1. The seller could add the extra 6 or 7% that an agent would charge to the purchase price and pocket the additional savings, minus the minimal expense for advertising and signage.

2. Without the cost of using an agent, the seller could always keep the asking price a few percent lower than comparable listed properties. This lower price can be attractive “bait” to potential buyers, especially when there are other homes listed in the neighborhood that buyers can compare prices with.

3. If seller has good negotiating skills he or she may prefer to deal directly with prospective buyers rather than through their agents.

4. If the seller has all the forms, contracts, and the ability to market the home to retail buyers, the help of an agent may simply be unnecessary.

5. Without an agent involved, or the oversight of a bureaucratic agency, the seller will have fewer hoops to jump through and an easier time controlling the deal. Generally the less “red tape”, the earlier the transaction can be completed.

FSBO Steps

When selling a FSBO, the following steps and tips are very valuable. The savings that can be enjoyed by the seller may be well worth the extra time it takes to handle the sale.

PRICING THE PROPERTY: It’s important to estimate the fair market value of the property based on comparable sales. Before deciding on an asking price, the comparable Information should be analyzed to make sure it is up to date by checking again for recent sales. If it is a buyer’s market, it is sometimes wise to price the FSBO about 3-5% lower than comparable listed homes for sale in that neighborhood. It really all depends on the seller's needs. What is more important: a higher profit margin or a faster resale? In a seller’s market, the asking price is ordinarily higher than would normally be asked for the same property. In that type of market, the buyer might pay it. Do not forget, the seller can always drop the asking price later if the property does not sell right away. No matter what the market conditions are, it is important to try to keep asking prices competitive.

MARKET READY: Some light rehab work may be enough to get the property marketable. If not, some more extensive repairs can be done. The goal is to not only create curb appeal but also to give that good first impression as prospective buyers enter the driveway. Depending on the property’s condition the seller may want to start marketing it right away or even before the final touches are finished. It goes back to personal priorities: a higher price or a quicker sale! “Market ready” may have a whole different meaning from one buyer/investor to another. Many do very little to a property because they always “buy right” or they do not buy at all. If they cannot get the property for the price they are asking, they simply move on to the next prospect. It takes a good bit of discipline to walk away from a property that will make a little money, but not the profits that are really needed for the deal to be considered a good investment opportunity.

ADVERTISING: The first step is to purchase attention grabbing, durable, weatherproof yard signs that can be placed in the most visible part of the front yard. Next, the seller contacts local newspapers and obtain pricing information for their FSBO classified ad listings. This will help the seller decide where and when to run the advertisement. He or she may want to just advertise on Saturday or Sunday in the “open house” section. Open house marketing can be a lot of work but it can also produce the buyer the seller is looking for all in one day. If an open house is held, “open house” signs should be purchased to place at the main intersections and turns that lead all the way to the property. Sellers also often create a simple flyer that visitors can take with them. This will helps them remember the property as they may have viewed several properties that day. The flyer can include a picture of the home, the address, contact information, asking price, the property’s amenities, and maybe even recent comparable sales information.

SHOWING THE PROPERTY: Now the property is market ready. So, it is critical that the seller keeps it that way. Remember, it’s all about impression. Any trash, newspapers, toys, tools, and other distracting stuff that may be in the yard, driveway, patio, deck, and garage need to be cleaned up. As real estate agents know, “neatness sells.” Therefore the house should be clean and clutter-free. In order to make the home feel more spacious, the shelves, walls and counters should be cleared as much as possible. There are several ways to help make the home more pleasant and inviting. First, the blinds should be opened during the day and all the lights turned on at night. Place fresh cut flowers in the living room or burn lightly-scented candles in some of the rooms. Fresh baked bread or cookies can add to the ambiance. Even just the aroma of a nice pot of coffee brewing can make buyers feel “at home.” When it comes to showing appointments, it is important to stay as time flexible and available as possible. Also, sellers should give potential buyers some space while they are touring the house. They will likely feel uncomfortable making comments otherwise. The buyers should be allowed a level of privacy to roam the house freely. Once they have finished, the seller should be available for any questions they may have concerning the property.

QUALIFYING BUYERS: Basically, the seller needs to determine who the real prospects are and who the time-wasters are. If they start discussing whether or not their furniture will fit in house, the seller may want to ask some key questions like, “Have you already been preapproved?”or perhaps, “What type of financing are you using?” or “Who are you using to handle your financing?” If the interested buyers are not prequalified or pre-approved yet, they should be given a few business cards of different mortgage brokers or lenders as recommendations.

FOLLOW-UP: The seller should try to obtain the name and phone number of each prospect that views the property. A simple sign-in sheet that asks for this information usually does the trick. Within 1-2 days, a friendly follow-up call should be made to get feedback from the buyers. If they have looked at several homes that day they may not specifically remember some things if the seller waits too long to follow-up.

NEGOTIATING: The negotiations should bring the seller to a final agreement that will meet the needs of both parties.

PAPERWORK: The seller can always use the standard contracts and forms or the buyer may provide his or her own contracts. Whichever are used, the seller should be on the lookout for the same type of contingencies that were used when buying. The seller does not want someone tying up the property for a long period of time without the ability to actually close the deal.

CLOSING: In some states the seller can complete the closing by himself or herself, especially if the buyer is paying cash. In other states a closing agent may be required. If the buyer is not paying cash, the seller really should save the hassle and hire a closing agent to ensure that the closing is executed properly. The closing agent can be a representative from a title company, separate escrow company, or an attorney. Also, some realtors will handle the closing for a small percentage of the sale price.