It is beyond my wildest expectations: our house was listed during Monday night and was gone by Wednesday morning! During the period, 10 families toured our house, and 4 were bidding for it -- it was finally sold at $420,000, with buyer paying all commissions on top of that, with no home inspection contingency and no financing contingency!
Before you question whether I left some money on the table, let me explain that even I was running this as for-sale-by-owner, I did take advantage of some free "competitive market analysis" offers from local realtors before pricing my house. Most realtors quoted me $420,000, and of course, with the 6% commission baked into it. $420,000 itself actually already represented 5% hike from recent sales of two identical houses four months ago at $400,000 (we live in a newly developed community with lots of similar/identical houses as reference points).
To have an apple-to-apple comparison between the recent sales and the deal I grabbed, we are talking about my net of $420,000 (before excise tax and closing costs) and about $380,000 from recent sales after taking out 6% sales commission. 10% jump in a matter of several months isn't bad at all!
I'll be summarizing some tips for future FSBO sellers, but let me share some observations from the hectic 42 hours between listing and signing the dotted line:
- It is totally a seller's market. There is extremely low inventory -- in the city I'm living, only about 4 houses of similar size was on the market when I listed my house. On the other hand, lots of buyers are literally refreshing their screens by the minute waiting for new listings to come up -- I received two phone calls within the first hour of listing.
- Buyers don't seem to care about price now. At least two families promised to me that they will "beat any other offers" immediately after they toured the house. Three written offers included "escalation clause."
- The craziness of the sitatution is more evidently reflected in the waiver of home inspection contingency -- two potential buyers waived the contingency, which is designed to give buyers a way out if the property has major flaws. It is hardly conceivable that in a rational market people will not hire a professional to examine maybe the largest purchase in their lifetime. The best offer even waived the financial contingency -- my final buyer stands to lose the entire $10,000 of earnest money if he cannot get the financing in place. Of course, I'm more than happy to mitigate my risks -- the default financing contingency will push people back to the negotiation table if the bank's appraiser does not agree on the purchase price.
I really didn't expect such a frenzy (and positive outcome) like this -- my original expectation is net $410,000. I don't regret selling; actually, the whole process left me a sense of irrational exuberance. The market is red hot, but can it sustain?