For Sale By Owner advice?

[PintOfBitter]

Wellll, we're leaving town. Laid off and no jobs in Wichita. On to new and different things, I guess.

I'd like to sell my home by owner to avoid the fees of a sellers agent. I know the benefits of using an agent, but I've researched and talked to friends who have FSBO'd and am pretty confident I will go that route.

Anybody FSBO'd a house and learned any valuable lessons? I've read a lot of "tips" but this is a forum full of people who are obviously not afraid to try something most people don't think can be done. I'm expecting there will be quite a few here that have sold a house this way.

 

[hayabusa]

two big ones that come to mind..

a) realtor's ensure the buyers are qualified - remember they only get paid if it sells so they are not going to waste their time.

b) contract negotiation. Realtors are trained in executing contracts (or have a support office). The contracts are pretty complex if you are not a legal-minded person and requires attorneys, title or escrow agencies, and notaries... you can do this but are at increased risk of making a mistake... Realtors are paid based on profit - they want it to sell for the most amount of money possible; they work on references and again, are driven to do you right....

Personally i'd pay for the piece of mind of using a realtor but that's becuase I don't trust myself to get it all right since I am not in the real estate market - if you have the time, patience and understanding to get it done then I would do it as you could potentially yield ~10,000 that would have otherwise been commission.

good luck

 

[david_42]

I'll never use an agent to sell a house again.

Selling is simple, as there are only one or two documents required to transfer the title. Most of the rest is CYA for the agents.

Escrow agents are easy to work with and qualification for a mortgage is the bank's problem.

Despite licensing requirements, most realestate agents have absolutely no idea what they are doing. They work from a checklist and demand documents that are unnecessary (see CYA) to jack their fees up.

You can't avoid paying the buyer's agent, but I saved almost $13K selling my last place. Not too bad for a few weekends work.

 

[rsmith179]

Never sold a house FSBO before, but have bought a house. One thing I noticed when looking for houses was the fact that the FSBO houses were never listed on realty websites. I guess that's one of the downfalls of selling on your own. If possible, I would really try to get your house listed on MLS. This will allow agents/buyers to view your house along with others being sold by agents. I can't tell you how many houses we simply did not look at because there was no MLS information regarding the property on the sites we were researching houses through.

 

[MNBugeater]

Sold our last house a little over a year ago, FSBO.

Here is what we did and some lessons learned:

1) Pay a title company to do ALL the paperwork. Depending on your area costs I am sure will vary, but our sellers costs to the title company were about $750ish. This covers title transfer, court filing fees, title audit, clean and clear, etc.

2) Have an inspection done YOURSELF. Your buyer and/or buyer lender will have one done also, but you need to know BEFORE that is done what MIGHT come up

3) If you are in the country area or have land, get a well and septic test performed to make sure they are functional.

Lessons Learned

1) Don't sell it to someone you know

2) It is perfectly legal to sell your property if something does NOT meed code. Example:
- Evidently our septic system didnt meet code at the time of the sale (unbeknown to us). The buyer came back and sued us saying we had to sell him a system that meet code. 8 months of court battles and $10,000 in court fees later the judge said there is nothing on the books saying a title cannot transfer legally just because something doesn't meet code AND it is not the sellers responsibility to inspect the house and validate code status prior to transferring a title. Buyer was trying to get us to pay for a new septic system. Judge said "You didn't buy a new septic system, you bought a used one that was 20 years old".

 

[srm775]

b) contract negotiation. Realtors are trained in executing contracts (or have a support office). The contracts are pretty complex if you are not a legal-minded person and requires attorneys, title or escrow agencies, and notaries... you can do this but are at increased risk of making a mistake... Realtors are paid based on profit - they want it to sell for the most amount of money possible; they work on references and again, are driven to do you right....

That's gotta be the biggest crock I've ever heard. I have bought two houses and sold one, and my realtor's were, I'm pretty certain, mildly retarded. Realtors, in my opinion, don't give a crap about any of that. Most of them are either too lazy or too stupid do anything besides work in an industry where they essentially have a monopoly. You'll need to hire a lawyer anyways, so you might as well have them actually work.

Back on topic: Advertise, advertise and advertise. Print up flyers (microsoft has realestate templates for free), post ads on Craigslist and post ads in local paper and anywhere else you can think of.

Also, do the normal stuff you'd do to sell a house (like fresh paint where it needs it, de-clutter your house, clean, clean, clean).

 

[caver95]

As a Realtor, you should think about moving to Tallahassee Florida...I have a great house that has I really nice prospective brew house.
Use a title agency, you can find a broker that will list your house to get it in the MLS for $300-500 this should get it on realtor.com Use craigslist.com take lots of pictures make a website for your house. Also pay a broker for a Comparative market analysisYou must disclose every(wood rot, termites) issues that you know of. provide a commission to a selling broker. Pay some closing costs, hold a note if you have the equity and are comfotible with it. try to be in the upper 3rd if quality and lower 3rd of price. Most People dont have vision so go to a model house, try to make your house like that, get rid of the pictures of your family, paint the rooms something nuetral if they are something like :fro:. Hide your brewing equipment so a prospect does not think you are cooking meth. and learn the difference between a prospect and a suspect and make a few batchs of something strong cause your going to need it.

 

[MNBugeater]

That's gotta be the biggest crock I've ever heard. I have bought two houses and sold one, and my realtor's were, I'm pretty certain, mildly retarded. Realtors, in my opinion, don't give a crap about any of that. Most of them are either too lazy or too stupid do anything besides work in an industry where they essentially have a monopoly. You'll need to hire a lawyer anyways, so you might as well have them actually work.

Some economic theory on Realtors...

How Much Is a Realtor Worth? - Freakonomics Blog - NYTimes.com

Wired 13.05: Cracking the Real Estate Code

This is a small snippet from the second link summarizing the incentive of the realtor...

What is the agent's incentive when selling her own home? Simple: to make the best deal possible. Presumably, this is also her incentive when selling your home; after all, her commission is based on the sale price. And so your incentive and the agent's incentive would seem to be nicely aligned. But commissions aren't as simple as they seem. First of all, a 6 percent commission is typically split between the seller's agent and the buyer's. Each agent then kicks back half of her take to her agency. Which means that only 1.5 percent of the purchase price goes directly into your agent's pocket.

So on the sale of your $300,000 house, her personal take of the $18,000 commission is $4,500. Still not bad, you say. But what if the house was worth more than $300,000? What if, with a little more effort and patience, she could have sold it for $310,000? After the commission, that puts an additional $9,400 in your pocket. Yet the agent's additional share - her personal 1.5 percent - is a mere $150. So maybe your incentives aren't aligned after all. Is the agent willing to put out all that extra time and energy for just $150?

 

[TxBrew]

I would never use a Real estate agent to buy/sell a home. Only place I think they are nice is CRE because they can find properties for you before they hit the market.

 

[caver95]

So you have established you dont like real estate agents, if you find a house that is listed it dont call the sign, I am sure everyone has a friend that is a realtor, Call your friend. In florida as a selling agent I can gift 1/2 the commission to you(if you were not going to use anyone I would be happy to split it with you if I had to do nothing) but it is better than giving it all to the listing agent. You will not get a better deal, and it will not cost you anything the commission is paid buy the seller and was agreed upon by the seller before there was a sign in the ground. Its a shame there are sooooo manyy bad REALTORS outthere, but many are getting out because they cant prove to be a value to their clients. People seem to think they can get a better deal going FSBO, you might or might get hosed. The deal with having a GOOD REALTOR is we have contacts mortgage brokers, title agents, appraisors, other agents that specialize in areas that they have been working for years that know just about everyone in the area, and Yes i have gotten steals on houses because of working an area. A Broker really should be able to help a client not just list and pray. But then again most of my clients make more money doing what they do, and I just bring them deals.

 

[srm775]

People seem to think they can get a better deal going FSBO, you might or might get hosed. The deal with having a GOOD REALTOR is we have contacts mortgage brokers, title agents, appraisors, other agents that specialize in areas that they have been working for years that know just about everyone in the area, and Yes i have gotten steals on houses because of working an area. A Broker really should be able to help a client not just list and pray. But then again most of my clients make more money doing what they do, and I just bring them deals.

Mortgage broker? Really? You can throw a stone and hit a dozen of them. Go through your bank or your local credit union. Property appraisals are done by the prospective mortgage company, whoever that may be (has nothing to do with the real estate agent). Home inspectors, I've found, are completely worthless, but any recommended home inspector is even more worthless since they're probably giving a kickback to the agent. In Illinois, all closings, I believe, are done at a title company. They hold the funds in escrow and distribute them as appropriate.

 

[caver95]

Mortgage broker? Really? You can throw a stone and hit a dozen of them. Go through your bank or your local credit union. Property appraisals are done by the prospective mortgage company, whoever that may be (has nothing to do with the real estate agent).

REALLY??? funny how many times I have given the mortgage company the number to a few appraisors.

So then how will you know what to ask for your home? Are you going to pull it off zillow, or out of thin air? You dont have to listen to my advice. So good luck.

 

[jgln]

Never sold but brought two homes. I am not saying I wouldn't look at buying a by owner home just that I am not comfortable dealing directly with a homeowner when buying a home. My guess is as a buyer you gain nothing by buying from an owner directly as any savings they are making by selling it themselves is going into their pocket. It is not like they are going to drop the selling price for you because they are saving money. So as a buyer I'd prefer a realtor to do the work for me. So from that perspective you may get fewer inquiries and less people feeling comfortable with the deal.

 

[srm775]

So then how will you know what to ask for your home? Are you going to pull it off zillow, or out of thin air? You dont have to listen to my advice. So good luck.

It's easy to find out pricing for your home. Home sales is public information. Not to mention easy to find. Search craigslist, local papers and local real estate agency websites for similar models (sq. ft and features) that are currently listed and that have sold. For ones that are currently listed, go just a bit under (say 5,000-6,000) for ones that have sold go about 10% over (expecting to settle on a price 10% less than what you ask). This is all any real estate agent I've ever interviewed or worked with did. It's not hard and will give you a good start for what to ask and what to expect.

Not to mention, I think that FSBO places give you ways to figure asking price and settling price when you sign up.

 

[caver95]

Not to mention, I think that FSBO places give you ways to figure asking price and settling price when you sign up.

FSBO places? For Sale By Owner, mean going it alone, when you pay someone you are paying for there advice, listing it, or what ever. So that is not really FSBO even thou someone trademarked or registared the name, they are really a discount brokerage house. Becareful when you dealing with them they can nickel and dime you on a listing.

Tax records are good, but you should also be able to see what is under contract, in my experience ( I live in a small county) they are very slow about inputing things, it has taken months for properties I have sold to hit the website then may have the wrong info, but you can always try to find the docs to go along with it.

 

[MNBugeater]

So then how will you know what to ask for your home? Are you going to pull it off zillow, or out of thin air? You dont have to listen to my advice. So good luck.

The same way realtors know what to ask for your home. The market sales prices are all public record.

 

[MNBugeater]

I think a general consensus for any rational person is that there is a huge value disconnect. Does it REALLY cost a realtor $18,000 - $20,000 to sell my $300,000 house? What exactly is a realtor doing for me that I feel paying $18,000 commission is "worth it"? Did I get $18,000 of benefit from that person? Highly doubtful.

 

[caver95]

The same way realtors know what to ask for your home. The market sales prices are all public record.

All I can say is good luck with that. Here is a little homework for you go value your house like that then call a REALTOR tell him you are thinking of selling and want a CMA. See who comes up with what and why. Then tell him your not selling some jerk in FL put you up to it.

 

[srm775]

FSBO places? For Sale By Owner, mean going it alone, when you pay someone you are paying for there advice, listing it, or what ever. So that is not really FSBO even thou someone trademarked or registared the name, they are really a discount brokerage house. Becareful when you dealing with them they can nickel and dime you on a listing.

I assumed he meant something like ForSaleByOwner.com or ByOwner or any one of the dozen other websites/companies that offer listing and sales help for homeowners.

 

[caver95]

I assumed he meant something like ForSaleByOwner.com or ByOwner or any one of the dozen other websites/companies that offer listing and sales help for homeowners.

If it was 3 years ago when one could put a sign in the front yard and have 4 offers by dinner I would agree with you. but it is a buyers market. So go ahead pay your money up front then is 6 months your wife or you get fed up with dealing with dreamers and people standing you up and you will hire a broker. so then it will only cost you 18899.00 I sold 1.2 million last year working part time mostly preforclosure stuff. i get listings in this market from people who spent the money on Forsalebyowner.com but like I said before, good luck.

 

[Brewer_Steve]

All I can say is good luck with that. Here is a little homework for you go value your house like that then call a REALTOR tell him you are thinking of selling and want a CMA. See who comes up with what and why. Then tell him your not selling some jerk in FL put you up to it.

My friend is a realtor.
While I agree with some of the posts about realtors being overrated, they also are able to offer value. Many people like me are clueless when it comes to things like home staging. A realtor can help or point you to someone who can help.

I have to call BS on the CMA though.... When I asked my realtor friend about CMA, he said it's just a fancy name for looking at what similar homes in the neighborhood have sold for, look at what's available, and then assigning a "gut feel" price. Sorry, but that isn't rocket science.

Realtors have helped me with some stuff that I wouldn't have thought of on my own, but pretty much anyone can quite easily do a CMA in a matter of minutes.

 

[caver95]

I have to call BS on the CMA though.... When I asked my realtor friend about CMA, he said it's just a fancy name for looking at what similar homes in the neighborhood have sold for, look at what's available, and then assigning a "gut feel" price. Sorry, but that isn't rocket science.

Realtors have helped me with some stuff that I wouldn't have thought of on my own, but pretty much anyone can quite easily do a CMA in a matter of minutes.

a lay person giving a gut feel house price would come out about as well as me give a gut feel beer recipe. sold 15 proerties last year. the average person moves every 6 years. so if you want to gut feel a price for yourself go for it.

 

[jgln]

Mortgage broker? Really? You can throw a stone and hit a dozen of them. Go through your bank or your local credit union. Property appraisals are done by the prospective mortgage company, whoever that may be (has nothing to do with the real estate agent). Home inspectors, I've found, are completely worthless, but any recommended home inspector is even more worthless since they're probably giving a kickback to the agent. In Illinois, all closings, I believe, are done at a title company. They hold the funds in escrow and distribute them as appropriate.

Somewhat agree with that but they don't cost all that much and if you don't feel comfortable with crawling around someone's home and making sure all their systems are in working order they are worth it. Ours went through the whole house with me showing me what he found and wrote up a nice report that I was able to use to get the homeowner to do some repairs. Some things he pointed out I would have not even thought of. He even filled the hot tub to make sure it worked properly and did not backup the septic system. He had no problem asking the owners questions and later telling me in private he was second guessing their reply and why. Overall he said it was in excellent shape and so far has been.
But yeah, I don't believe they need a license to prove they know how to do an inspection and take no responsibility for what they don't catch.

 

[BioBeing]

I've sold 2 houses by owner, in better times. I'm sure it going to be harder right now, but not impossible.

My advise is to watch all the staging shows on Home and Garden TV. Seriously. Make sure your home is clean, tidy, neutral, and buyers get a sense of purpose for each room.

Have open houses. Lots of them. Advertise locally. Get a website with photos.

Co-op. That means be willing to pay a buying agent. We offered two prices on our houses: one if the buyer wasn't using an agent; a second for if they were. That way, we could show that they were getting savings too if they chose not to, or what it would cost if they did.

Advertise. Did I say that already?

We purchased forms from Home selling tips, real estate forms and contracts plus everything else to sell your own house - Audrie.com. They have lots of good info too.

 

[jgln]

I think a general consensus for any rational person is that there is a huge value disconnect. Does it REALLY cost a realtor $18,000 - $20,000 to sell my $300,000 house? What exactly is a realtor doing for me that I feel paying $18,000 commission is "worth it"? Did I get $18,000 of benefit from that person? Highly doubtful.

Agreed, they make a nice profit off selling a home but that 6% is not all theirs unless they are also the buyer’s realtor, otherwise they split (maybe not 50/50) the percentage. One gets something for marketing your home and the other for bringing a buyer to you.
I don't envy realtors much. They depend on the sale to make money and work funky hours to suit the buyer and seller’s hours. Good luck being a realtor that only shows houses 9-5 M-F. My neighbor's house has been for sale over a year. Started out with a realtor, then tried themselves, now are on 3rd realtor. Each realtor put in many hours showing that house, answering questions and all that crap and got little or nothing for it.

 

[jgln]

I've sold 2 houses by owner, in better times. I'm sure it going to be harder right now, but not impossible.

My advise is to watch all the staging shows on Home and Garden TV. Seriously. Make sure your home is clean, tidy, neutral, and buyers get a sense of purpose for each room.
Have open houses. Lots of them. Advertise locally. Get a website with photos.

Co-op. That means be willing to pay a buying agent. We offered two prices on our houses: one if the buyer wasn't using an agent; a second for if they were. That way, we could show that they were getting savings too if they chose not to, or what it would cost if they did.

Advertise. Did I say that already?

We purchased forms from Home selling tips, real estate forms and contracts plus everything else to sell your own house - Audrie.com. They have lots of good info too.

Couldn't agree with that statement more. But it is a shame so many people can't see past someone else's stuff or what THEY did with the house instead of what THEY can do with it. I mean seriously, I have seen on those shows where people got turned off on the color of a room. When we were house shopping a clean house definitely made a good impression but I could easily see past the junked up houses and imagine them empty. Have to visualize what it will look like with them out and you in.

 

[bluehouse]

Used to be a realtor. Have bought & sold many homes, and commercial properties.
1. Not all agents are realtors. Realtors list on an MLS system in a large metro area, this is a good thing & worth some money, in a small area not so much.
2. If you are emotionaly attached to the property or thin skinned FSBO is hard to do, guy comes along and insults your prize roses and now you lose sight of the prize of selling because your feelings are hurt.
3. If you treat the house like a business FSBO is easy to do. Set up your plan before you put the house on the market, follow your plan. Have a title company lined up in advance. If possible met your closing assitant in advance and ask for help and copies of standard contracts that their other FSBO sellers use they will normally give these to you because you will be paying them later.
4. Have an inspection or appraisal before you show your home
5. Have an as is clause in your contract. The house is sold as is and you have disclosed to the best or your knowledge any possible issues and are not going to fix them.
6. Have a PDF version of a flyer with all the details that you want to provide made up, offer to email them to every prospect. Tell them that when they have fianancing in place you will meet with them further. Do not meet with them unless they have a letter from a lender.
Last year we sold our house FSBO for 29K more than the local realtor thought it was worth. We did our dilligence, paid for a $350 appraisal and made 29K + 6% more than we would if we had relied on that realtor.

 

[PintOfBitter]

Great advice guys, thanks. I bought with a realtor before, but this is our first house, so I don't know the selling process very well. I have bright colors throughout the house, the kids room is even painted plaid.... Supposedly, in springtime, color sells, but I may need to throw up some paint. My wife and mother in law don't think it's necessary, but our interior paint scheme is definitely among the most colorful I've seen.

I'm thinking the lawn is one of the most important things to fix up right now, it's in terrible shape.

Anybody use one of the forsalebyowner.com type sites, if so, what's your opinion?