Cracking the FSBO Code: The 7 Steps to a Successful FSBO Sale
The real estate world has changed drastically in the last decade. Many homeowners are embracing the trend of selling their homes independently, also known as For Sale By Owner (FSBO). Embarking on an FSBO journey can be a rewarding challenge, requiring dedication, time, and a touch of salesmanship. This guide will break down the seven key steps involved in a successful FSBO sale.
Introduction to FSBO Sales
For Sale By Owner, or FSBO, is a process where homeowners take on the responsibility of selling their property without hiring a traditional real estate agent. This choice is often motivated by the prospect of saving the hefty commissions usually awarded to real estate agents, typically ranging between 5-6% of the property’s sale price.
I am one of those traditional real estate agents. I have over 20 years of professional experience and I’ve broken down the sales process to these 7 steps. They’re not comprehensive, and other agents would omit some of my steps and perhaps add others. I created Project FSBO to provide the instruction, tools, and resources for people like you to meet with success selling your own home.
What you can expect to takeaway from this article
I wrote this article as an overview of the process to give you an idea of what is entailed in selling your own home. The purpose isn’t to rigidly define the process, but to provide general steps, or categories, that should be addressed. These 7 steps will serve as a jumping off point as you dig deeper into your FSBO journey.
You will understand the main steps of the FSBO process and identify what skills you have to learn for a successful FSBO sale.
Project FSBO is full of articles, resources and content that dives deeply into every aspect of the process. I welcome you to explore what we offer and learh the good, the bad, and the ugly of selling your own home.
The 7 Steps to Selling Your Own Home Are:
- Consult an Experienced Real Estate Attorney
- Prepare Your Home for Sale
- Price it Right
- Have Professional Photographs Taken
- Marketing and Advertising Your Home
- Show Your Home
- Negotiate Your Price and Close
Step 1: Consult an Experienced Real Estate Attorney
To ensure a smooth and legal FSBO sale, hiring an experienced real estate attorney is a must. Although this might add to your initial expenses, it can save you from future legal pitfalls. A competent real estate attorney can help you understand your legal responsibilities, draft or review sales contracts, and guide you through the closing process.
Some localities do not require that a real estate attorney participate in residential real estate transactions. My advice is that irrespective of whether one is required, you should have one on your side. There’s too much at stake.
PRO TIP: Don’t risk legal exposure!
Selling your home is likely the largest financial transaction of your life. I have seen too many real-world examples where people looked to save a buck by skimping on legal counsel. It is essential to comply with all laws, codes, and disclosure requirements on local, state, and federal levels. Compared to the amount of money involved, the cost of an attorney is a small price to pay for peace of mind.
And as a bonus tip, be sure that you choose an experienced real estate attorney familiar with your area and your type of property.. Your cousin Fred who is a personal injury lawyer may offer to help you for free, but that’s a big mistake. Go with a pro.
Case Study: Proper legal representation
I had a client who was selling her co-op apartment for $1,300,000. When purchasing a co-op, you must be approved by the co-op board without reservation. The buyer misrepresented their financial status, and the co-op board only conditionally passed the buyer. (They would have to put a substantial sum in escrow). The buyer didn’t want to do this and attempted to get out of the contract. It was only because the seller’s attorney was sharp, that he made a strong legal case that the seller would not have to return the $130,000 contract deposit if the buyer walked. The buyer didn’t walk, and the deal completed amicably.
This article presents an overview of the main steps in the FSBO process. We have a lot more content that covers each of these topics in depth. You can find out more about the legal facets of the FSBO process here: FSBO Essentials: Navigating Legal Hurdles in Selling Your Home Yourself.
Step 2: Prepare Your Home for Sale
Home staging plays a pivotal role in making your property attractive to potential buyers. This process often involves decluttering, repainting, making necessary repairs, and sometimes updating certain features of your home to maximize its appeal. Remember, first impressions matter immensely when selling your home. Ensuring your home is tidy, well-lit, and smells good can make a significant difference in attracting potential buyers.
What many sellers don’t realize is that making your home look it’s best directly pays off in a higher sales price. The average literature about FSBO skips this entirely, only focusing on saved commission. With the experience I’ve attained by visiting literally thousands of homes, I can personally attest to the fact that homes that show well can attain 5%, 10% or even more than an equivalent property in bad condition.
Project FSBO has articles that address this step in detail. What is especially important about preparing your home, or more broadly, “curb appeal”, is that a home that shows well will almost always sell for a higher price than a similar home in run down condition. So not only do you save money in commissions as a FSBO seller, if you take control over your property’s appearance, your can potentially achieve a much higher sales price.
Case Study: Home preparation
I sold a condominium for an retired Broadway actor. He had painted the walls and ceiling of his living room a dark chocolate brown. He thought it “soothing”. My wife and I recommended that he paint it white to brighten up the space, but our seller stuck to his guns.
As a compromise we suggested that we hold the first open house and have him pretend to be a buyer and observe the reaction of the visitors. The response was overwhelming revulsion from everyone who entered. Most turned around immediately and left the unit.
Our seller saw the light. He had it painted white, and the unit sold at the next open house for full asking price.
Dive deeper in to the art and science of home preparation with this article: First Steps to a Successful FSBO Sale: Preparing Your Home for the Market
Step 3: Price it Right
Determining the right price for your home can be one of the most challenging aspects of an FSBO sale. To price your property competitively, it’s necessary to carry out a Comparative Market Analysis (CMA). This analysis involves comparing your home with similar properties in your area that were sold recently. Remember, overpricing can lead to your home sitting on the market for too long, while underpricing may result in a lower profit.
Overpricing a property is the most common problem I experience everyday in the market. More than any other factor, pricing has the biggest influence on how long it will take to sell, and what you will eventually get for your home.
We have many resources available on Project FSBO to help you with this crucial step.
Look behind the scenes on how the professionals come up with pricing strategies here: Understanding FSBO Home Valuation: A Seller’s Guide to Pricing Right.
Step 4: Have Professional Photographs Taken
In the digital age, potential buyers will likely view your property online before they see it in person. High-quality, professional photos can showcase your property in its best light. Including a virtual tour of your property in your listing can provide a more in-depth view, creating a strong impression and attracting serious buyers.
In our real estate office, we had a “Wall of Shame” of really bad real estate photos. Things like toilet seats up, dishes in the sink, and reflections of the photographer in mirrors are more common than you would think. Ask yourself this:
“Would you pay full price for a home with newspapers piled on the couch in the photo?”
Learn more about preparing for and choosing the right photography solution for your home. The Essential Role of Professional Photos in FSBO Home Sales.
Step 5: Marketing and Advertising Your Home
Effective marketing is the key to reaching the right audience. This includes listing your property on popular real estate websites, leveraging social media platforms, and utilizing search engine optimization (SEO) strategies to increase the visibility of your listing. Traditional methods like placing a “For Sale” sign in your yard, creating printed flyers, or networking with local communities can also be beneficial.
The more qualified buyers you reach, the greater the chance for a quick sale at a great price. While it’s true that traditional real estate firms have the edge in this category, the online landscape has evolved so much, that your FSBO listing can be very competitive.
Advertising and marketing is a critical aspect of FSBO success. Delve in to the details here: Effective Marketing Strategies for Selling Your FSBO Home.
Step 6: Show Your Home
Successfully showing your home involves flexibility, readiness, and a touch of salesmanship. Make yourself available to answer inquiries, arrange private showings, and host open houses. Treat each showing as an opportunity to sell your home. Emphasize your home’s unique features, improvements made, and respond to the prospective buyers’ queries professionally.
I’ve been selling real estate professionally for many years, and I’m still amazed at how many Realtors “show” a home with “This is the living room. This is the kitchen …etc.”. You want to paint a picture for the buyer. The idea is to have them imagine themselves experiencing the great moments of their life in your home – their new home!
Showing your home is your opportunity to feel out the buyers and determine their level of interest. Learn some great techniques and tips with this article: Mastering FSBO Home Showings: Essential Techniques and Strategies.
Step 7: Negotiate Your Price and Close
Once you’ve attracted a potential buyer, the process of negotiation begins. Having a bottom line and being ready to make counteroffers is a critical part of this process. Once you agree on a price, your attorney can help you understand the contract, manage escrow, and navigate through the closing process.
As with all the steps, Project FSBO offers articles and resources to help you with negotiations. We share our combined 60 years of experience of not only selling real estate, but in formally training our fellow agents in negotiation tactics and skills.
Close the deal! Read our series of articles on negotiating skills and closing the deal beginning with: Winning Negotiation Tactics for FSBO Home Sellers.
Conclusion: Embarking on Your FSBO Journey
FSBO might be challenging, but with the right resources, preparation, and commitment, it can certainly be rewarding. Following these seven steps, from consulting a real estate attorney to negotiating and closing, can guide you through the journey of selling your home independently and successfully.
Taking the Next Steps
Do you want to find out more about if FSBO is right for you? Circle back to the main article for this topic: Expert FSBO Guidance and Education for an Anxiety-Free Home Sale.
You can return to the previous article in the series “Is FSBO right for you?” HERE.
Or jump ahead to the next article in the series: How to Maximize Success with FSBO.
Frequently Asked Questions (FAQs)
What are the common mistakes to avoid in FSBO sales?
Common mistakes include overpricing the home, not preparing the home adequately for showings, failing to market the property effectively, and not understanding the legal requirements of selling a property.
How can I make my home more attractive to potential buyers?
Ensure your home is clean, decluttered, well-lit, and free from odors. Consider staging the home professionally, making necessary repairs, and possibly updating some features.
What is the role of a real estate attorney in an FSBO sale?
A real estate attorney can help with understanding your legal obligations, drafting or reviewing the sales contract, and guiding you through the closing process.
How can I effectively negotiate the sale price of my FSBO sale?
Know your bottom line, stay open to negotiation, and be ready to make counteroffers. Professional appraisal and a firm grasp of the local market can help you hold firm on price.
How long does the FSBO process usually take?
The timeline for an FSBO sale can vary depending on market conditions, the property, and the price. On average, it may take a few weeks to several months.