It's a brave new world out there in the residential real estate market, folks. The robust seller's market that was spurred on by the pandemic, low inventory, and historically low interest rates shows no signs of slowing down.
Take a look at some of these startling facts and figures:
The median sale price of an existing home at the end of March 2021 was $329,100, up from 280,700 one year ago. That change represents a 17.24% increase from the same time last year. And if you'd like to go pre-pandemic, the average price was $259,700 at the end of March 2019.
- The median sale price of an existing home at the end of March 2021 was $329,100, up from 280,700 one year ago. That change represents a 17.24% increase from the same time last year. And if you'd like to go pre-pandemic, the average price was $259,700 at the end of March 2019.
- In some states, the asking price is just a starting point. Nearly 40% of homes sold above their asking price during March – a new record. In California and Colorado, some homes are often selling for 60% over their listing price this spring.
- And here's another all-time high this spring -- 58% of homes went under contract within their first two weeks on the market.
About two-thirds (63%) of last year's home buyers made an offer on a property that they hadn't visited in person. In a 2021 survey, nearly 80% of millennial home buyers said they would buy a home sight unseen.
If you're looking to sell your home, all these statistics scream that now is a good time. But the same numbers also may be tempting you to go it alone. After all, if buyers are ready to pay more than your asking price without even seeing your home in person, why should you pay an average of 6% in sales commission to a real estate agent?
In this article, we'll give you an overview of what you need to know to list your home FSBO (for sale by owner). We'll explain what FSBO involves and offer tips for making the process work for you.
Making the FSBO decision
The FSBO designation means you list your home without the assistance of a professional real estate agent. That means you're responsible for the entire process, including pricing, staging, listing, negotiating, compiling, and completing the paperwork, and closing.
While the majority of homeowners hire a real estate listing agent, about 36% of sellers list their homes without an agent, according to Zillow research. However, the same pre-pandemic study found that only 11% of sales were FSBO, indicating that some sellers eventually hired an agent.
Nearly 50% of respondents to that Zillow survey said they went the FSBO route to save money. About 35% said they felt confident they could sell without an agent, and roughly 34% admitted they knew of a potential buyer.
No matter how you look at it, the savings are a big deal. Using that median home price of $329,000 and a 6% agent commission, you could save $19,740. However, you also should factor in the time you will have to spend on the transaction from start to finish to see if it's a good fit for you.
Preparing your home for sale
If you've decided to sell your home without the help of a real estate professional, your first step is to prepare your home. You'll want it to look its best for the quality photos you'll share with your online listing and for live buyer visits in-person and online.
Take a tour of both the exterior and interior of your home with a buyer's eye. Look for any minor repairs that need to be made and ways you can freshen things up. Here are some tips:
Depersonalize. Removing your photos and personal memorabilia makes it easier for buyers to picture themselves in that environment.
Declutter. Clear counters and tabletops of all unnecessary items. Consider placing some furniture and other belongings in storage to open up more space.
Organize. Neat closets, cabinets, and storage spaces will give buyers a good impression.
Repair. Fix that leaky faucet or that drawer that doesn't close all the way. Replace any missing or burned-out light bulbs.
Clean. Keep your home as sanitary and as dust-free as possible. Keep close tabs on pet hair and pet odors.
Add curb appeal. Remove leaves and yard debris from walkways. Trim shrubs and overhanging tree limbs. Place some fresh pots of flowers on your front steps or entrance.
Setting your price
Your next step is to set your home's listing price. Real estate agents provide clients with a Comparative Market Analysis (CMA), but you can get a good idea of your home's value by doing your own online research.
To find comparable properties (comps), look for homes that
- are within a half-mile of your home
- have been listed within the past three months
- are about the same age as your home
- are within a 10% range of your home's square footage
You may be tempted to price low in this seller's market, thinking a bidding war will drive the price up anyway. This tactic could backfire, however. There is always a chance that the highest bidder's financing falls through, and that low price could jeopardize later lower offers.
If you'd like some help with pricing, you could hire a professional appraiser, and there are a number of online estimating tools, such as Zillow's Zestimate, that you can utilize.
Listing and marketing your home
Now, you're ready to get your home out there on the market. Your first step is to hire a professional photographer to capture some amazing images of your property.
According to Zillow's research, 76% percent of buyers said that viewing professional pictures was important to their home-buying decision. In today's fast and furious market where people are bidding on homes they haven't seen in person, quality photos make more of a difference than ever.
The good news is that Snappr can make this part of the FSBO process a breeze. Snappr connects you with the best real estate photographers in your area. It's never been easier or more affordable to hire a pro to take your photos and videos. And Snappr can often have a photographer at your door within only two hours!
After quality photos catch their eye, buyers next read the listing description for details on the property. The description should include the square footage, the number of bedrooms and bathrooms. Be sure to call attention to your home's best attributes (such as hardwood floors, backyard deck, or home office) with keywords. Also, add neighborhood amenities such as proximity to parks and schools.
Many online real estate sites, including Zillow, allow FSBO sellers to post free listings. You also should consider sharing your home lasting on the community pages of Facebook or Nextdoor.
If you would like to have your home listed on the MLS (Multiple Listing Service) as an FSBO, you can pay a real estate agent a flat fee for just that service.
Handling showings, bids, and closing paperwork
During the shutdowns of the pandemic, the real estate industry relied upon technology more than ever before. Virtual open houses, live video showings, and online bidding and closing became commonplace. And, today, you'll find an array of sites to help you handle your FSBO dealings virtually. Examples are Houzeo, FSBO.com, Forsalebyowner.com, and Fizber.
Before a potential buyer visits your home, be sure to complete a disclosure statement and have copies available in your home during showings. State requirements vary for the contents, but it usually includes your responses to a series of questions about the house's condition and any existing or potential problems.
Aim to be flexible in terms of what your buyers want – virtual or online showings or both. Here are some tips for successful FSBO showings:
- Try to be available as much as possible. If buyers cannot view your home, they will move on to another home.
- Practice the home tour ahead of time, considering the best lighting options and the order of how you'd like buyers to move through the property.
- Anticipate your responses to common questions, including as many details as you can.
- Point out recent upgrades, including cosmetic improvements and updates for energy efficiency.
- Keep the conversation focused on the house, not your personal circumstances, as much as possible.
- If the tour is in person, allow buyers time to look things over. Let them enter each room first, and then allow them time to explore further on their own while you retreat to another spot of the house.
- Follow current health and safety protocols, like mask-wearing and social distancing.
Once you begin getting offers, the negotiating process starts. In this seller's market, you should look for offers that come with a lender's letter that show the buyer is qualified and committed to a lender. After accepting a buyer's offer, you should ask for a copy of their mortgage approval.
After a buyer submits an acceptable written offer, then it's time for a written contract. The contract includes the price, closing concessions, the date and location of closing, and a list of contingencies. The contingencies protect the buyer if, for example, a problem comes to light during a home inspection.
The closing is when the buyer and seller come together to finish the sale. Depending on the laws in your state, the closing will take place at a title company or a real estate attorney's office. In some cases, including during the pandemic, virtual closings can occur.
Closing costs vary by state and deed transfer tax, excise tax, and document preparation expenses. In this hot seller's market, you may be able to negotiate closing fees as part of your sale price.
Is FSBO the right choice for you? Only you can answer that question. However, whether you handle the sale on your own or not, there is one thing only a professional should handle – your listing photography.
Today's home buyers rely on photos, videos, and virtual tours to find and narrow down their choices. If you're ready to make your FSBO real estate listings stand out to buyers with the work of a professional photographer, contact Snappr today.