FSBO or For Sale By Owner remains a popular marketing alternative for people who are buying or selling a home. Sellers like them because they can cut out the realtor’s commission, thereby saving them thousands of dollars while buyer’s like them because they usually can find a home at a good price.
However, just because a home is listed FSBO doesn’t make it a good deal. In fact, there are some things both the seller and buyer can do to help close a deal quickly and at a price acceptable to both parties. Read on and we’ll examine how a seller and a buyer can make FSBO work for them:
If You Are The Seller
Secure Your Home’s Market Value — Prior to putting your home on the market, you’ll need to get it professionally appraised. Hire an appraiser who can help you determine a price for your home, the same price that a realtor would recommend your home be listed for.
Get Ready For Show — Assess the interior and exterior of your home and spruce it up as needed. Remove excess furniture, touch up the walls with paint, clear the clutter off of the kitchen counter, plant new flowers, and trim shrubbery. You may need to tackle additional improvement projects when the home inspection report is completed; anticipate what needs to be done before the home sells now to avoid rushing around later.
Start Marketing — Selling FSBO means a big time commitment, something that should be considered before doing it yourself. List your home in Craigslist and find a good FSBO site to feature your home. You’ll need a For Sale and information holder to place in front of your house, with plenty of pamphlets or sheets listing your home’s many features. Price your home at our below its appraised amount, but no lower than 5% lower or you cancel out the reason for not using a realtor in the first place.
If You Are The Buyer
Ask For A Copy Of The Appraisal — Dealing directly with the owner puts you at a good advantage, allowing you to ask the seller questions directly. Secure a copy of the seller’s appraisal and do your own market analysis on the neighborhood to confirm that the house is being sold for its appraised price.
Make An Offer — Most FSBO homes are placed on the market for the same price a realtor would list the home for. This means that the seller has some latitude when it comes to price. You probably can’t shave a full 5-6% off of the price of the home, otherwise the seller basically loses the money they would have paid in commission to you. On the other hand, if the home has been on the market for several months, offering 3% below the appraised value of the home can be a fair middle ground for both parties.
Get An Inspection — An independent inspection (that you pay for) from a trained home inspector can be the most valuable investment you make. Once you have the completed report in hand, ask the homeowner to handle whatever items should be addressed. The homeowner could counter and slash his price and ask your to handle repairs or simply refuse to address major problems. Estimate the cost of these repairs and subtract them from your final offer.
Toward Completing A Satisfactory Transaction
Once an agreed upon price has been reached and repairs made, then you’re ready to set a closing date. As a seller, your organization skills have paid off; as a buyer, your diligence has been rewarded resulting in a home at an attractive price.
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