These 21 Rules about Selling Your Home Privately are from the book 365 Rules about Real Estate. Subscribe. Get the book. Learn what the professional realtors know.
For Sale by Owner Companies are taking your money
It burns me up that the “For Sale by Owner” companies take money from their clients upfront. They offer the world and pretend that selling a house is as easy as pie. They don’t tell you that you will probably be unsuccessful – heck, even realtors are unsuccessful a high percentage of the time.
These companies should really publish their results. The Kitchener Waterloo Real Estate Association should too! It’s not rocket science but it’s not easy as pie either.
I’ve been watching the For Sale by Owner marker over the past six months. I would estimate that about:
20% of the people that use the “For Sale by Owner” companies are successful in selling (often with the help of a buying agent, I suspect)
20% list with a real estate agent
60% give up
But this post isn’t about talking you out of selling privately. This post will attempt to shed light on what it’s really like to sell your home yourself.
21 Rules about Selling Your Home Privately
Rule #1: Be prepared to spend. You could buy a home selling package from a “For Sale By Owner” home selling franchise. You will have to pay for your newspaper advertising, feature sheets, signs, fees for your lawyer, stager, documents from the city, a website to advertise your property and MLS posting.
Rule #2: Buyers know you’re saving the commission. Buyers are well informed. Expect tough negotiations to take a chunk of the commission you thought you could save.
Rule #3: Start with the right price. Set an asking price that reflects an understanding of the current market. Most private sellers give themselves too much “wiggle room” and as such discourage potential buyers.
Rule #4: Don’t price your house too low. Don’t rely on bank appraisals or property assessments. These things rarely represent true market value.
Rule #5: It will take longer than you think. It will take longer to get ready and longer to sell than you think. It’s not as easy as advertised. You are going to be hard to find amongst all the other homes for sale by Realtors and homebuilders.
Rule #6: Buyers don’t trust you. Given a choice between buying a house listed with a Realtor and one being sold privately, buyers will chose the Realtor listed home. They have more confidence when dealing with professionals.
Rule #7: Have the confidence and ability to close the deal. Stay the course. It’s emotionally tough to sell your home. You have all the memories of graduation parties and Christmases past, dinner with the family, movie night, that sort of thing. Get over it.
Rule #8: Be prepared to be disappointed. Potential buyers might say they’ll be making an offer tomorrow and then they never call again. Be ready for a low-ball and insulting offers and be prepared to hear about everything that’s wrong with your house as potential buyers try to justify their offer price.
Rule #9: Understand how to handle competing offers, and questions about land title, and zoning, and features and fixtures of your home.
Rule #10: Explain to the buyer the true value of your home. Tell your story. Point out the features and benefits. Know the age of the furnace, roof, and windows. Have the facts ready.
Rule #11: Be ready to learn new skills and wear many hats. You will gain new experience as a copywriter, photographer, Internet wiz-kid, negotiator, salesman, presenter, stager, cleaner, painter, host, answering service, and advertiser.
Rule #12: Become resourceful. You’ll be able to find and interview a good lawyer, a home inspector, a banker or mortgage broker, tradesmen, a painter, a stager, and experts in other fields.
Rule #13: Anticipate problems. Make one small mistake and the entire deal you’ve worked so hard to get can fall through or worse, a lawsuit can ensue.
Rule #14: Qualify potential buyers. Ask if they have been pre-approved for a mortgage.
Rule #15: “For Sale By Owner” home selling franchise salespeople are not home selling experts. They are not licensed to trade in real estate, have not been through any certified real estate training whatsoever, and they carry no legal responsibility.
Rule #16: The Realtor’s commission is not “negotiable”. Decide and advertise the commission you will pay the Realtor who brings you a qualified buyer. It could be $5,500. It could be 2.5%. Be clear if you are going to deal with buyers and their Realtors.
Rule #17: Give potential buyers space to tour your home. Try to connect with them on the way out and ask for questions and feedback.
Rule #18: Do not take your home off the market until you are sure your potential buyers have the money and the intention to buy your home. An offer isn’t a good one until the paperwork is signed and the banks and lawyers have approved it.
Rule #19: Post your home on MLS. The MLS is the most powerful real estate marketing tool at your disposal. If you’re not using a Realtor to sell your home, find yourself a “posting agent” who will put your home on the MLS for a fee.
Rule #20: Get a pre-sale home inspection. Most home sales involve a home inspection. Get that out of the way. Make your house easy to buy.
Rule #21: Think about hiring a Realtor. You don’t cut your own hair. You don’t fix your own car. Selling a home is much more important and difficult than both.
The rules above are from the book 365 rules about real estate. Subscribe. Get a free copy and learn what realtors know about residential real estate.
Before taking the plunge, and trying to sell your home yourself, you could talk to a realtor about flat fee services (good idea) and mere postings (bad idea).
Really great article, thank you. We recently sold our home and one thing that helped us a lot was getting online. It seems everyone searches online first these days. Our website was way more effective than any of the print materials we made
We just purchase a home in a private sale we have a discovered a lot of issues about our home that we were not informed about can u help us and explain what our rights are as home purchasers
I think your real estate lawyer could better help you with that.