When a home hits the market without a listing agent, it’s known as “for sale by owner,” or FSBO (pronounced “FIZZ-boh”). FSBO listings are more common today, thanks to consumer-facing listing platforms such as Zillow and easier access to the Multiple Listing Service (MLS) for non-agents.
But FSBO is no walk in the park. A 2017 Zillow report found that 36% of homeowners attempt to sell their homes without an agent, but only 11% actually complete sales themselves. In other words, more than two-thirds of sellers who try FSBO fail.
Think you have what it takes to join the ranks of sellers who close FSBO deals? Here’s some tips for selling your home without an agent – and how to determine whether it makes sense for you.
Get Your Home Ready
Start to prepare your house for sale well before you list it. Begin with a thorough decluttering. The goal is to make it easier for potential buyers to envision themselves in your home, rather than seeing signs of your personality everywhere. Remove anything that contributes to the home’s lived-in feel, such as family photographs, and hide it away in locked closets, storage areas, the garage, or an off-site storage unit. Take the opportunity to sell or give away possessions you no longer need; use eBay, OfferUp, Craigslist or an old-fashioned garage sale to offload them quickly.
Next, scrub the place till it shines. If you’ve been reticent to spend the money on professional home cleaning up to this point, you might want to make an exception here. Prospective buyers can tell the difference between a well-meaning amateur cleaning and a professional deep clean.
Have A Competitive List Price
Most sellers think that the LIST PRICE is the same as the SALE PRICE of the home. And of course they want the most for their beloved asset – so many go in with an optimistic list price. This is exactly the wrong way to go about it.
The purpose of the LIST PRICE is to DRIVE TRAFFIC to your property. It is not the SALE PRICE! If you believe your home is worth $500,000, and your market research shows two similar properties listed at the same price – many savvy agents will recommend you go in with a $480,000 list price. Yes that’s 4% less, but this doesn’t mean you’ll sell your home at $480,000. It means almost everyone interested in those two other homes will come to your listing first. You’ll likely sell faster and get multiple offers – and chances are if your property is really worth $500,000, you will get that or more because now you have so many folks interested. Do not underestimate the power of a “highest and best” call for offers.
Hire A Professional Real Estate Photographer
I can’t stress this enough. Photos sell. Plain and simple. In today’s world of mostly online marketing, your home is only as good as your listing. And photos are one of the most important parts of your listing.
The $299 or so a professional photographer will charge pales to how marketable these photos will make your property. A good professional will know how to bring out the features in your home and hide the downsides, bringing more online traffic to your listing and more foot traffic to your property.
A professional real estate photographer will also use a wide angle lens and know exactly the resolution that looks great across major online platforms including Zillow.com, Realtor.com, and Redfin.com. You’ll be surprised how many sellers submit portrait pictures taken via their iPhones. These pictures show up distorted on Realtor.com and these sellers lose thousands of dollars because they didn’t hire a pro.
Also along the same lines, assess if staging is right for you. If your home is upscale or has unconventional spaces, consider staging it. Staging defines spaces and provides a sense of utility, depth and scale to potential buyers. This in turn helps them imagine their own life in your property.
List It On The MLS
There’s no other tool as important as the MLS for the For Sale By Owner for 3 reasons:
- Many agents set up auto notification emails for their buyers when new homes show up on the MLS. You want to be on this list.
- Most local MLS’ distribute to Zillow, Trulia, Redfin, and several other brokerages/portals. This is important exposure for your listing.
- Finally, MLS allows you to offer the buyer’s agent a commission.
Although it’s true that you can get on the MLS only via a real estate agent or broker, gone are the days when access to the MLS meant you had to pay thousands in agent commissions. You can pay an agent a flat fee of around $250 to list your house on your local MLS.
Offer A Buyer’s Agent Commission
By some accounts over 90% of buyers are represented by agents. Platforms like Zillow, Redfin, and Trulia will direct unrepresented buyers to their “Premier” agents as leads. That’s how they make money.
So almost all inquiries to your property will be from buyers represented by agents. If you don’t offer a fair commission to the Buyer’s Agent, most agents will skip showing your property and instead show others where they are being compensated adequately.
You’re already saving the Listing Agent commission by listing on it on the MLS. Trying to skimp on the Buyer’s Agent commission will likely result in fewer (or no) showings, lower sale price, higher Days-on-Market (DOM), and increased stress. Realize most of the comparable sales you used to assess your property’s value included both sides of the commission.
Although you might think that commissions are generally unfair, your goal is to sell your home, maximizing proceeds and minimizing stress. Buyer’s Agents will have to do additional work when dealing with a FSBO. So regardless of how fair you think commissions are, they are based on a norm. And from a Buyer’s Agent point of view, they’re earning their commissions.
At the end of the day, it’s up to you to determine whether FSBO makes sense for your home, market, and objectives. That determination may flow from a simple dollars-and-cents calculation or something more complex and subjective, such as your willingness to take the time to market your property or endure the tedium of direct interactions with prospective buyers.