Selling House in different State - By Owner or use Realtor?

[BiggerFishToFI]

We are getting prepped to sell our house in a different state in a very hot market. I've never sold a home so am new to the whole process but remembered all the paperwork etc. when I bought it ~6 years ago and there being about 50 different pages I had to sign.

We have not even listed the house (still have renters for a few weeks) but have gotten some interest already from neighbors / family friends.

Have confirmed that our price range is reasonable with a friend that is a realtor (~$285,000) and would like to at least try to sell this ourselves before coughing up $17k for a couple days of a realtors time. We are pretty confident the home would sell pretty quick through a realtor, most properties are on the market <30 days in this area.

We are planning to travel to the home once the renters are out for ~10 days to clean / prep it for sale. Not a lot of time but the wife and I plan to bust ass and do as much as we can :). We already hired a landscaping company to get the yard fertilized etc. and hopefully looking a bit better.

The house could use some paint and siding repaired, was planning on not doing this (it doesn't look terrible, but is noticeable). I got a quote for what it would cost ($3600 + siding T&M) and plan to use that in the negotiations if the buyer brings it up. Thoughts?

Fence is also not in great shape, but was thinking leave it and maybe get a quote for use in negotiations?

Any advice on how to price the house? We want to list it June 1, we were thinking of stating in the listing that we would review any and all offers on the house June 9th. Then if we didnt' get an attractive enough offer we could push it out another week or two and do the same thing. I think the climate is such where we could get multiple buyers bidding against each other.

We were also planning to hire a real estate attorney to review the final contract. My realtor friend said he was willing to review it as well. Attorney necessary or is it not that complicated?

Any other advice or resources I can dig into? I've been poking around forsalebyowner.com

Thanks!!!

[Another Reader]

A lot depends on the state where you are selling and how willing buyers in the area are to forego representation.

Having a standardized contract and closing process makes things much easier.  Are you planning to cooperate with selling agents and to pay them 3 percent?  If so, paying 1 percent to Redfin or some other discount broker might be worth the money if they list the property on the MLS and handle the seller's side of the process.

[MustacheAndaHalf]

The house could use some paint and siding repaired, was planning on not doing this (it doesn't look terrible, but is noticeable). I got a quote for what it would cost ($3600 + siding T&M) and plan to use that in the negotiations if the buyer brings it up. Thoughts?

I think it's a mistake to rush past easy, visible repairs like this.  Most buyers don't understand house internals, so when they see paint in poor condition they downgrade the condition of the entire house.  Visible problems suggest other not so visible problems.

Most bidders won't pay for a home inspection, so in general in an auction you would want a home inspection before the auction.  You give a copy to anyone showing serious interest in your property, so that all buyers have that information.  I forget, but I think a secondary motivation is so buyers can remove the inspection contingency in hot markets, so you remove one common risk of a deal falling apart.

I'd favor taking more than 10 days to deal with everything, but maybe you'd need to hire someone in the other state to make that work.  Might be worth it if the house value can be increased from being in better condition.

[MommyCake]

Maybe I missed it, but if you are out of state how will you show the property without a realtor?  Do you plan to do that in the 10 days as well?

[BiggerFishToFI]

Thanks for the reply's so far. A couple things:

• The house in the Boise, Idaho area if that makes a difference
• After some more research and thought I decided we are going to get the house painted. It needs it and I agree with the comment that it may lead the buyer to think other parts of the house were not maintained.
• Wasn't planning on doing it "auction" style, rather just setting a common day where we will evaluate offers. We are not going to accept a low ball offer if that is all we get. Saw this tip in a MMM article since some buyers offers come with 24 hour periods where you need to accept / deny the offer
• Luckily due to my job (I work from home) I can travel back and spend more than 10 days if necessary. My wife is not as flexible so just looking not to spend all my time away from her. Also have family that lives near the house that can help show it etc. if necessary
• Considering listing with Redfin (they are 1.5%) or another discount firm or maybe a flat fee realtor? Anybody have experience in this area?

Thanks again!

[CatamaranSailor]

I have had experience both selling FSBO and with real estate agents.

YMMV.

Selling FSBO is totally doable and may POSSIBLY save you some money. It won't be as much as you think. People come to FSBO's thinking 1) I'll get a deal because it's a FSBO and 2) They are selling FSBO because they are in trouble 3) I can use some of my awesome "creative financing" chops that I learned from that "No Money Down Real Estate" program I bought.

Basically, you'll be spending a lot of time separating wheat from chaff.

The mechanics of selling a house are straightforward. Real estate contract (I would suggest having one prepared by a real estate attorney in your area...not a boiler plate contract from the Internet). Closing/Title company. Inspections. A buyer who actually has money! etc.

But getting that perfect buyer is the challenge. Again-totally doable as a FSBO-but it's difficult and quite frankly a royal PITA, even in a seller's market.

You will get a ton of calls from people "just looking." You will get a people who want to "rent to own." You will get calls from people who sound perfect but "Don't have their financing quite squared away"...etc,etc,etc.

You'll talk to people who sound perfect, set up time to show, only to have them NOT show or bail at the last minute.

And you'll get the person who has money, wants to buy the house, puts in an offer only to come back with 80,000 items they want corrected.

I'm not steering you away from doing a FSBO. But it's one of those things you can really get overwhelmed with.

The perfect FSBO is when you basically have a buyer already lined up...you said you had some interest. You make sure you are CRYSTAL CLEAR with what you expect (price, what you'll fix, if you'll do any type of owner financing ((don't do this please!!)) get verification they have the $$ lined up, etc). Then you just skip to the mechanics of the sale.

Real Estate agents (GOOD real estate agents...don't waste your time with anyone who is not a high volume seller) make their money by 1) bringing you qualified buyers....no looky loo's or "I really want to PARTNER with you on this deal!" types. They KEEP THE DEAL ON TRACT....they are in constant communication, working out details and solving little issues before they derail the purchase. A good agent is absolutely worth it. A bad agent...you're better off listing your house in the Thrifty Nickel.

Personally, if I were in your shoes I would do everything I could to make the house as picture perfect as possible. I'd  find an great agent. I'd be very clear with the agent that..this is the profit I want out of the house...whatever number that is. That gives them the option to price the house and be flexible on the commission based on what they believe the house will sell for. Then let them go to town. My bet is you'll have an offer inside of a week for asking price or possible even more.

Again...either way can work.

[Car Jack]

Do your homework to figure out comps.  That gives you a "value" compared with other local houses that have recently sold.  Then....contact these neighbors who have expressed interest.  If one is serious and in the ball park of your "value", then see if you can close the deal.  If you can, hire a local lawyer to do the closing.  Advantage of this, if all falls into place is that you don't have to fly there (wasting money and time), don't have to work like a slave for 10 days (I doubt that would be fun) and you offload the property quickly and don't pay a real estate agent fee.

As much as painting and fixing and doing things would make the house show better....and if it were local, I've got a million suggestions for low cost things that can add a LOT to showing a house.....from long distance, I would think that an easy offload would be your goal.  Even if you get....say $10k more by sprucing it up....you spend $5k to do it, waste 10 days and end up paying yourself peanuts for the sweat equity.

Alternately, if neighbors don't pan out, then find a local real estate agent and again, offload the job of selling the house.  I've done this and had minimal work on my part.  POA was given to the agent wrt sale of the house.  I signed a couple papers post sale and waited for the check.

[Mr Mark]

People come to FSBO's thinking 1) I'll get a deal because it's a FSBO and 2) They are selling FSBO because they are in trouble ...

Yep. +1

As soon as I see a 'fizbo' I'm thinking ... ooooh how much under true market value could I get that for? The thought process is something like 'Hmmm... if they are stupid enough to think it's a good idea to sell a house themselves, then they're maybe also stupid enough to not know what it's worth or how to actually negotiate a sale'.

Example. I got a great deal on a house in a nice location 'inside the loop' in Houston because the owner had tried to FSBO. The house needed some TLC, and he listed it for too much. No action. Dropped price a bit. No action. Had it on the market for months. Missed the peak spring/summer sale season.

In the end he had to beg a real estate agent to take it on, because he was moving to DC. I got the impression the agent was not too impressed by his previous amateur efforts and (perhaps subconsciously) wasn't making huge efforts (although we did see an open house - but the house was unstaged). She dropped the price a lot compared to what he'd started at, I put in a nice low offer, we negotiated over the inspection and presto. So the owner got a long delay (was carrying 2 mortgages in the end, bridge financing...), got a lower price, had all the wasted time and money of a failed FSBO, and still ended up paying a commission.  A few years later I made a lot of money selling that house.

I think there's a reason good real estate agents earn their commission. They work hard to advertise and promote, connect with buyers, talk it up, and handle all the BS. They can often give great advice on what you should fix up and what not to do. IMHO in general they more than earn their commission through the work they do and the price they can get (and remember the buyers' agent will still want to take 3%). 

Of course YMMV. But I don't think it's as easy as the "Yes - you can sell your property!" people make it.

[Dicey]

Long time, multiple property owner here. What Mr Mark said. You're watching the pennies, not the dollars. Do the maintenance, hire a great agent, catch the wave. The distance involved makes this an easy decision.