List Your Home For Sale By Owner Without Getting Burned

Posted by 2010

by Andrea Carniero, posted Aug 11th 2010 8:47PM

When Kira Lewis and her husband sold their first home in Dallas they went the traditional route, Realtor and all. When it came to sell their next home, the pair took one step away from tradition, employing a discount broker and doing much of the work themselves. By the time they got to their third home sale, “we were pretty much experts at the process,” says Lewis. So they took the leap and went solo.

With regular agent commissions around 6 percent of the home sale price, and a market still not up to par, more and more homeowners are eschewing full-service agents and going the “For Sale by Owner” (or FSBO) route for their home sale.

In fact, a National Association of Realtors survey showed that, in 2008, FSBOs accounted for 13 percent of home sales. But though sellers may escape paying commission, a sale by owner isn’t as easy as throwing up a “For Sale” sign and sitting back. So how do you do it? Here are five tips.

1. Know your options
Even if you don’t want to employ a full service agent to sell your home, you can often find either discount brokers willing to work for less of a commission or a listing service that will post your home information to a multiple listing service or MLS, the main database that Realtors use to find homes for sale in their area, for a flat fee. Lewis chose a listing service for her last home sale, giving her the benefits of an MLS without the agent attached.

2. Set a realistic price
Once you’ve decided on a route, do your research on sites like AOL.RealEstate, Zillow and Trulia to see what comparable homes in your area are listing and selling for. Be sure to take into account special features, such as updated kitchens and bathrooms, pools and garages when coming to a final asking price. Online appraisal services can also do the work for you. For example, forsalebyowner.com offers their online valuation report for as little as $18.95.

Quick Tip: Only look at recent area home prices, don’t go any further back than six months.

3. Have someone on your side
If you choose to sell your home completely solo be sure to have at least one expert in your corner. Employing a real estate attorney can save you time and money in the long run. “Get an independent party to review the documents,” says Lewis. “It’s well worth the money.”

4. Be prepared to do the work
A sale by owner isn’t as easy as it may look. Between marketing the home, showing the home, negotiations, contracts and closings, home sales can often become another full-time job.

Lewis, who has a background in marketing, took matters into her own hands, hiring both a photographer and videographer to create a virtual tour of her home for MLS and creating flyers that she then placed underneath the sign in her front yard. She also handled all the showings herself. The benefit? “A lot of the buyers appreciated being able to talk to the owners directly,” says Lewis, “about the neighborhood, the schools, the traffic….”

When it comes to writing actual advertising copy, stay concise and to-the-point, says forsalebyowner.com. Read through other ads in the paper or online and see what works, then highlight the features that set your home apart from the rest.

5. Sellers beware
Even those going the FSBO route may not escape the reach of shady buyers, so protect yourself with a few simple realty agent tricks. Coldwell Banker agent Jan Bronis sold her Miami home on her own, before becoming an agent herself, and advises those going that route to be cautious.

“Always get a phone number before a showing and always find a reason to call the number and be sure it’s real,” she says. Another Realtor tip? Try to make sure buyers are pre-qualified, or have at least met with a mortgage broker prior to showing the home. “A lot of buyers don’t even know what they can afford and may just be wasting your time,” says Bronis.

So after all the marketing and showing and pricing that goes along with being an FSBO seller, is it really worth it to try the home sale yourself? Lewis says maybe. “Don’t do it out of arrogance, ” she says. “Educate yourself. Make sure you know what you’re doing.” Lewis herself ended up selling her last Dallas home in less than three months before making the move to Florida with her family.

As buyers in a new city and a new market, the search for a new home led the Lewises to an old path. They called an agent.