The 10 Most common mistakes made when selling your house FSBO (For Sale By Owner)
1. Curb Appeal
This is the single most important reason why some FSBOs sell and others do not. I have personally bought homes FSBO and done nothing more than a yard makeover for $500 to $1000 and sold the home for $15k to $20k more. Take a close look at your house. How is the paint? Is it cracked or needing a fresh coat? How are the hedges and bushes? Do they need trimmed? How about weeds, are they under control? Could your yard use a few decorative stepping stones? Maybe a fresh layer of bark or landscaping stones? Make the house look as new as possible from the curb the few hundred dollars you will spend will make you thousands more I promise.
2. Sales Price
So how much are you asking for the house? This is a question you shouldn’t answer quickly. In my experience less than 10% of home sellers actually know what their home is worth. Not knowing can not only cost you thousands of dollars but several additional months waiting on an offer as well. Home values are established based on other comparable or similar homes sold in the area. This however is still no guarantee. If you need to move quickly or have already bought another house, you may wish to consider lowering your price by 6 to 10% to sell it quickly. (Listing with an agent will cost you that much anyway). Even if you don’t list with an agent I have seen many people make an extra 6 payments on a house to get an extra $2500.00 more. It doesn’t make financial sense to hold out for every penny when you need to sell.
Presentation is everything. Don’t show your house unless it is thoroughly cleaned. Before showing it. A dirty house is the kiss of death for many FSBO on the market. Buy scented candles and burn them 30 to 60 minutes before showing the property, a nice inviting smell makes a big difference as well.
The Kitchens and the bathrooms are the most important rooms of the house. If they are in need of repairs then get the repairs done. The condition and appearance of the kitchen and bathrooms constitutes 60% of the buyers decision. So money spent sprucing those areas up is a smart investment.
To most people marketing means putting an ad in the paper and that is the end of it. What I am talking about is a marketing plan. Start with putting you house on a FSBO website like Owners.com or ForSaleByOwner.com Be descriptive about you house but concentrate on describing a feature then a benefit. Describing just features is not a good plan. Example #1. ½ acre lot makes it great for big family parties. Example #2. 5 Bed 2 baths for your growing family. Example #3. Spacious Family room gives your children plenty of room to play. Now that you have your FSBO website ad done put your add in the paper with the listing ID so that curious buyers can go to that website and see the pictures. Give out your email address as well as your phone number so that curious buyers can contact you.
5. Flyer Design
I have seen some terrible designs in my life. Writing a flyer that won’t wind up in the garbage can is not that hard if you follow the right steps.
1. Keep the flyer Feature/Benefit oriented. Remember to answer the question “What’s In It For me?”
2. Include a picture of the house in its current state so it will be easy to remember which house the flyer is from. (If you can include a picture of the inside as well.)
3. Put payment and price info on the flyer as well so prospective buyers will know right away if they can afford it or not.
4. Make sure you reference where online they can see more photos and make it clear how they should try and contact you.
6. Preparedness (Having a Lender and preliminary numbers worked up)
It will help you if you already have a lender you can send prospective buyers to. A business card from the mortgage office as well as a stack of empty credit applications is a great way to give your buyers a push in the right direction. If they don’t have a lender already then you can give them a push in the right direction. Get from the mortgage company that you are working with a good faith estimate so you can quote a possible payment and interest rate.
I have called on many FSBOs in my lifetime and it still amazes me the number of people that never answer the phone, even have an answering machine or even return calls. Make sure that you answer as many calls as possible. If you cant answer the phone all the time make sure you have an answering machine do it for you and return every single call. On your message give them your email address and tell them you will be able to answer their questions via email as well.
8. Saving Nickels v.s. Losing Dollars.
Don’t worry about paying a few hundred dollars to a FSBO website and/or magazine. It is money well spent when you consider a 6% commission on a $200,000 house is over $12k. In my experience many sellers for the sake of saving nickels step over dollars to do so. Don’t be afraid to spend a little money to sell your house. The best kept secrets of investors are that most of the time just doing the things in this list is all it takes to sell your home.
9. Not working with agents.
I understand the trepidation most people have with working with agents. Some of it is warranted some of it is not. Don’t automatically rule out working with agents. I have known many people that to avoid listing there $100k house have spent $10K in payments and expenses to do so. It sometimes makes good business sense to work with an agent. Just make sure that it is on your terms and not the agents.
10. Final Preparations
Once you have completed get your final preparations set up. At the very least you need a “For Sale By Owner Sign” and some sort of outdoor literature holder. Either an Info-Pak or Info-Tube will work great for that. If you property is off the beaten path or deep inside a subdivision then I highly recommend buying some directional signs to point traffic your way. Buying some strings of pennants is another way to make sure that people know your house is for sale. String them up across from the roof of your house to the corner of your street. If your home is vacant when you sell it you may also want to consider purchasing a lockbox to keep your keys in so you can grant access to agents or lenders that may need quick and easy access to the property. For around $125.00 you can get most everything you need for final preparations and it will make all the difference in the world.