A portion of every transaction donated to HABITAT FOR HUMANITY
For Sale by Owner
If you ask people who have tried to sell their home themselves they’ll probably tell you that from the moment the “For Sale by Owner” sign goes up, the phone begins to ring. Unfortunately, many of those calls are not from prospective buyers, but rather from real estate agents looking to obtain your listing. Obviously, the idea of not having to pay a commission to a real estate agent is attractive to you as a homeseller. But because of all the issues involved in the process selling a home on one’s own can be challenging.
However, there are sellers who accomplish selling their own homes very well. You could be one of them. The key is being properly prepared. Here are some tips to help you make the decision as to whether or not this is the right approach for you.
Price it Right
Correctly setting your asking price is critical. Setting your price too high can be as costly as setting it too low. Home prices are determined by fluctuations in the marketplace, not by your emotional attachment or by what you feel your home is worth. In order to establish a realistic price for your home, objectively compare the price, features and condition of all similar homes in both your neighborhood and other similar ones which have sold in recent months. It is also important to become familiar with the terms of each potential sale. Terms can be as important as price in today’s market.
Carefully budget all your selling time and expenses (from the ‘for sale’ signs to marketing materials to scheduling showings to contracts) and prepare a net proceeds sheet to calculate your best estimate of what you will take away from your home sale.
Expect to Pay a Commission
Keep in mind that commission is usually split to cover the listing agent, listing broker, selling agent and selling broker. If you are representing yourself you will be keeping the portion usually going to the listing agent and listing broker. Unless you sell to a buyer who isn’t represented by an agent, you will likely be expected to pay a commission to the buyer’s agent and broker.
Prepare Your Home for Sale
First impression is crucial. Make sure your home makes a positive statement by carefully inspecting all details and viewing it through the objective eyes of a buyer. Don’t gloss over needed repairs and fix-ups, as your prospective buyers won’t. Your job is to ensure that your home stands out favorably form the competition.
Prepare Yourself with all Necessary Legal Documentation
Not surprisingly, there are many important legal contracts and documents which you must assemble, complete and understand. A partial checklist of forms that you will require for prospective buyers and for legal documentation follows.
Seller Property Disclosure - required by Minnesota state law
City Inspection, if required in your jurisdiction
Buyer financing pre-approval
Earnest money escrow account and deposit receipt
Property profile fact sheet
Buyer’s cost sheet - if buyer is not represented by an agent
Agent commission/single showing contract - if buyer is represented by an agent
Closing & settlement
Personal property inclusion/exclusion list
Property survey/plot plan
Special assessment search
If this seems like a daunting list, don’t despair, we also work with people who are selling their homes on their own...helping with paperwork, contracts, problems, etc. for a low fee.
Market Your Home Effectively
Beyond the sign you put on your lawn, you should find effective ways to spread the word about your home. Local buyers can be reached through the newspaper, but don’t forget the importance of website marketing as well in today’s market - for both local and out-of-town buyers. Be sure you include the many buyers who could already be working with a Realtor®, and decide what commission you are willing to pay them for bringing a buyer. Above all, you should be very service minded and make it easy for pre-qualified buyers to view your home. Ensure there is always someone available to answer the phone, pick up messages promptly, and be ready to give qualified prospects a tour of your home as soon as possible.
Remain Objective During a Showing of Your Home
Keep emotion out of the sale of your home, and the best way to do this during a showing is to remain physically in the background. If a prospective buyer says something negative about your home, it is better to counter-balance this point of view by illustrating the positives rather than becoming defensive.
Pre-Qualify Your Prospects
Don’t waste your time entertaining buyers who could never afford your home. Don’t accept an offer unless the buyer’s financing is pre-approved or you may not make it to closing.
Negotiate Effectively and Knowledgeably
There will be many details to resolve before a sale can be considered final: price, terms, inspections, possession date, buyer concerns and objections. Make sure you fully understand the contract you have drawn up so you can in turn explain details and ramifications to the buyer and make any amendments to the sale that are necessary. The contract you use should be thoroughly examined by a professional, either a real estate attorney or a Realtor®. Should you decide to use our services for handling the transaction and paperwork involved, this would be included in our fee.
Don’t Move Out Before you Sell... or stage it after you move
Studies have shown it is usually more difficult to sell a home that is vacant. It tends to look forlorn, forgotten, simply not as appealing. It could even cost you money. If you move, you’re also telling buyers that you have a new home and are motivated to sell fast, which can give them the advantage at the negotiating table. If you move before you sell, consider bringing in furnishings and having it staged.
Know Why You’re Selling
Your reasons for selling will affect everything from your list price to how much time and money you will invest in getting your home ready for sale. Your motivation will help you determine what is more important to you: the money you walk away with, the length of time your property is on the market, or both. Different goals will dictate different strategies. Whatever your reasons, however, keep them to yourself so as not to place yourself at a disadvantage at the negotiating table.
A portion of every transaction donated to HABITAT FOR HUMANITY
HomesMSP.com provides real estate information for Baby Boomers, first-time homebuyers, relocation buyers, and move-up buyers in the Twin Cities metropolitan area of Minneapolis and St. Paul, Minnesota. We also offer resources and services for Baby Boomers moving to Minneapolis - St. Paul Twin Cities Minnesota and people age 55+ in third age transitions and retirement housing transitions, guiding home buyers and sellers through the process of selling and buying a house, townhouse, townhome, condo or coop at any stage in life. Sign up for a free weekly newsletter, get free Twin Cities relocation guides and free homebuyer handbooks. Whether you spell it ‘Realtor’, ‘Relator’, ‘Realator’, ‘Realitor’, ‘Realter’ ‘Realty’, ‘Reality’ or ‘Real Estate’, we’re here to answer your questions and help guide you through the process of buying or selling a home or relocating to the Twin Cities of Minneapolis and St. Paul, MN.