What is For Sale by Owner (FSBO)?
For Sale By Owner (FSBO) is a method of selling property that is conducted directly by the seller without using a listing agent. Most owners opt for FSBO in selling their properties because it saves the commission that would’ve been paid to a listing agent or broker, which is usually between 3% to 6% of the final agreed-upon selling price.
However, FSBO requires the seller to assume all the responsibilities that a listing agent would’ve performed in the sale of the home. If the seller has little or no knowledge of the home selling process, they will find the process hectic, and they may be forced to work alongside a qualified real estate agent in their state. For sale by owner transactions are common in the real estate market.
How to Prepare Your Home as a For Sale by Owner
When selling a home, the seller should make the house attractive to potential buyers by making sure everything is in order. Here are a few ways that sellers can use to prepare for a for sale by owner:
1. Examine the house from a stranger’s viewpoint
Sometimes, the homeowner may fail to notice some defects that may discourage potential buyers from initiating the sale process. Viewing the house from a stranger’s viewpoint can help spot some mistakes or deficiencies in the house. It can even be better when you ask your close friends to pass by your house and give you an independent opinion of the state of the house. Note whatever they see as a defect and make an effort to make improvements on these areas.
2. Make improvements before selling
Selling a house with broken furniture and fixtures can either discourage potential buyers or attract lower prices than the listing prices. Buyers would want to lower the price to cater for the costs of making improvements in the house. One way to increase the value of the house is to spend money on house improvement by fixing broken furniture and fixing loose fixtures. The seller should spend a reasonable amount of money on improvements to avoid eating too much into the profits.
3. Separate pets from the house being sold
Even though pets add some kind of happiness to a home, not all buyers would be interested in buying a home with pets. To some buyers, the pets may be a turn-off, especially when there are family members who are allergic to pets. Separate the pets from the house being sold, and only include pets when there is a potential buyer who may be interested in owning the pets.
How to Market a Home as a For Sale by Owner
When selling a home, the seller should find creative ways to reach their target audience even if it means spending money to get them inside the house. Since the seller is not paying commission to a listing agent, they should redirect that money to marketing efforts.
Here are some of the ways to market a home as a for sale by owner:
1. Word of mouth
Word of mouth is a strong marketing technique because chances are that your friends will know somebody looking for a home to buy. You can start by calling or emailing your friends, close relatives and business partners whom you have exchanged business cards with. Let them know you are selling a home, and provide the home description, photos and videos, and a link to a website where you have placed an ad.
2. Pay for ad space
Spend money on marketing to increase the reach of your marketing efforts. You can pay for an ad in your local newspaper, radio, public bulletin boards, and websites that cater to FSBOs. You can also use Craigslist to share information about the house on sale, price range, pictures, and contact information that potential buyers can use to reach you. You can also design flyers to give to potential buyers who come to view the house or to workmates in your workplace if it is allowed.
3. Multiple listing services
Multiple listing services are operated by the local realtor association, and they are preferred by buyers looking to buy a new home. You can seek the services of an FSBO help website to help list your home on the multiple listing services. Most of these services charge a 3% commission per listing.
4. Create a virtual tour
Hire a good videographer who can create a virtual tour of the house and show a realistic view of the property to potential buyers. Modern videographers use drones to capture an aerial view of the house and create a media item that gives potential buyers a walkthrough of the house. The media item can be included in online advertisements that the seller uses to attract potential buyers. It can also include HD photos of each section of the house that buyers would be interested in seeing.
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