In the spirit of entrepreneurial endeavors, some people choose to try and sell their own home in order to save the real estate agent's commission. The primary decision depends on your ability to carry out the marketing & transaction based on the your available time and money. According to the National Association of Realtors, 13% of homes sold in 2001 were "For Sale by Owner's". They advertise, produce flyers, show customers the property, negotiate, prepare documents and close.  Homes that sold with the assistance of a real estate professional had a median sales price 27% higher that those sold FSBO.

In order to sell on your own, you should do the following:

All these require a lot of time, still cost money, and may demand real estate expertise. The other drawback one must seriously consider is that FSBO properties are not exposed to the brokerage community, and to the many buyers that brokers work with. Over 85% of all residential property sold in the United States is sold through a real estate agent.

What will an agent do for you:

1. First, an experienced agent will prepare a set of comparable properties similar to yours that are currently on the market and another set that have recently sold. These lists will be used to realistically position or price your home in the market place. This is by far the most critical step. It is imperative you don't overprice your home to the point that it sits on the market too long without activity, thus making the property "stale". Even price reductions usually do not bring buyers back to "stale" properties. Obviously pricing your home too low is a waste of money. Just going with an agent that prices your home the highest is not always your best options. Ask the agent how they arrived at their price, a well trained agent will be honest with you and explain their process.
2. A well developed marketing plan is the next step. What is the target market? What publications will the property be best seen in? You should have extensive Internet exposure, multiple listing entry, published open houses, possible TV exposure (added expense to the agent usually), direct mail, and periodic progress reports.
3. A good Realtor will screen potential buyers. This saves you a lot of time. Instead of herds of people, you get a select set of what you want: qualified buyers. Making your home available for showings can be arduous, and un-rewarding if the preponderance of people coming through are not qualified. A Realtor can help with this greatly.
4. A Realtor will negotiate the sales price and manage the bid process. This can become delicate particularly if there are multiple bids. Which procedure do you use?  Manage the bid process with care and diligence, thus maximizing your yield and improving your terms.
5. The real estate agent coordinates everyone's schedules (e.g. buyers, sellers, agents, brokers, mortgage providers, escrow officers) Statistics show that most people who begin selling on their own generally turn to the assistance of a broker after about three months.

Buyer Traffic Theory

The "Flood" of buyers usually happens in the first 21 days

If the property is not positioned properly in the first three weeks, the “flood” of local buyers is lost. The future pool of buyers “drip” into the market. This limited pool of buyers decreases competition, lessening the odds of receiving your highest probable selling price.

Tips for you to sell your own home:

The first thing to do is put your house in the best possible condition, particularly if you are in a market with a lot of homes for sale and few buyers. This means taking care of major items such as roof leaks, broken windows, etc. The next thing to do is work on curb appeal. Cut the grass, clean up any debris around the yard, weed the gardens. Wash the windows inside and out and plant some flowers near the entrances (time of year permitting). On the inside of the house, fix any electrical deficiencies and any plumbing leaks. Reduce the clutter in each room & closet. Straighten up the attic, basement & garage. Eliminate any foul pet smells, litter boxes, animal beds, etc. Bake a batch of fresh cookies before an open house and place some fresh flowers around the house and especially near any property information you may have for potential buyers.

What are the standard contingencies?

Most purchase offers include two basic contingencies: first, a finance contingency, which makes the sale dependent on the buyers' ability to obtain a loan commitment from a lender, and second, an inspection contingency, which allows buyers to have professionals inspect the subject property to their satisfaction. The purchase agreement must include the seller's responsibilities, such as delivering clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.

Am I obligated to disclose important information about a property?

In most states, it is the seller's obligation to disclose information about a property. Under the law, you are required to disclose all facts affecting the value or attractiveness of the property that are known to you. This may include, but not limited to: neighbor's constant barking dog, homeowners association dues; whether or not work performed on the house meets local building codes; and any zoning restrictions on the use of the property.

What is the difference between market value and appraised value?

The appraised value of a house is an appraiser's opinion of value of a home at a specific point in time. Mortgage lenders require appraisals of a property as part of the loan process. Market value is what price the house will sell for at a specific point in time. A comparative market analysis (CMA) is an approach that real estate agents use to estimate the market value based on recent sales of similar properties. The "market value approach" appraisal is a very accurate method, precisely comparing features of your house to multiple subjects, yielding the most accurate potential value at that point in time. A comparative market analysis is the most cost effective (usually free) yet less accurate way to determine what is the value of your home.

Pricing your home:

A properly positioned or priced home is already half sold! It is imperative you don't overprice your home to the point that it sits on the market too long without activity, thus making the property "stale". Even price reductions usually do not bring buyers back to "stale" properties. Remember, A home is only worth what someone else will pay for it.

Do I have to consider contingencies?

If you are a seller in a seller's market, in which there is more demand than supply, you probably won't have to entertain too many contingencies. But if you are selling in a buyer's market, when buyers are few, prepare to be very flexible. Granting contingencies also depends upon what kind of price you want to get and on the condition of your property, most experts agree. Remember, contingencies are written into the contract and are negotiable during the negotiation phase only.

Is there a secret to good negotiating?

There are a few key rules to negotiating effectively. First, do your homework! Educate yourself as much as you can about the buyer. Conversely, the less they know about your reasons for selling, the better. Keep quiet about your position and don't reveal too much information to the buyer or their agent. Remember, their agent is working solely for the buyer in this situation. Don't get rushed into a decision, hire someone to help if you are uncomfortable with negotiating.

Good Luck!

Helpful Info