Author Topic: seek for sale by owner experiences  (Read 4148 times)

MichelleD1977

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seek for sale by owner experiences
« on: February 09, 2015, 08:29:36 PM »
My husband and I are looking into selling our home and moving closer to where we work as part of the grand mustacian plan! We currently have a $155,000 mortgage on a house that Mint.com has magically estimated to be worth $217,000.  A quick glance at real estate near us leads me to believe our target price would be around $190,000-200,000. 
1.5 years ago we refinanced our loan to 4% interest with cash-out to help pay down my (higher interest) student loans, hence the high principle we still owe on the mortgage. 

During our brief discussion on this so far, my husband mentioned wanting to go the for sale by owner route to save some money.  Neither one of us has any real estate experience selling, my husband did buy this same house in a FSBO situation.  A brief scan of this section on the blog makes me think twice about it, seems the savings may not be worth the extra work, and your house may not sell as fast.  What are others experience with FSBO? Any resources I should be directed to?

Zamboni

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Re: seek for sale by owner experiences
« Reply #1 on: February 09, 2015, 08:41:08 PM »
My one experience with this was not great.  If you happen to have a high demand property and an experienced, businesslike buyer wants it, then you're in good shape.  On the other hand, if you have a property that will mostly interest first time home buyers, then FSBO will be tough because at least half of a realtor's job is to help the buyer navigate the process and manage their own stress.  We had some pretty flaky "buyers" waste our time when we tried FSBO. 

MDM

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Re: seek for sale by owner experiences
« Reply #2 on: February 09, 2015, 08:59:58 PM »
There are six topics in the forums with FSBO in the subject: you can use the Search function and check the box for "Search in topic subjects only."  Might be more with "For Sale By Owner" - didn't try that.

We have sold a couple of homes using FSBO.  In both cases the buyers were landlords with multiple properties who could not get bank financing.  They were happy enough to pay an above-market interest rate and we were happy enough to receive it.  Cost for a local attorney to provide the legal language was reasonable.

tracylayton

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Re: seek for sale by owner experiences
« Reply #3 on: February 10, 2015, 07:10:17 AM »
I sold two that way, before I ever became a realtor. Both times I contacted a local realtor and asked them to pull comps and recommend a realistic sales price. I also told them that I was planning to try to sell it myself for 1 month, but would list with them if it didn't sell. Both times I placed an ad in the paper and put a sign in the yard and sold them myself. This was in the 90's and things have changed a little. Now, buyers look online...Trulia, Zillow, etc. If you can find a company that will put your home on the MLS for a flat fee, it will show up on all of those websites. You can offer 2% or 3% to the agent that brings a buyer, and they will take care of typing the contract, coordinating with a title company, etc.

theoverlook

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Re: seek for sale by owner experiences
« Reply #4 on: February 10, 2015, 10:18:27 AM »
I just sold my last house by owner but it was to a friend so it never hit any listings or had a sign up.  One big key is to have a good title company - they will handle 100% of the closing documents and communicate with the lender and buyer to make sure everything is lined up for you.  Seek a recommendation from someone you trust.  Our title company went to bat for us a few times on the last couple closings and managed to pull through deals that at times felt dead.

And that brings us to another point: both parties (seller and buyer) need to be patient and avoid panicking when something comes up that might derail things.  Because something will *always* come up.  Something like an extra document needed at the last minute, the amount of a settlement item changing, etc.  A realtor can help soothe the buyer's nerves on those points, but a good title company can too.  And as seller you need to be ready for something coming up without freaking out.  And especially without sending incendiary emails or texts.

Trulia and Zillow let you list your house yourself.  Also post it on Craigslist.  I found my last house on Craigslist and my current house on Zillow despite also having a realtor looking for me.  It didn't match my search criteria because it was poorly advertised but that worked out for me.

Take good pictures.  Have the house be very clean for the pictures and get the lighting right.  If the best camera you have is your cell phone find a friend with a digital SLR camera.  It makes a huge difference in the quality of the photos and the presentation of the listing.  Look at some other listings and try to emulate what you see on what feels like the good ones.  Details matter but don't over-disclose in the listing, having a list of trouble spots will turn everyone off.

zephyr911

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Re: seek for sale by owner experiences
« Reply #5 on: February 10, 2015, 10:36:03 AM »
If you have the know-how to do it, then more power to you! Just be aware that at least 80% of people who list FSBO later decide to list the house with a broker. That is, 1 in 5 successfully sell on their own. These are usually people with experience in buying, selling, local law, valuations, and closing processes, etc., if not an actual real estate background.

I've been a landlord and a real estate investor for several years and would still list with an agent if I were selling anything. For me, it's more about time than anything else, but I also think the greater advertising power and negotiating assistance they offer give you a very good chance of getting that 5-6% commission back in the form of a higher sale price and/or more advantageous contract terms.

That's just my $.02. FTR, I do hold a real estate license, paid for by and used primarily for my own investing partnership. I don't consider myself indoctrinated, nor categorically opposed to FSBO. I'm all for people trying it, as long as their expectations are realistic.

Cwadda

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Re: seek for sale by owner experiences
« Reply #6 on: February 10, 2015, 10:56:49 AM »
You can save $5000 or more doing so. If the buyer doesn't have a realtor either then you can save even more thousands of dollars. When are you looking to move out? If it's not immediately then you should give it a try.

My mother has sold two homes and rented a condo on her own. It's about strategy, who you know, being a go-getter, and having a good lawyer. Having a background in real estate is not at all necessary. If you're interested I could probably give you her email. She loves this kind of stuff and she might be happy to give you some pointers :)
« Last Edit: February 10, 2015, 10:58:58 AM by Cwadda »

GuitarBrian

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Re: seek for sale by owner experiences
« Reply #7 on: February 10, 2015, 11:49:41 AM »
My dad just sold a house by owner. I took pictures and listed on Zillow and Craigslist, plus a sign in the yard. It took 3 weeks. Pricing is the biggest issue, make sure to really research the comp sales and price accordingly. It sold to an individual without a realtor.

Another option is to contact realtors and negotiate a lower than "standard" 3% commission. You also have control on how much the buyer's agent gets. We found multiple agents offering 1% sellers commission. As well, with all the people finding properties on their own and contacting their buyer's agent to make an offer... you can set the buyer's commission at 1% as well. It may you may loose some casual buyers who don't check realtor.com or any of the mls sites, but not many people just call up an agent and say, recommend a house for me to buy...

The house was in the same price range as yours.

The title company actually prepared all the paperwork and we just went in with the buyer and singed everything. Cost around $900 in closing fees/insurance.

zephyr911

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Re: seek for sale by owner experiences
« Reply #8 on: February 10, 2015, 12:17:43 PM »
My dad just sold a house by owner. I took pictures and listed on Zillow and Craigslist, plus a sign in the yard. It took 3 weeks. Pricing is the biggest issue, make sure to really research the comp sales and price accordingly. It sold to an individual without a realtor.

Another option is to contact realtors and negotiate a lower than "standard" 3% commission. You also have control on how much the buyer's agent gets. We found multiple agents offering 1% sellers commission. As well, with all the people finding properties on their own and contacting their buyer's agent to make an offer... you can set the buyer's commission at 1% as well. It may you may loose some casual buyers who don't check realtor.com or any of the mls sites, but not many people just call up an agent and say, recommend a house for me to buy...

The house was in the same price range as yours.

The title company actually prepared all the paperwork and we just went in with the buyer and singed everything. Cost around $900 in closing fees/insurance.
Absolutely correct WRT commissions - while the industry would like you to have the impression that there is a "standard" commission, and many agents will stick to a certain rate, there is generally no set rate. In AL, where I'm licensed, it is illegal for brokers in an area to set a commission or to claim that there is a set percentage, as it's considered price-fixing. I have a friend's house listed for 1% right now, but with a higher percentage for the buyer's agent IOT generate traffic.
Just keep in mind that a good agent can earn their keep, and in many cases taking 1% is actually a loss, after standard marketing costs and in-house administrative charges. As with most things, you (generally) get what you pay for.

Fishingmn

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Re: seek for sale by owner experiences
« Reply #9 on: February 11, 2015, 08:18:13 AM »
I'm a Realtor so my opinion may be suspect but here's mine -

I believe that the way you get the most money from your home is 2 things:

  • Get your home in excellent showing condition so that it will appeal to the largest subset of buyers (think HGTV) and then take great pictures that show it off well. This step is your primary way to improve the value compared to competition. Most buyers want move in ready.
  • Expose your home to the largest cross section of buyers which is best accomplished on MLS

The way I support sellers with point #1 is to hire a professional decorator to give sellers a detailed report of action items. My designer spends 1+ hours going through the home and then sends a detailed action report. Sellers then take days or weeks to get the house ready. Then hiring a professional photographer is key. The suggestion above about using an SLR is okay but I want someone who uses a tripod, wide angle lense, a light meter and does things like virtual tours.

The more important issue is actually #2. I'm guessing that at least 90% of buyers are represented by a realtor so if you are doing FSBO and not paying out the standard 2.5-3% buyer commission then you're going to miss out on 90% of the market as agents won't show your house, or the buyer is going to have to pay the realtor themselves as part of a Buyer Rep Agreement and just subtract that from their offer. I believe the way to get the most interest and highest price is to have broad exposure so if you decide to only look for unrepresented buyers you are limiting the buyer pool and giving yourself less demand.

Instead, I would look for an agent that provides great services (like I mention in #1) at a low commission rate. I've started charging as low as 4.7% with $500 upfront to cover my fixed costs of listing. This normally saves seller thousands while covering my upfront costs if listing doesn't sell.

Good luck.

powskier

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Re: seek for sale by owner experiences
« Reply #10 on: February 17, 2015, 02:05:28 PM »
Easy to do fsbo, worth the coin IMO.
1. Make house "perfect", fix everything.
2. Go to a good title company tell them you are fsbo and they will give you a contract.
3. ONLY show or discuss with people who have 90% letters from a bank( or proof of cash if cash buyers), there are people who just spend their weekends looking at real estate as a hobby and who will NEVER buy.
4. Be prepared to negociate, leave your emotions elsewhere. Be prepared with comps and sound business reasoning, a buyer will not care that " your deceased grandfather helped you build that fence/etc".
5. Be prepared that buyers will say to you: "since you are not paying a 6% fee to a broker we want a 6% decrease in price"
6. Treat your buyers with respect and honesty. Don't take things personally and keep it about the business transaction.
7. FSBO is one thing, owner financing is another, seperate issues.

The last place I ended up selling I had some very interested buyers who just couldn't decide, I asked if they wanted to just rent it for 6 months and see if it worked for them. 6 months later we signed a contract that we agreed to over a 2 month casual email exchange period. It was a win/win as they kept paying rent up to closing and they were very happy and knew exactly what they were getting and if it would work out for them.
When I figured out my total hourly cost for this transaction I figured I had earned $3000/hr.

Whatever you chose to do make sure you are comfortable with it.