Why Not Go FSBO?
You're getting ready to offer your house for sale. Should you list with a Realtor, or should you try to go For Sale by Owner?
The answer depends a lot upon your other time constraints and your personality.
When you offer your house as a FSBO you need to be available at all times to show it. That means daytime, evenings, and week-ends. If you have a "Home for Sale" sign out in the yard it means that people could knock on your door without warning, so the house needs to be in showing condition at all times.
You'll also have to do plenty of research in order to learn the best price to quote. Too high and you'll be ignored. Too low and you'll give away your equity. Be careful… don't believe all the prices you'll hear, because just like gossip, selling prices tend to change each time they're repeated.
Attend open houses and compare yours to others on the market. Check their asking prices and find out how long the house has been for sale. If the price is correct, and the market is active, it should not remain for sale for long.
If that part is convenient for you, the next thing to consider is your personality and your willingness to do the work associated with showing, negotiating, and attending to closing details. But let's start at the beginning.
The first hurdle is negotiating, and that begins with the showing. When you show the house yourself you have to be very careful about what you say. If you aren't, you could give away a motive for selling that will give buyers an upper hand in negotiations.
Conversely, you could be privy to information that could give you an upper hand. If the buyers shout "I love this house, I have to have it," then you'll know you have a strong position.
Next, you have to develop a thick skin. Buyers are notorious for knocking down a house in order to lower the price. You have to be immune to those comments and not take them personally. Do your best not to become angry, because communications will fail completely if you do.
You also have to learn to be firm but polite. If you don't want muddy shoes in the house you'll have to say so without offending. If the buyers bring along children who want to get into everything, you'll need to correct them or follow them around. Can you politely ask parents to rein in their kids?
When the people indicate that they are making an offer, you'll need to furnish them with your legal description, because no property document is valid without it.
Some people will try to get you to respond verbally before they ever put an offer in writing. Resist the temptation to answer a verbal offer. Tell them gently that you'll consider it after you see all the details in writing.
Remember that an offer of $100,000 cash is far different from an offer of $100,000 with the seller paying all the closing costs. If you've agreed to a price without seeing all the details, you may have to change your mind. Then there will be hard feelings and the transaction may fail completely.
If the buyers come back with a written offer, make sure it allows you at least a day (preferably more) in which to respond. Don't be pressured into an instant decision.
Once you have agreed upon a price and terms, you'll have to arrange for the inspections. If your buyers are obtaining a loan, you'll also have to order the appraisal. Next you'll need to agree on a closing agent and get all the proper paperwork to that agent. The agent may order a title report or may expect you to furnish it. Find out.
If problems appear on your title report, it will be up to you to solve them prior to closing. Ideally, you will have done this before offering the house for sale.
If your buyers are ordering a home inspection you should expect to be asked to fix something. It appears to be a rule that all inspectors will find something you need to do. It could be as small as replacing a faucet washer or as large as adding insulation to the attic. Be prepared for another round of negotiating when the report comes back.
It will also fall upon you to give the buyers a list of names and phone numbers they need to call to have utilities put into their names.
If you have the time, the organizational ability, and the personality to deal with buyers, then offering your home For Sale by Owner may be realistic for you. If not, find a good agent and let him or her do the work.
Click here to contact me if you have any questions.
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