FSBO” or For Sale By Owner, can be a good option that provides you with more control over the sale. But it isn't for everyone, and requires extra work on your part.
FSBO homes typically sell for less than those listed with real estate agents, and also tend to take longer to sell. You'll need to carefully consider whether an FSBO makes sense for your situation, and ultimately achieve what you’re hoping for.
Following are six steps that can help you sell your home as an FSBO (i.e. without a licensed real estate professional).
1. Establish a Competitive Listing Price
A common issue with FSBO listings is that they're overpriced, and then linger on the market for too long, or don't sell at all. This can cause a home to become "stale".
The best way to sell your home is by pricing it competitively (with consideration of having zero to low real estate agent commissions). The Listing price should be under current market prices of recently sold homes.
When pricing your home, consider the amount of money that you would like to net after all costs, what the housing market is like in your area, the time of year, and how much comparable homes that are nearby have sold for in the last 30 to 60 days.
With so many variables coupled with market dynamics, you may want to engage with a local real estate agent that can help you determine what similar properties have sold for recently. They can also provide their opinion and advice on whether they believe the range is reasonable given local market factors as well as other variables such as local amenities and recent construction projects in the area.
Many real estate agents will provide you with a free, no strings attached Comparative Market Analysis (CMA). This service is normally provided in hopes that you may eventually choose to use them (should you not be able to sell as an FSBO, or it simply becomes too much work).
This is also the perfect time to decide if you're willing to work with buyer agents, and if so, what compensation you’re willing to offer for bringing you potential buyers. Generally speaking, you can offer a commission of 2% to 3% to buyer agents. This should encourage them to drive prospective home buyers your way (assuming your home is listed within the MLS).
Lastly, connect with FSBO sellers who recently completed a successful FSBO transaction to understand their experience and learn their tactics. You can also talk to a local REALTOR that specializes on the buy side. It’s likely they have worked with FSBO sellers and can provide some guidance on how to best entice buyer agents to bring you prospective buyers.
2. Get Your Home Market Ready
Now that you have your listing price, it’s time to get the home market ready! This will be a key step for your real estate photoshoot as well as open houses and home tours.
Whether you're selling as an FSBO or through a professional real estate agent, you'll want to make sure your house is in the best shape possible before listing it for sale. In most areas, homes that look well cared for will generally sell quicker and for more money than those that don't.
Here are some tips:
Clean up clutter and remove stuff you no longer want or need (inside and out).
A cluttered home will slow your sale and likely reduce the amount it will sell for. Clutter does not allow a prospective buyers to freely move about or fully envision themselves in your home and all the possibilities and spaces.
From my experience, the best method to de-clutter is to check with friends, family or neighbors to see if they would want any items, or you can sell (or post for free) on Craigslist, OfferUp, Facebook Marketplace, or NextDoor. You can also donate household items and clothing to Goodwill, Salvation Army, Habitat For Humanity, or Value Village. If you have a lot of stuff, and not a lot of time, consider a “junk” removal service such as 1-800-Got-Junk. Last resort, place items in the trash or take to the dump, however you will be amazed what you can quickly and conveniently sell online locally or giveaway. Of course items should be in good condition or easily repairable, or “repurposable” (I once listed an old broken toilet on Craigslist for free and there were a few eager folks that wanted it as a planter / yard decoration – you just never know!)
Remove personal items such as pictures from walls and shelves - potential buyers want to imagine themselves in your home and this can be difficult to do with family pictures on the walls.
Paint walls a neutral color throughout.
Replace or repair worn and damaged carpet and flooring.
Ensure all appliances are in working order and clean.
Thoroughly clean the entire home or hire a professional cleaning crew.
The home’s interior should have a clean, neutral, and minimalistic look and feel. This includes minimizing the amount of furniture to improve the flow through the home.
Don’t neglect the exterior of you home – this can actually be more critical than the inside as it’s where first impressions happen!
Be sure lawn and bushes or well cared for and manicured. Add bark and have bushes trimmed and hedged.
Walkways and driveways should be clean and free of any hazards (pressure wash as needed).
Pressure wash exterior siding, or paint.
Clean windows inside and out.
Roof should be in good condition (replace or repair if not) and free of moss, leaves and other debris.
If you need assistance with any of these steps, a local real estate agent should be able to provide guidance and point you to professionals that can help (such as a home stager, handyman, painting contractor, landscaper, etc)
3. Market the Heck Out of Your Home
Now that your home has been refreshed, it’s time to market it! One critical thing to remember is that even if you don't plan on using a real estate professional, you will still incur costs associated with marketing your home. So be sure that selling via FSBO (For Sale By Owner) truly makes sense for you and your situation before proceeding with this option.
Here are FSBO expenses that are commonly wrapped into a real estate agent’s commission:
Professional photography and virtual 3D walkthrough
Online marketing (MLS, Craigslist, Social Media, etc)
Attorney (to provide, draft, and review real estate transaction documents)
Signage and directionals (front yard for sale sign / post, road directionals, etc)
Key lockbox
Home Warranty (not necessary, but provides peace-of-mind for all parties)
If you decide on FSBOing it yourself, one essential step is getting professional photos taken of the inside and outside of your home so potential buyers can see what they're getting into before they travel to your home and set foot inside. According to Statista.com, 95% of all home searches start online through websites such as Zillow.com, RedFin.com, Realtor.com, etc. This number’s even higher (99%) for the largest group of home buyers - ages 23 to 56!
It’s highly recommended that you use a real estate photographer that specializes in home photoshoots. These professionals understand how to set the lighting, situate furniture, the best angles, etc. They can also edit pictures to remove unwanted items, make skies bluer, etc. The expense is well worth it. Your home will likely sell quicker, and for more money.
A quick online search or a Facebook or NextDoor community question will yield many photographer options. Read reviews, look at their past work, and ask questions.
A local Realtor can also point you in the right direction as they’ll have at least one professional and reputable real estate photographer that they use and trust.
Lastly, depending upon your home's size, layout, property, and location, consider a Matterport 3D Home Tour (many real estate photographer now offer this option for an additional cost) and a drone video (along with still photos) to really help prospective buyers (and buyer agents) best visualize your home and surrounding property and area.
4. Prepare Your Home For Showings
Ok, so you’ve marketed your home, and people are viewing it online and now want to come visit and see it for themselves – WooHoo!
First and foremost, when it’s time to show your home, again (this warrants repeating!) make sure that it's spotless and decluttered inside and out. All personal effects should be removed (or tucked away) from walls and shelves in every room.
Next, if the potential buyers are represented by a buyer’s agent, and you have a means for them to gain entry (front door or garage code, lockbox, etc), then it’s best for all occupants to leave during the showing. This generally allows for a smoother and more comfortable home showing for potential buyers. If you have any pets such a dog or cat, take them along with you. If that's not possible, secure them in a crate or similar in the garage or a bedroom.
Be sure the home is well lit. Open all blinds and curtains if during the day and as many lights as you can if dark outside.
A home’s unique smell can influence a potential buyer. If there’s a smoker in the home, or you have pets, or you sense your home’s smell may have that “special” something, you should consider ways to neutralize or eliminate the smell. Strive for fresh and neutral.
Here are some methods to improve or neutralize a home’s unique smells:
Open or crack windows to allow a constant flow of fresh air.
Identify odor source(s) and eliminate, move, clean, etc (such as a cat litterbox, diaper pail, etc).
Have the home and carpets professionally deep cleaned.
Masking smells isn’t ideal, buy may work in a pinch so as to not overwhelm visitors. Essential oils work nicely and safer than candles.
Odor neutralizers such as activated charcoal.
5. Here Come the Offers - Now the Fun - Negotiate!
Once you've received an offer (or offers!) from a buyer, it’s time to review and negotiate. You'll have some decisions to make here; do you counter-offer or not? If so, what are you willing to give up? An acceptable compromise for one person might be an unreasonable demand for another. Your best bet is to base your decision on what comparable homes in the area have sold for, and how much money you need out of the sale. There are also some other offer considerations such as:
Contingencies
What contingencies does the offer contain? Depending upon the market, you may have a received an offer with a sale contingency and/or home inspection contingency. Appraisal contingencies are necessary if a buyer is financing a large portion of the home cost.
In a healthy housing market, such contingencies are normal and expected. However, if you receive multiple offers, some may be more appealing. For example, one offer may have no sale or financing contingency because it’s an all cash offer.
You can attempt to negotiate contingencies, but it can be challenging as they may be necessary for the potential buyer to afford the home.
In a hot market, an FSBO seller can conduct a pre-sale home inspection and have it available for prospective buyers to review. This may eliminate the need for a home inspection contingency (however some potential buyers will still want to have their inspector conduct a more “independent” inspection).
There may be further negotiations required depending upon the contingencies, and the results. In the case of a home inspection contingency, a potential buyer may request certain repairs completed and/or a seller credit or home price reduction to compensate for the necessary repair costs. If agreement cannot be reached, the contract may be voided and both buyer and seller can move on.
Consider a pre-sale inspection if your home is older, or you feel (or know) it has some issues. If nothing else, it can provide peace of mind, and allow you to fix issues upfront that may affect the sale of the home or that could become negotiating points down the line. If you need help locating a certified and reputable home inspector, try an online search or your local real estate agent.
Closing and Possession Dates
Do the chosen closing and possession dates work with your schedule? Do you need to rent back? These dates can often be negotiated toward a win-win for both sides.
Earnest Money
The amount of earnest money may help persuade you to accept an offer. Earnest money is normally 1 to 10% of the sales price. The amount can vary depending upon whether it’s a buyer’s or seller’s market. It’s essentially a down payment on the home and indicates how serious the buyer is. This is money that will go into an Escrow account (work with your real estate attorney and/or Escrow officer) and if the potential buyer breaks the sale contract, will become the seller’s funds to keep (or portion thereof). However, contingencies written into the sale agreement will dictate the details of the earnest money deposit. Side note: If the home sale goes through as planned, the earnest money is normally redirected toward the buyer’s down payment.
If multiple offers are received, it’s best for sellers to analyze the different components of each offer side-by-side. This allows you to conveniently review all aspects of two or more offers to make the best decision for your situation. The highest price may not always be the best offer depending upon the reasons for selling.
If you’re in need of a multiple offer analysis worksheet, contact a local real estate agent (I have two I like to use – one for escalating offers, and one for non-escalating). You can also do an online search for “home multiple offer work sheet”.
Once you and the buyer reach an agreed to sales price and terms, make sure you have all the required real estate documents for your state and that they’re properly filled out and signed by all parties. This is where you want to work closely with your real estate attorney so they can guide you and review all documents for accuracy and completeness.
Working with your attorney will help avoid confusion and potential legal issues or delays down the line when problems can arise, such as a buyer wanting to back out of a deal or changing their minds for a myriad of reasons. Some of which will be legitimate and must be honored such as home inspection issues, appraisal, etc. Your real estate attorney can also assist with issues that pop up.
Yes, a Real Estate attorney will cost money, but in the long run will likely save you many headaches and put you at ease (less stress is a good thing!). The buyer side should also have a real estate attorney if they're not familiar with purchasing a home without representation from a real estate agent.
6. It’s Closing Time!
You’re so close – it’s time to prepare for the closing. At this point, you may be wondering how exactly you're going to get through this entire process. It's not as difficult or stressful as it may seem, and you’re now in the home stretch!
Understand your specific state’s laws and requirements for a real estate closing (again, here’s where your real estate attorney can assist). In Washington State (where I’m licensed), choose a Title and Escrow Company in your area. If you don’t know of one, you can do an online search or ask your local Realtor (I work with a great one, and have contacts in all states).
Consider connecting with a Title and Escrow Company at the start of your FSBO endeavor. They can help guide you (along with your real estate attorney) relative to what you need from the beginning and throughout the sale process to help you achieve a successful closing at the end.
Depending on the state and Title and Escrow Company, some will have FSBO “packets” with detailed steps, and necessary forms, documents, etc.
Ultimately, Title and Escrow companies strive to ensure the purchase, sale, and closing process is as streamlined and stress-free as possible, and that all steps are executed correctly so as to not delay or hinder a home sale and closing process.
In general, following are some key elements title and escrow companies provide (may vary depending on the state).
A thorough title search to ensure a title is free and clear of issues that could hinder a buyer’s rights or interests to the property.
Title insurance to protect the owner’s rights and financial interests to hidden issue such as errors in recording, unpaid taxes, liens, forgeries, etc
After a purchase and sale agreement is signed, title and escrow will hold funds and documents until all conditions of the agreement have been met.
Underwriting. This occurs during the closing process by the buyer's lending institution (assuming they're financing the purchase). This involves the review of loan documents to ensure the potential buyer meets the lenders financial requirements. This is also where an appraisal of the home likely happens. Lender / financing Issues can arise at this point depending upon the agreed to purchase price and appraised value.
30 days is a good rule of thumb to work through the title and escrow steps. During those 30 days it’s important to stay in frequent communication with your title company so you’re kept informed of the status and if any additional information, documents, etc are needed. A good title and escrow rep will be attentive to ensure the entire process plays out as smoothly as possible, and if any issues do arise, that they’re worked through as quickly as possible
You Can Sell Your Own Home, but it Takes Time and Thorough Preparation
Prepare for quite a bit of time and work.
Do plenty of research and know your local housing market.
Estimate the costs and net benefit of FSBO vs using a Real Estate Agent - it may surprise you. Check out this article from NAR for the average sale prices of FSBO vs using a Realtor. Of course do your own due diligence that’s specific to your situation and location to determine what’s best.
Talk to an experienced and reputable local Real Estate Professional / REALTOR to better understand their side, and what they provide. Many agents are willing to modify their commission percentage and/or service levels to have the right to list a home. It may become a win-win!
Use a reputable Real Estate Attorney and Title and Escrow company.
Choose a listing price that will attract plenty of potential buyers and be willing to work with (compensate) buyer agents.
Get your home ready for marketing (professional photos) and showings by making it sparkle inside and out, along with setting aside time for open houses or showings with agents.
Final Thoughts
If you’re considering selling your home by owner, I hope this write up has provided some insight and guidance to assist in your decision.
Selling a home by yourself can be financially beneficial and rewarding for both buyers and sellers. However, it can also be stressful, time consuming, and not as lucrative as it may seem at first blush – especially for those unfamiliar with the process.
I always tell people who are considering selling a home on their own to map out the pros and cons, as well as create a matrix estimating the financial net benefit of doing an FSBO vs selling in the traditional manner of using a licensed real estate agent. And don’t forget about the intangibles such as your time that will be involved. The results can often be surprising (much of it will depend on the market). However it’s most definitely achievable, just surround yourself with a good supporting cast!
If you still have questions about whether pursuing a FSBO is right for you, I encourage you to contact a local REALTOR to discuss further. I can also help address any questions or concerns that may still be on your mind.
Thank you for taking the time to read this - I sincerely hope it helps you make the best decision for you and your family.
Joe Frank
Real Estate Broker | REALTOR®
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