Selling “FSBO” (For Sale By Owner)
Previously we discussed different methods available for selling a property. There are three basic routes you can take:
- List with agent and sell on MLS
- Sell it yourself (For Sale By Owner – “FSBO”)
- Sell to an investor
We’d like to dig a little deeper into what is involved in successfully selling a house yourself and provide you with some useful tips to keep in mind should you decide to go the FSBO route.
Who is your buyer?
Selling your home doesn’t have to be a difficult process if you remember this one thing: every house has a buyer. The question you should ask yourself is this: who is my buyer? Also, what is my buyer looking for, and what are their needs? If you can answer these questions you can make sure that the home you are selling fits their bill. The #1 tip when selling FSBO is to identify your buyer. If you do that you can almost guarantee that your home will sell quickly. So how do you identify your buyer?
Know your neighborhood
Let’s say the property is in good condition and in a recently constructed subdivision with lots of young families living in the surrounding houses. Obviously young couples with kids will be prime candidates to buy your property. Your marketing should include things like “great starter home”, “big open backyard” or “home is in a top-rated school district”.
Now let’s say your home is in an older neighborhood with a higher number of rental homes than owner-occupied homes. In this case your prime buyer would be a landlord, and your marketing would be more focused on highlighting things that appeal to landlords like “fixer upper, would make a great rental” or “great rental area, house should rent for $650/month”. These are things that catch a landlord’s eye.
Don’t waste your marketing dollars or your time. Landlords aren’t usually looking to buy brand new homes, and couples with young kids are not often looking to buy fixer uppers. Know your neighborhood and market the property to the right buyer.
Know your realistic price range
Setting the right price for your property is difficult but it’s important. Set the price too low and you miss out on potential profit. But set the price too high and you might end up in the exact same position.
Let’s say your property is a 3/2 with 1,500 SF and in your neighborhood the comparable homes sell for $80/SF. If you advertise your home for sell at $80/SF you will probably sell quickly. But if you advertise your home for sell at $100/SF or $150,000 when the comparable homes are only selling for $120,000, you’re almost guaranteed to be in for a long wait, and waiting is expensive. Let’s say your property sits on the market for 6 months before you find a buyer. During those 6 months you are still responsible for paying utilities, insurance and taxes. Every month the home sits unsold is another month you spend your potential profit to pay for these items. In the meantime, it will likely be necessary to gradually lower your price until you reach the $80/SF ballpark that is attractive to buyers in that area. If you had listed your home at the comparable $80/SF price range to begin with you would have likely sold very quickly and would have also saved yourself 6 months of expenses to boot.
Seal the deal with curb appeal
So you’ve examined your neighborhood and you’ve targeted your prime buyer, and you’ve also targeted the price range that appeals to those buyers. Now it’s time to spruce the place up a little bit. Never underestimate the power of curb appeal. Like the old saying says, “you don’t get a second chance to make a good first impression.”
Think about how your house looks when a potential buyer drives up for the very first time. Does it look ragged and shaggy, or does it look neat and trim? Maybe you need to repair the driveway, mow the lawn and trim the shrubs. Put a fresh coat of paint on the front door. Plant a few flowers along the sidewalk. These are inexpensive things that can give your property charm and help it show well, and a property that shows well will also sell well.
Don’t forget the interior appeal!
While you’re touching up the yard and exterior of the home, don’t forget to take a good hard look at the interior and see where you could make some inexpensive changes. Basic things like a fresh coat of paint on the walls or replacing stained carpets can go a long way towards dressing up the appearance of a home. Even something as simple as cleaning dirty windows and replacing broken screens can have a dramatic effect and improve your ability to sell quickly.
We hope that these tips have been helpful and have provided you with some food for thought. We know that you have needs and our goal is to provide you with solutions to those needs. We put forth our best effort to be a useful option and present you with helpful solutions to your needs. If you’ve considered your options and you think selling makes sense for you, we are here to help.
Our motto is simple: we believe that if we can’t provide a solution that works for you, then we can’t buy your house. It’s as simple as that.