11 Questions to Ask If You're Thinking "For Sale By Owner"
When the time comes to sell your home, there are plenty of questions on your mind, especially if you’re thinking about going the For Sale By Owner route. How much is my home worth? What’s a fair selling price? Should I list my home with a Realtor? Can I even sell my home myself?
If you find yourself leaning towards listing the house yourself, here are 11 questions to answer when listing your home as For Sale By Owner (FSBO).
Can you price your home competitively as a For Sale By Owner?
It sounds like an easy one for most homeowners but with little or no experience in real estate or the housing market, homeowners like yourself may not be sure what their home is worth. If you price it too low, there go your profits. Price it too high and you won’t attract interested buyers.
Do you have the time it takes to be an FSBO seller?
Being a For Sale By Owner seller means you’re doing ALL of the work. It takes much more time and effort than you might realize. Simply putting up a For Sale By Owner sign is not nearly enough to get your home sold. More on that later. You may need to schedule inspections, do repairs, stage your home for showings, prepare and file lots of paperwork, conduct market analysis, address any legal or financial issues, etc. FSBO sellers must be prepared to put in lots of hours from start to finish to be successful.
Will you be available to show your home to prospective buyers and answer their questions?
It’s a great feeling to have prospective buyers walk through your home. You’re one step closer to getting an offer. You’ll want to accommodate their schedule for showings, usually evenings and weekends. Being flexible during these times is important. When potential buyers visit, be ready for a lot of questions about your home; you’ll be asked about the age of the home, how long you lived there, neighbors, etc. Smart buyers will also ask about flooding issues, foundational defects, plumbing problems, electrical issues, and other similar questions.
Sellers, including FSBO sellers, are required by law to disclose known problems with a home during the sale process. Any known defects like mold, roof damage or plumbing issues have to be made known before closing. Be honest and don’t try to hide problems from buyers. More importantly, familiarize yourself with the laws you will be accountable for upholding.
Do you have a plan to market your home, so people know it’s For Sale By Owner?
In order to attract potential buyers, they need to know your home is for sale. Marketing can be very challenging. This is one huge advantage for real estate agents. They’re able to get properties listed and in front of many interested parties, including other realtors, who in turn can cast a wide net and reach even more people.
Then there’s the budget. Marketing and advertising can be very expensive for an FSBO seller. The money is coming directly out of your pocket and certainly puts a wrinkle in your cash flow while your home is on the market. Take the time to weigh the cost of marketing your home against the potential profits of choosing the For Sale By Owner route.
Can you handle criticism if negative comments are made about your home?
It’s your home and you’re proud of it. However, many potential buyers might not love it as much as you do. That can hurt and might affect your motivation to be an FSBO seller. Especially if people leave negative comments.
Are you able to negotiate the highest selling price?
Knowing how much your home is worth via a simple appraisal is just your starting point. You also have to consider the market value and how much similar homes are selling in your area. Once buyers begin submitting offers, you’ll find yourself mired in contingency offers and counteroffers. How you negotiate these aspects of the transaction will directly impact how much you profit from being an FSBO seller.
Do you have access to all the appropriate contracts, disclosures, and other paperwork?
Before showing your home, line up all of the necessary paperwork. Different states have different regulations. Do your research. What’s relevant in one state may not be applicable in another. Check your state and county government websites for more information. Here are common items you should be ready to supply: property survey, receipts & warranties, permits, property tax bill, loan documents, latest utility bill, and property title.
Are you willing to screen potential buyers?
You’d be surprised how common it is for thieves to use a home showing as an opportunity to steal. Check potential buyers’ identification when they enter your home and note their names and addresses. That simple act might be enough to make them think twice about damaging or stealing anything.
Ask for a preapproval letter and what type of loan they’re seeking. You don’t want to waste time with buyers who can’t get financing.
Do you know how a home inspection can impact your For Sale By Owner listing?
A home inspection gives the buyer a deeper look at your home so they’re aware of any structural or foundational problems, things that you might not even know about. The inspector will contact you to arrange a time for the inspection that is convenient for you. If the inspector finds substantive problems, the buyer may ask you to cover some or all of the cost of fixing them. Expect to negotiate on the cost of the repairs.
Do you understand all the fees you will be charged at closing and exactly how much you will end up with?
While buyers have more items to pay for at the closing of a house, it’s often up to the FSBO seller to cover the commission of agents. Closing costs are deducted from the profit you make on the home, unless you have low equity, in which case, you may need to bring some cash to the table to cover the expenses. The main closing cost for the seller can include:
- Fees for buyer’s title insurance policy
- Mortgage payoff and prepayment penalty (if applicable)
- Outstanding amounts owed on the property
- Seller’s attorney fees (if applicable)
- Transfer taxes and recording fees
- Homeowners Association Transfer Fees
Have you talked with an experienced loan offer from Great Midwest Bank?
We understand you want to get the most out of your home when you’re ready to sell it. Many families are willing to put in the sweat equity to be successful FSBO sellers. At Great Midwest Bank, we’ll work with you on your next home loan and be a resource during the whole process of selling your current home.
If you’re not so sure the risk is worth the reward in putting your house on the market as For Sale By Owner, consult a Great Midwest Bank Loan Officers today. We’ll do all we can to help point you in the right direction.