Real estate trends have changed post-pandemic and how! With the advent of the Work From Home scenario in the United States, a lot of millennials hitting the age bracket of 30-35 years started looking for affordable housing and that led to the real estate market boom in the period of 2020-2022. The status now is that to control inflation, mortgage rates which had fallen considerably have risen again. This has led to the softening of the market to a certain degree. Sellers who are sitting on a hot property that they wish to sell now is the time because while people are still looking for housing, the demand has slowed down considerably due to larger economic reasons. The traditional method to sell a house is to find a full-service real estate agent but now the majority of the homeowners go online for their sale needs and buyers spend a lot of time on the internet, browsing through listings and locking down on the desired properties. Here is how to sell a house by owner
1: Selling a house by owner: How to sell a house by owner
Selling a house by the owner is termed For Sale By Owner (FSBO). This has largely become a very popular method to sell homes only because of one big reason: Substantial savings as the sellers do not have to pay commission to an agent. By definition, selling a house by the owner means taking full authority of selling one’s property and adopting a Do It Yourself approach to handle the pricing, listing, showing, and finally closing. It also means solely taking all the risks and invariably the profits attained through the property sale. There sure is an advantage but also several risks like getting lost in the paperwork, selling the house for a lesser price, and most importantly not being able to manage the red tape and other legal formalities of the sale. Following are guidelines to make sure that you crack a great deal despite going on an FSBO route.
2: Best time to sell a house
What is the best time to sell a property? The demand for housing rising as per the change in season and mostly before a new term for school starts. May and June are considered hot months when maximum property sales are recorded in the United States. FSBO sellers should start their preparation well in advance and list their houses at least four months in advance to capture this trend.
3: CMA to get the pricing right
It is important to be bang on with your pricing in the listing itself. FSBO sellers should get a Competitive Market Analysis (CMA) done to gauge the market rate of their property and then list the price accordingly, keeping an adequate margin for negotiation. It is tricky to get the pricing right for first-time house sellers but they can sure take the help of an expert for this. If the demand is high in your area, you can push the price of the house by 10% but you have to come down slightly if you want to sell your property in a stipulated time and it is off-season or the demand has dropped down due to socio-economic reasons.
4: Online and offline marketing
Getting a professional photoshoot done and displaying high-definition photos along with the listing, and syndicating the same with other real estate websites would guarantee increased buyer interest. Getting customized yard signs, lock boxes, and printing brochures and pamphlets are other ways to market houses.
Social media promotion is needed in today’s time and age to guarantee more exposure. One needs to be internet savvy as people from all age groups including the millennials, boomers, and Gen Z now goes online for all their needs pertaining to real estate.
5: Staging and presentation
You can choose to sell your house ‘As Is’ if you have inherited this property from ancestors or it is a distress sale. But doing repairs and renovation is always recommended before putting up your house on sale. Staging is making your house and positioning it as a saleable commodity. Basic decluttering, cleaning, painting, etc are a few ways to stage the home for sale.
6: Ways to Sell a house by owner
With so much flexibility in the market, sellers are spoilt with options to choose from to get a bang for their buck. Following are the most popular means to go FSBO, but with some aid.
A: Flat Fee MLS
This is the most recommended mode to sell your house by owner in the United States. Flat Fee MLS companies give precise services for the package opted for by the seller. Everything from quick listing on MLS, photoshoots, marketing help, showings management, closing assistance, and most importantly, digitization of documents. Houzeo is one such company that enjoys a rating of 4.9 on Trustpilot. It has great customer service, cutting-edge technology, and affordable rates to begin with.
Flat Fee MLS companies give sellers a pay-per-package option that is convenient for them. It creates a win-win situation where the sellers save up on 3% of agent commission directly but also get some benefits of a real estate agent, but in a virtual format. They also have the option to pay 1% or a fixed rate like $999+0.5%, depending on the service and particular package chosen, and get full service by an agent in an online or offline setting.
Flat Fee MLS is chosen for its flexibility, transparency, affordability, and the autonomy it gives sellers over the transaction.
B: Discount Brokers
Discount brokers, as the name suggests, offer full services but at a discounted rate. So if the commission is 6%, they peg their fee at a much lower rate, for example at 3.5-4.5%. They are also called flat rate brokers. FSBO sellers need to do their due diligence in choosing an agent.
C: Low commission estate agents
These types of agents drop their fees and offer services at a lower commission than the usual 6% fee demanded by the full-service agent. With more and more options to sell houses, real estate agents have started lowering their rates. They handle more than one client at a time, to reach their target. Sellers thus do not get personalized service in this model.
7: Selling a house as an investment
Investing in real estate has been pegged as a profitable enterprise since always. Hence, sellers who assume the role of investors are basically looking to make maximum profits and hence FSBO selling is recommended for them.
A: Flipping
Flippers usually buy a property, stage, market, and then eventually sell it. They make profits with the difference earned in them buying the property and the eventual sale price of the same, after considering the After Repair Value (ARV).
B: Real estate wholesale
Real estate wholesale does require less capital and the deal here is more fast-paced. In some states, its legality is questioned because the wholesaler does not buy the property nor is the same in his name, he only assigns the contract of the sale to the end buyer and facilitates the transaction. He receives fees for the same from the seller. Also, he gets to keep the profits if he manages to sell the house for more dollars than the pre-decided, promised amount.
8: Closing: Beginner’s guide
Not all FSBO sellers can do the closing of the deal with the ease, experience, and panache of a seasoned real estate agent. There are many documents to be verified, disclosures to be submitted, and Deed and Purchase agreements checked. But it is not mean that homeowners who choose to sell their houses on their own cannot master this technique. Preparedness and estimation of closing costs will ensure a successful FSBO sale.
9: Conclusion
Clarity, confidence, and honesty will take sellers a long way to close a deal, successfully. It is possible to earn profits if you plan to sell the house to the owner. It is just that it requires a lot of dedication, research, and preparedness. It is also important to acknowledge one’s limitations as an FSBO seller and take help as and when required in form of Flat Fee MLS or a discount broker who can walk you through the technicalities of the transaction and also aid to finally get you max profit.
