When John Ullman wanted to sell his Portland, Ore. home 20 years ago, he knew he was going to have trouble selling it through conventional channels. “My wife was a potter, and we had a kiln in the backyard,” he recalled. “By anyone’s standards, that’s a liability.”
By anyone’s standards except another potter. So rather than use a local real estate agent, who Ullman was sure would suggest that they spend money to tear out the kiln, he advertised it himself in Ceramics Monthly magazine. He found a buyer. “They even paid us extra for the kiln,” he said. And a side career was born. Ullman, who runs a performing artists management agency, has since sold two other homes by himself.
Learning how to execute a “For Sale by Owner” (or FSBO), said Ullman, isn’t for everyone. It takes a certain “mavericky” type of person, he said, to ignore the real estate agents who will try to convince you that only the pros can navigate the long road to selling a house.
The main reason that people take this on is simple: Homeowners can keep more of the money from home sales if they don’t have to pay real estate agents’ 6 percent commission. But it’s not for everyone, experts warn.
“It’s more work to sell your home without a broker,” said Joanne Cleaver, senior content producer and spokesperson for ForSaleByOwner.com, a site that offers services and advice to homeowners contemplating a FSBO. “But a lot of the work you will need to do whether you use a broker or not. A real estate agent is valuable to help you list the property and show it. But they can’t fix up the house for you or get all your documents in order. If you think that you can handle the marketing, you can think about doing this yourself.”
Experts advise homeowners ask themselves these questions before attempting a home sale by owner:
1. Can you price your home competitively?
A real estate agent knows what homes are selling for in your area, and what buyers are willing to pay. You need to be realistic about how much your home is worth. Determine what a fair price is by doing your research. Check out home values on AOL Real Estate and scroll through the Multiple Listing Service, which is an aggregate listing of homes for sale in a geographical listing. No matter what you think your home is worth, you will only sell it if it’s priced competitively.
One of the most valuable services a real estate agent provides, said Cleaver, is access to the Multiple Listings Service. Only licensed real estate agents can list a home with the MLS. Keep in mind that 93 percent of homebuyers began their search on the Internet, according to the National Association of Realtors. So if you don’t have access to those listings, you’ll need a good strategy.
Claire Celsi, a social media strategist and owner of Public Relations Project, in Des Moines, Iowa, has one. She is hoping to sell her 100-year-old, 3-bedroom, 1-bath home via Twitter. She is offering an incentive to her 2,600 Twitter followers to get the word out about her home: a $500 finder’s fee. She’s also hosting a party for those who live nearby to show people her home and to hand out flyers, and she’s inviting her friends in the media, as well. “I’m hoping this is a unique enough approach that people will take an interest,” she said.
Celsi, a professional marketer, is comfortable in this role. But not everyone is. If you don’t think you can handle this aspect of selling your home you can for a fee, get access to the MLS through sites such as ForSaleByOwner.com.
3. Can you be available?
If you use an agent, an open house is a chance for the sellers to take the afternoon to go to the movies. But if you are doing it by yourself, you need to be present to watch strangers peek into every corner of your house. And open houses are just the beginning. Buyers like to poke around at other times, too, so you will need to determine whether your schedule is flexible enough to be available to that one buyer who might be the one to buy your home.
“It’s a huge time commitment,” said Jaime Uziel, a partner with Sheppard, Rosen, Uziel and Sussman in San Francisco, a firm specializing in real estate law. “If the parties have already found each other — like when a tenant decides to buy from an owner — then I would say, definitely, yes, go ahead and sell your home without a broker. But if you are working a full-time job, it can be a difficult thing to do.”
4. Can you answer the questions?
Those strangers poking around your home are also going to ask tough questions. “You need to be scrupulously honest and clear about what might be wrong with your house,” said Ullman. “You will be sorry if you don’t tell someone about a potential problem.”
Cleaver said the best way to clear up any questions is to assemble a folder with receipts of maintenance and improvements, documentation of when you bought the home and any changes to the title. Not only will it demonstrate to the buyer that your roof really is just two years old, you can “look for any complications that could hold up a sale,” she said. “If you never obtained the proper permits when you finished your basement, now is the time to get them.”
5. Can you negotiate all the forms?
This is where you would do well to hire an expert, namely, a real estate lawyer. While laws vary state by state and city by city, said Uziel, disclosure statements — which reveal information about the home to the buyer — can be complicated and need someone who is familiar with the documents to ensure that they are filled out correctly. In addition, said Uziel, “you want to be sure you have a relatively solid purchase contract. There are so many laws that regulate the purchase of real estate, you want to make sure the contract you are using is a good one. A lot of forms out there don’t cover issues specific to your location.”
6. Can you handle the insults?
You have to remember this is a business transaction, and not take anything a potential buyer says personally. If you are going to do it yourself, you’ve got to let go of people who insult your house. Smile, and realize that someone is going to fall in love with it.
“When I told my father I was selling my house myself he said, ‘Two hundred people might come through a house, but only one can buy it. Forget about the other 199 people’,” he says. Ullman’s father had some experience with selling homes, too. He was a real estate agent.