Q: My wife and I are considering selling our house within the next two years. We want to try and sell it ourselves. We think we wont have a problem because homes have been selling so quickly in the past few months.
In our neighborhood, two houses that are the same model as ours recently sold. One house was listed by a local, well-respected real estate company. The company was able to sell the house in four days. This past weekend, my other neighbor put his house on the market by owner. He held an open house on Sunday and sold it the same day.
Our house is even nicer that the two other houses that sold which is why we want to try selling it ourselves.
I know that selling a house in four days is great in any market and my wife and I understand there are no guarantees as to when or if a house will sell.
But we want to give it a try. What is involved in selling a home by owner? What do we need to know?
A: Having sold two homes by owner (we paid a half commission to the buying broker both times), I can tell you there’s nothing better than contemplating how much cash you will save. But selling by owner can be problematic, and you have to be well-prepared for the process.
The good news is that it sounds like you live in a neighborhood where plenty of people want to live. The better news is that it’s easier to sell a property yourself when there is a tremendous amount of interest in the neighborhood.
Here are the basic steps involved in selling your own home: First, determine the appropriate listing price. Since you know what these other homes sold for, you can estimate what would be the right price for your own home.
If you feel like you need some independent confirmation, ask the agent who sold one of the homes to give you a comparative marketing analysis for your property. A CMA will look at the prices at which homes comparable to yours in the neighborhood sold recently.
Although you intend to sell on your own, good agents know that approximately 80 percent of would-be FSBOs fail to sell by owner. They hope that by assisting you in pricing your home, you will turn to them if your attempt to sell by-owner doesn’t work out as planned.
It’s a smart move on your part to cultivate a relationship with a good agent in town. First, you may not wind up selling by owner and will need her help down the line. Second, even if you do sell by owner, you will probably want to buy a replacement property and this agent may be able to assist you in the purchase of your new property as well as help coordinating the timing of your purchase and sale.
Once you have the pricing, you need to advertise the fact that your property is for sale. You should place an ad for an open house in the real estate section of your local newspaper and tell everyone you know that your home is for sale. You might also consider purchasing an ad for your home on one of the FSBO websites.
You also need signage. You can buy “for sale” signage on the Internet or at your local home improvement store.
Although you hope to do this on your own, you should hire a good real estate attorney to help you prepare your documentation and assist you in the transaction.
Finally, just because homes are selling like hotcakes in your neighborhood now doesn’t mean the market will be the same in two years when you are ready to sell. Housing markets can swing from favoring the seller to favoring the buyer rapidly — even overnight in some cases.
If you think you might want to sell in the next two years, and homes are selling quickly now, thinking about whether you should alter your plans to sell now and lock in your profit. If you want to stay in the neighborhood, you can always look for a property to rent.
For more information, pick up a copy of Robert Irwin’s excellent book, The For Sale By Owner Kit, 5th Ed. (Dearborn, $19.95).
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