My Personal Finance Journey

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Practical For-Sale-By-Owner (FSBO) Tips, Part 1

Contributed by mm | October 8, 2005 5:11 AM PST

How should I summarize my first FSBO deal? It is definitely a learning experience: I read a lot beforehand about how to pull together your FSBO but at several points of time during the process, I still questioned my choice of not using an agent; I understood that without an agent I need to put some more hours, but didn't really expect the mental and physical strength the whole process demands; the part I like the most: I applied a lot of the professional skills I acquired from my job (presentation, negotiation, multi-tasking, marketing, leadership, etc.) to a real life problem, and the result didn't disappoint me.

So, some tips from the first-time FSBO-er:

Clean, Clean, Clean

If you want to sell your house, make sure your house appeals to your potential buyers. It means good curb appeal (hint: gardeners), a clean house inside out (hint: maids, carpet cleaners), and removing all clutters from the plain sight. The process is intriguing: you may be so accustomed to some items in your house that you don't feel it is a problem showing it to the buyers -- several bottles of shampoos in your bathroom, and your favorite kitenchware on the range for example -- but the key is to make your house clean, and remove as much items as possible (and let your buyers' imagination fly during the tour). I actually spent the whole afternoon moving virtually everything movable to cabinets and closets. (And one more psychological tip before you complain: you will need to do it anyway with or without an agent.)


Price It Right

Our free economy demands right prices. You can list your entry-level house for a million dollars but it doesn't matter if you cannot attract a buyer. To determine the right price range, you may use several resources:

- Local county records for recent sales (for people living in the Eastside, WA, King County's eSales Search System, or Redfin)
- Current MLS listings (usually complimentary from major local real estate firms' websites, like Windemere)

And if you don't have time to figure it out, try free services like HouseValues.com. All realtors will be eager to give you a free Competitive Market Analysis (CMA) for free. (But you need to figure out which realtor is the specialist in your neighborhood. The peril of following the highest CMA quote from realtors is some may want to play the highball game to lock you as their client, and the highball quote will not be realized in the real world.)

Speaking of price, you will need to know most historic prices and realtors' CMA quote are commission inflated. Depending on the wind of the market (buyer's market or seller's market), your buyer may demand a cut of the commission you will save. You should set your expectation as the market price minus at least 3% of agent's commission.

Also, it does not mean you have to list your house at the full price in your mind -- a small bidding war does not hurt if a slightly lower price can attract much more interested parties. My trick is to put a slightly lower listing price, and footnote in my advertisement that this price implies buyer pays his/her agent's commission. Some will naturally compare it to the commission-included price in MLS, and this comparison will work in your favor. Also, learn from your grocery store and price your house like $xx9,900 -- you will never regret listing for $100 less.


Market It Well

First step is you need to prepare your own marketing material. The description should not be a challenge -- drive around your neighborhood and collect all flyers from "For Sale" signs and you get a free load of nice wordings coming from realtors. All you need to do is to consolidate all the attractive features of your house (you definitely can discover a lot if you live in the house for seveal years) -- be it the central island, spacious bedroom, remodelled kitchen, good neighborhood and school district -- into a few bullets. Don't forget: some beautiful photos are a must (hint: focus on kitchen, bathrooms and bedrooms). Read your finished work for at least three times to make sure you include all features that may be attract to your buyers.

Second, you need to list it in the right place. Fortunately for my neighborhood, literally everyone who can afford the house is employed by or has some family members employed by Microsoft, and Microsoft has an employee community marketplace. I also put my ad to the local Craigslist. My original plan was to list my house on MLS if I couldn't get much traction from both channels -- in that case, MLS will definitely expose your property to more buyers (read: more competition). Usually you can list your FSBO property for $300 to $500 from some online services, and again, if it directs several buyers to you, you will not regret spending the money.

Since most services only allow one or few photos, it does not hurt if you put more photos on your personal web site, and link your ads to your promotional web page. In addition, it is probably a good idea to provide more details (details of your floorplan, average monthly utility bills, exact school district, more terms and conditions, etc.) on your web page so you can save your time answering basic questions. The additional benefit: your disclosure may help you to divert people who will not buy anyway (example: list your yard size and people who insist on a big or small yard will not waste your time).

More tips to come ...

This Post Has Received 3 Comments. Share Your Opinions Too.


Ed Commented on October 8, 2005

Well I just experienced the same wild-ride over here on the eastside--both buying and selling. I had to make a full-price offer on the house my growing family wanted to purchase and I turned around a sold my townhouse within 8 hours of listing at full price + $10K. Whew!


Rick Commented on October 21, 2005

East Coast here too...about an hour north of NYC. I tried to sell my house about 8 months ago doing FSBO and it was a disaster. Our house was a very nice starter home, but it was in a neighborhood that was off any main roads. So, we didn't get a lot of traffic up there. We should have marketed it better I guess because we only got a handful of visits about the house and none of them were serious, more just looking types. The marketing that we did was an ad in the newspaper.
We had to give up after about 2 months of FSBO and go with a RE agent. She wanted us to put it on for $265,000-$270,000 and we said make it higher. Turns out that was a good call as the first people that looked at it the first day that it was on the market offered $10k over the $290,000 we put it on for. Amazing to us, but things in the RE market are really crazy here in New York.
Our take on it is this...when people are looking to buy a house around here, it is just easier for them to get a RE agent. In their minds, it is no cost to them and the RE agent does all the work since the seller pays the fees. Now, I realize that they are actually paying more because in our case, we upped the asking price to cover the RE agents expenses.

-Rick


Randy Williams Commented on January 29, 2006

This article is correct on all points. Extra focus needs to be on the Market it well section. Selling a home is all about getting as much exposure to it as possible. There are a number of online resources to feature a home, but take advantage of FSBO websites, newspaper marketing, street signs, pennysaver ads, local businesses and post it boards, and any other resources that will help you get exposure to sell your home.

-Randy
www.4mysales.com


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