- Real Estate
For Sale By Owner - My Experience
Deciding To Sell Without A Realtor
I accepted a new job about a year ago. I had to move a few hundred miles away, so selling my house was going to be a necessity. Judging by what I read about the current real estate market I knew it wasn't a particularly good time to be a seller, but I had to try. The first decision I had to make was whether or not to list the house with a Realtor. I decided that since I had only owned the house for a few years my chances of breaking even were already fairly small, and I didn't want to add to my losses by paying a large commission. I figured it would be difficult, but it would be worth the effort to save the money.
This led me to do a lot of research on the subject. I fully expected the whole procedure to be difficult, and I considered myself lucky to know some bankers who know the process well.
Listing The Property For Sale
Listing the property was the first thing I needed to do. Having contracts ready and potential lenders lined up wouldn't do me any good if nobody ever saw the house. So I started small. I bought a big "FOR SALE" sign at the local hardware store and put an ad in the local paper.
I tried to reach out and use some online services from there. I wasn't sure quite how effective it would be, since I wasn't living in a major city at the time. I tried listing the house on both Craigslist and Zillow, not expecting much. But the services were free, so it couldn't hurt. I did get a couple of responses from both of those services, which surprised me a little. But most of my responses came from the local paper or people who simply drove by and saw the sign.
Contracts, Lenders, and Migraines
This is where I expected everything to get difficult, or even to fall apart if I couldn't handle it. I was finally getting some response to my listing, so it was time to work on the details. I would need a contract to make the sale. There would be a title transfer (and insurance,) I would nee to pick out a company to go to for closing, and I may even need to help the potential buyer find a lender.
The week or so I spent researching this part of the sale was rather stressful for me. I kept wondering what would happen if I wasn't fully protected by the contract, or if some part of the deal fell through. I finally made a call to the company I had closed with when I purchased the house in the first place. I was pleasantly surprised when they informed me that they would handle everything in a FSBO (For Sale By Owner) deal at no additional charge. All that paperwork - the contract itself, any necessary disclosures, the title search and transfer, everything. So it turns out the only thing I would have needed a Realtor for was to list and show the house.
I saved myself $6000 in commission by opening the front door to my house and showing people around myself, as well as answering any questions they had. Hadn't I already been doing that for any guests or family members that came to visit?
I was nervous about selling the house on my own when I started. After going through the process, though, I realize just how simple it is. As long as you can effectively market the property and show it to potential buyers there isn't much else to worry about. You'll have to deal with professionals who deal with these things for a living (closing company, lenders) in order to make the sale, and they're typically glad to help. After all, they need the business.
I'd recommend giving the FSBO option a shot if you're trying to sell a property. Especially if you are worried about taking a loss on the property. I'll also point out that I rented the house for nearly a year before making the sale, which I wrote about here. Both renting and selling were new experiences for me, and I learned a lot along the way.