For some, it’s a foregone conclusion that you’ll hire a Realtor or real estate agent to help you sell your house. However, it’s not the only way to do it. In fact, there are multiple ways and reasons you might want to sell your house yourself. You can list the house on the open market and handle all marketing and negotiations yourself. Or you can sell your house directly to a cash buyer. Whatever you decide, it’s good to have all the information so you can make the most informed decision for yourself.
Why Sell Your House Yourself?
The most obvious reason to go the For Sale By Owner (FSBO) route is to avoid paying real estate commission fees. All markets are different but, on average, you’re going to pay five-to-six percent of the sale price to your Realtor. So, for example, if you sell your house for $300,000, you’ll have to pay a commission of around $18,000.
You might be thinking that it’s not a big deal given you just sold your house for $300,000, but remember that the commission is paid out of your home equity. So even though you sold the house for $300,000, you might have had to pay off a $200,000 mortgage. That means you’re actually netting around $100,000. That $18,000 comes out of that, which leaves you $82,000. That’s still a decent chunk of change but the difference between $82,000 and $100,000 is pretty sizable. And it doesn’t include other closing costs that will drive that number down further.
Of course, another reason is that you find yourself in a situation where you have to sell quickly. You might need to relocate or change locations quickly. You might be dealing with financial issues such as foreclosure or a tax lien. Or you might not want to deal with repairs and problems in the house. In that case, you can deal with a real estate investment company that will make you a fair cash offer and buy the house from you quickly. No need to get real estate agents involved.
If you do decide to sell your house on the open market, there are some critical steps you need to take.
Determine the Value of Your House
Selling a house yourself means you’re going to have to juggle a lot of balls and wear a lot of hats. So the fewer problems you can create for yourself, the better. That means it’s critical to make sure you price the house correctly from the start. If you price it too low, you’ll end up with less cash than you should have made. If you price it too high, you’ll have a house sitting on the market way longer than you want.
There are three ways you can do this, depending on what you’re willing to pay upfront. You can use online valuation websites to help guide you. Use their price and value estimates to get in the right range and then look at how much similar homes in your neighborhood have been selling for in order to see how the perceived value matches the actual value. You could also reach out to a real estate agent to see a competitive market analysis. They will likely do this for free but they’ll also do it under the hope of listing your home as well so expect to get a sales pitch as well.
If you can afford to, you can also hire a licensed appraiser to give you a fairly accurate estimate of your property’s value. Plus, an appraiser’s report is helpful when it’s time to negotiate. It will likely cost between $300 and $500, however. Keep in mind that the mortgage company won’t accept it since you ordered the appraisal yourself, so you’ll need to get a second one from them when it comes time to sell.
Get Your House Sale-Ready
You’re ready to list your house on the open market, so it’s time to take a step back and ask a question. Is this home in prime condition for someone else to look at it and decide they want to live here? If you didn’t live here and you showed up tomorrow, would you buy it?
Every flaw and problem that exists in and around your house is going to be magnified in the sales process, so it’s important to get on it now. The more work you do at this stage, the less likely you’ll have to drop the price later on or handle costly repairs yourself in order to appease the buyer’s demands.
In the house, make any and all minor repairs you can. Everything from a leaky faucet to sticky windows to bad electric outlets. It’s one thing for you to suck it up and deal with a faulty dishwasher or garage door opener that doesn’t always work, but you don’t want to give buyers that as a reason to consider another house where it all works.
It’s an ideal time to consider a fresh coat of paint and tone down any loud colors with something more neutral. You’ll also want to do some decluttering, not just in the obvious areas. Get in the attic, basement, and garage, and give them all a good clean.
Outside, you want the curb appeal to be as enticing as it can be. That means power-washing the exterior, doing some landscaping, mowing the lawn, painting fences, and anything else that will make potential buyers slow down and take notice.
Market Your Home
You can’t just count on curb appeal and word-of-mouth to move your house. Whereas a real estate agent would typically handle such things, you’re going to have to do all the marketing to make sure your house is as high-profile as it can be.
That means investing in yard signs and placing them in high visibility areas, creating brochures in the house and to be handed out in the community, advertising the house online via popular real estate sites, and hosting your own open house. All of these things that a lot of planning and preparation. They’ll also cost money, depending on how much you want to invest in marketing and advertising efforts.
Negotiation & Closing
Once you get potential buyers interested in your house, it’s time to start negotiations. A real estate agent would normally be the intermediary for these kinds of things, but in a For Sale By Owner sale, it’s up to you. The buyer (or buyer’s agent) is likely to come in lower than your asking price, so it’s going to be a give-and-take to find the place where both parties feel comfortable with the final sale price. Of course, you also have to be firm enough to be able to walk away if the buyer isn’t willing to meet your minimum goals.
Once you’ve negotiated a price, it’s time to put it all on paper to make it legal. The contract will need to spell out all of the details and specifics that are a part of the deal. That includes the purchase price, any contingencies, buyer and seller concessions, the closing date, and the location of the closing.
Depending on where you live, there might be specific laws about where the closing needs to take place. The good news is that a closing agent will be involved to help handle many of these details, though you’ll be expected to be able to provide whatever information or fees are needed. There will be closing costs to pay for, though the specific amount will be determined by the negotiations of the sale as well as state and local laws.
You Can Always Sell Quickly for Cash
If all of that sounds like a lot and you don’t want to deal with the hassle, time involved or upfront costs, consider selling your house as-is to a real estate investment company like Nexus Homebuyers. You won’t need to make repairs or declutter the house. You won’t need to pay for any marketing or advertising costs. You won’t have to deal with Realtor commissions or make any concessions. You and the investment company agree on a price and closing date, they pay you in cash, and you can move on to the next step in your life.
Whichever way you decide to sell your house, just make sure you do your research so you do it the way that makes sense for you.