Selling your home on your own can help yield significant savings in real estate brokerage fees. But it can also be a tricky process to navigate.
As house prices creep back up across the country, the market remains fragile in many areas -- a fact that's painfully clear to homeowners who are trying to sell.
To minimize losses on homes that might still be underwater, many owners are choosing to sell their homes on their own, without the help of a licensed real estate agent.
Are you up for the challenge?
Here are seven tips that could help save you money and close the deal.
1. Spruce Up the Place.
If houses in your area have had extensive renovations, they're your competition. Making your house appealing to buyers is important to help sell it quickly and for a price you want.
But, don't think you have to gut the place -- be smart about what you fix.
Bill Kuhl, a USAA MoversAdvantage® Preferred Agent based in Fort Walton Beach, Fla., suggests performing simple updates to help add value and improve the first impression of your home.
"You don't have to invest in an expensive kitchen renovation. Consider re-facing or painting the cabinets or updating the cabinet hardware," says Kuhl. "In the bathroom, updating a light fixture and replacing the mirror can make a big impact."
2. Price Your Home Appropriately.
Get to know the local market by attending open-house events. Compare your home and asking price to those of similar houses for sale in your area. Your local multiple listing service can also tell you how nearby or similar homes are priced.
"Buyers might expect to get a deal when they're buying a house that is For Sale By Owner," notes Diane Brooks, the product management director for USAA's MoversAdvantage program. "You may be able to consider a lower price since you're not paying an agent's commission."
Other tips to consider when pricing your home:
- Use an online estimating tool to help you determine the estimated market value and tax value of your home, as well as your home's estimated rebuild cost.
- Pay for an independent appraisal, which places a value on your home based on its size, condition, location and other such factors.
3. Market Your Home.
If allowed by your homeowners association, post a for sale sign in your yard. Also, list your home with a for sale by owner online service and advertise it on Internet sites and in the local newspaper and real estate circulars. Offering to pay a commission to a buyer's agent may also help you attract more potential buyers.
Wherever you advertise, do it well and do it often. Attractive photos and engaging descriptions can highlight key selling features: the home's location, curb appeal, recent remodels, the number of bedrooms and bathrooms, and architectural features.
4. Learn the Legal Stuff.
Understand your legal rights and responsibilities as a seller by checking with your local government. Some regulations vary by state. Also, learn about the rights of your prospective buyers from the U.S. Department of Housing and Urban Development.
A real estate attorney and/or a title company should draw up the final sales contract, but other required documents, such as disclosure forms, are available online. Sites such as Legal-Forms-Online.com or USLegalForms.com offer low-cost or free legal forms.
"This step is critical," says Karen Mawyer, assistant vice president of real estate strategy integration at USAA. "Your home is likely your biggest asset, and you need to understand the legal and settlement process."
5. Understand Financing.
Make sure your buyers are preapproved for a mortgage with a reputable lender. You also should study other home financing options, such as lease-to-own and seller financing, and determine what you're willing to consider.
6. Sharpen Your Negotiating Skills.
Know your bottom line and counter low offers with it early. If the buyer still isn't satisfied and you're eager to close the deal, try compromising on requests, such as replacing appliances or making repairs. You also can consider splitting the savings from brokerage fees with the buyer.
7. Be Open-minded.
Your house is your home, a place full of memories, but to the buyer it's a business transaction. Say goodbye emotionally before you put the house on the market, so you can be objective when it comes to negotiating with potential buyers.
Offers that at first glance may seem insulting could represent an opportunity to negotiate and close the deal. "Too often I've seen sellers reject an offer out-of-hand and then, months and thousands of dollars later, reduce the price to that same level," says J.J. Montanaro, a certified financial planner ™ practitioner with USAA.
Consider the carrying costs as you evaluate an offer. Ongoing expenses, such as mortgage payments and utilities, could make getting the deal done, at a lower than ideal price, more attractive.
The good news is that we're slowly moving back into a seller's market.
"Some markets are moving more quickly than others," says Brooks. Look at recent sales in your area when setting your price, and consider timing the sale when the market is rising.
More to Know: Stay Safe
Take a tip from the pros and gather basic identification -- name, address, driver's license numbers, license plate numbers -- from prospective buyers before you let them into your home. This precaution could help deter would-be criminals and provides a record for law enforcement authorities in case someone is targeting people with homes for sale in the area.
Also be careful with how you talk about your activities on social media. "While it can be a useful tool to get the word out about your home, you need to remember that there may be a lot more people seeing this information than you imagine," Kuhl points out. "If you post that you are going house hunting in your new destination next weekend, how many people will know that your current home is empty?"