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hollynla

Selling by owner

hollynla
9 years ago

We would like to try listing by owner before using a real estate agent being that would could save 20K+ commission. I have an idea of a way I'd like to take on the process but I'd like some opinions on it. I would list the house myself on some by owner sites, newspaper, craigslist, etc. For anyone who would like a viewing, I'd let them view on their own and then afterwards, let us guide them around and answer any questions. I'd provide each viewer with a handout stating how they can make offers. I was thinking negotiations can be done through email, with the potential buy making an offer and including any contingencies. Once we agree on a price, meet with a lawyer to draw up the purchase agreement that the buyer could then provide to their mortgage company.

Does this sound okay? When we bought this house 9 years ago, it was a by owner deal and I was shocked at how easy the process was. Once we provided the purchase agreement to our mortgage company, that was it, the mortgage company handled everything else after that point. It was a breeze.

We plan on listing it by owner about 6 months before we'd try a realtor. Any tips and advice is appreciated.

Comments (19)

  • jewelisfabulous
    9 years ago

    Two concerns with your method:

    1. How will you weed-out looky-loos from qualified buyers and how will you pre-qualify the buyers before allowing them access to your home?

    2) Keep in mind that some buyers would prefer to conduct negotiations face to face or over the phone or even by text, so be prepared that it won't happen on email.

  • c9pilot
    9 years ago

    " For anyone who would like a viewing, I'd let them view on their own "

    This has too much potential for trouble right here. You probably want to use some sort of screening (ie pre-qualified or proof-of-funds) so that not "anyone" can walk freely through your home. Remember you are liable for anything that happens to them.

    And, there is what might happen to YOU, your home, and your belongings without supervision. Even Realtors are getting antsy about showing homes to strangers these days and take many precautions because there have been far too many bad incidents up to and including murders. You'll find that many sellers are now requiring their listing agent (or a representative from the office) to be present at showings, and of course the buyer's agent will bring them - security in numbers. Too many back doors have been left unlocked, water running, etc - that's just the minor stuff.

    You will need to have the same diligence that any seller would have during a showing, whether there is a Realtor present or not. There are plenty of threads on this forum that discuss valuables such as jewelry, weapons and keys, privacy info such as computer logged on, and medications in your bathroom.

    I'm sure many more will chime in on the actual FSBO process, but since September is Realtor Safety Month, it's the forefront in my mind right now.

  • hollynla
    Original Author
    9 years ago

    I'd probably ask for a letter of pre-qualification from their mortgage company to weed those out.

    As for 2., is it a good idea to go negotiations face to face? I'm sure any negotiation would need to be discussed privately on both sides. I can see text being an option.

  • rrah
    9 years ago

    I don't think you need to make a decision about the method or tools that will be used to negotiate. Provide your # and email address. It they are interested, they will figure it out.

    By "let them view on their own" what do you mean exactly. If you mean you will let them in the door, tell them you will be on the patio or in the yard (or whatever works) for their questions, than I would say "okay." If you mean you give them free access to your house, you need to rethink that.

    You don't mention a plan for handling those working with an agent? What will you do if an agent calls with a buyer?

    I would suggest you read the threads here on FSBO. It's not always easy.

    This post was edited by rrah on Mon, Sep 15, 14 at 14:35

  • hollynla
    Original Author
    9 years ago

    What I meant by letting them view on their own, was that we'd step outside and let them look and then be available for questions. So far, you have given me many other things to consider too.

    As for buyers agents, is it appropriate to offer to pay their commission which would generally be half? That would be minimum $10K for us so I'm not sure I'd be interested in doing that. I guess I figure if I'm going to shell out commission to anyone for the sale, I'd rather do it when one is representing us as well and I didn't have to do the leg work for marketing.

  • jewelisfabulous
    9 years ago

    Some FSBO sellers offer a percentage to the agent that brings the buyer. Others take the position that the buyer needs to pay the agent themselves.

    In the latter, the buyer just ends up taking the commission owed into consideration when making the offer, so you as the seller really aren't any further ahead doing it that way.

    Regarding #2, it's not something in which you will be in control. You'll have to be flexible based on your buyer's preferences. If he/she wants to sit at the kitchen table and hash out the deal, what are you going to do? Say "No, you have to email or text me instead"?

  • hollynla
    Original Author
    9 years ago

    If we list by owner, we would list below market value to hopefully sell quicker so paying the buyer's agent would not allow us the room for negotiations.

    Jewel, yes I do understand what you're saying. I would be flexible with how the potential buyer wants to do negotiations. Heck, if it's a good offer, they can write it on a napkin. :)

  • ncrealestateguy
    9 years ago

    Negotiating verbally is fine... but do it after the buyer has submitted you an offer on paper. There is a lot more detail to an offer than just price. You want to know the entire picture when receiving an offer before you start negotiating it verbally.
    IMO, you need to ask for a Pre Qualification Letter or Proof Of Funds letter before showing the property.

  • _sophiewheeler
    9 years ago

    If it's not on the MLS, and you are not offering a realtor a % to bring a buyer, expect that FSBO period to expire without a single serious showing. Maybe the neighbors doing looky lous would be about it.

  • gyr_falcon
    9 years ago

    I would ask for pre-Approved information instead of a simple pre-qualified letter. Pre-qualified only goes by the unverified information given to the lender; sometimes it doesn't even involve a credit check. Pre-approval means tax returns for two years have been submitted and a credit check has been done. It is a much stronger document. There is also a time limit attached to the approval period, so they are much more likely to be serious about purchasing a home in the immediate future. If their house search extends beyond the approval dates, they have to submit current financial information to receive a new approval letter.

    Here is a link that might be useful: Pre-qualified vs pre-approved

  • hollynla
    Original Author
    9 years ago

    Thank you all for the info, it's been very helpful. I spent several hours yesterday reading about selling by owner and now I'm hesitating that it will work for us. The reason is that I consider my house a hard sell in the area, mostly because the price will be very high for the area due to size and there are no comps. The house is very large on acreage which makes it in a high price than average for the area even when we price it below market value. With a narrowed group of buyers, I'm now considering going with an agent.

    I have begun doing things around the house to make it show better like painting in more neutral colors, fixing minor things, etc. The house does show very well as it is very eye catching due to the style so we are really playing off of those aspects. I'm doing little by little and getting ideas.

  • ryseryse_2004
    9 years ago

    We currently have two properties on the market but one is under contract. The under contract is with a Realtor but the buyer came from us (through a neighbor). No Realtor ever showed the property even though it was in the MLS. So the Realtor is earning a commission and did nothing except a put out a small cost for ads and MLS. (which still shows winter pictures!)

    The other property (our home with 18 acres) isn't listed with a Realtor but is on Craig's List, and Zillow. Zillow is great and is free. We have had showings of interested and qualified buyers and lots of viewings on the websites. We also have our own website which has many more pictures and info and is referenced in the Zillow and Craig's List ads. For us, the 'not listed' is far superior and of course we save a commission.

  • nosoccermom
    9 years ago

    I've been looking to a buy a FSBO property (cash), but have to say that what few FSBo properties there are are all hopelessly overpriced.

  • mareda
    9 years ago

    I would just add you should remove all valuables from all places like drawers, closets, basements, etc. Box them up and put them in storage or ask a friend if they have space to store them.

    If you are alone when someone comes without an agent, do not go upstairs or to the basement with them. Hang around the front door or stand out on the porch with phone in hand as though you're waiting for a call. I know that sounds over the top, but this advice came to me from an agent. And I live in one of the safest communities in the country according to a recent study.

    Don't use your phone number, get an 800 number from evoice which has a free trial for a month.

    Ask three local agents for a CMA and price it lower than the lowest if you're in a hurry to get out.

    Run an ad in Craigslist and forget running one in local papers because nobody looks there any more and it will be a waste of money.

    Pay to get your house listed on the mls because that's the only source used by agents and odds are you're going to sell to someone using an agent.

    Have a sign made for your front lawn and if you're putting together a website, consider putting that on the sign if there is room.

    Offer agents whatever the going rate is in your area - 2.5 or 3 percent typically. Make sure that's noted on all sites.

    Photo's have to look professional. Don't use your cell phone to take them.

    Get a lockbox to hang from your front door and disappear about 20 minutes before the showing.

    If you're working with a real estate atty, make that known.

    In doing my own research to sell FSBO I learned the biggest issue agents have with FSBO is they often get stuck doing more work than they would if the seller used an agent, sellers often over price their homes, homeowners aren't willing to pay any commission or want to lowball it, and homeowners stick around when the house is being shown. All of these are bad.

    I decided to try selling myself because I'm in a highly coveted area due to the school district and homes sell on average in 60 days rather easily. If you already know you're going to have a tough property to sell, I don't think I'd go the FSBO route. Better to leave that to the experts.

    Good luck!

  • SaltiDawg
    9 years ago

    "If it's not on the MLS, and you are not offering a realtor a % to bring a buyer, expect that FSBO period to expire without a single serious showing. Maybe the neighbors doing looky lous would be about it."

    Not true at all.

    I have bought two homes FSBO and sold one FSBO - no MLS nor Agent involved in either sale. The process can be frustrating and might take additional effort on the part of the seller, but the potential rewards can be great.

    I don't understand how you can dismiss a process that is used across the country - FSBO.

    This post was edited by saltidawg on Fri, Sep 26, 14 at 15:25

  • rwiegand
    9 years ago

    We sold two houses by FSBO (one of those was essentially by accident), and in a down market sold one using an agent.

    I thought the agent was well worth her commission in bringing us good buyers in a really rotten market and helping us to position the house well. In much better markets an agent would have added little. We set pricing for our FSBOs based on an appraisal and our evaluation of comps and had an attorney who handled all the paperwork. A smooth and relatively straightforward process that resulted in deals we were happy with. The time wasters are just a cost of doing business, and if you are only selling one house not worth trying to weed out.

  • lascatx
    9 years ago

    If your home is different from the norm in an area, I think you are right that it is a situation where a realtor can help you market the property to it's best advantage.

    A good agent is worth their fee. Last real estate transaction I was involve in was my dad's house. Had a offer the first day an a few more before he accepted a full price cash offer in the first week. That's the kind of sale that makes it sound too easy to justify the commission, right? Wrong. She earned every penny and I am still grateful to her. She made it look easy, but there was a lot of skill involved and she made my life and my dad's easier. A pro is worth it. Just make sure you get a pro. ;)

  • Mmmbeeer
    9 years ago

    "If it's not on the MLS, and you are not offering a realtor a % to bring a buyer, expect that FSBO period to expire without a single serious showing. Maybe the neighbors doing looky lous would be about it."

    Oh, gosh, I haven't found this to be true at all. We seem to have a system that works for us and now that we are able to direct potential buyers to sites like Zillow, it's easier than it's ever been in the past. That being said, however, we have always been sure to put a lot of thought into marketing, neutralizing our home, decluttering, having proper signage, holding all weekend Open Houses, underpricing our home to make it look more attractive since we don't have to pay a commission etc. Trust me, if your home looks like a genuine deal compared to the competition, they will find it.