For Sale by Owner (FSBO) is a popular method of selling properties. Many people use this approach if they don’t want to lose capital gains by having to pay a real estate agent. In some cases, it’s more advantageous in hot markets or in-demand neighborhoods.
Still, FSBO is not as easy as it sounds. Selling a property in Minneapolis, MN and other areas takes a lot of effort. There are also plenty of pitfalls that can result in an unsuccessful sale. Thankfully, Real Estate Corners has shared tips to help you out. Keep reading to learn more about what to avoid during FSBO.
Forgo Working with Professionals Altogether
So, you’ve chosen not to work with a real estate agent. That’s perfectly acceptable, but you shouldn’t go without any kind of professional help altogether. A lot is happening in these transactions, and you will need help from experts. There are two types that are essential in selling a home.
- Real Estate Attorney: Unless you’re confident about your legal knowledge and the real estate selling process, then, don’t hire an attorney. But most of the population won’t be, and there are a lot of legal proceedings in selling a house. It’s better to have one at your side for matters like escrow and purchase agreements.
- Property Inspector: These professionals assess the state of your property, checking for issues with safety, structure, and other areas. They can help you prepare a report and identify problems you need to fix before marketing the property. In addition, an inspected property is more appealing to home buyers than one that isn’t.
Getting Too Attached and Emotional
This is a common unaddressed pitfall, especially for first-time home sellers. It’s understandable that many of us are attached to our homes, but this emotion can hinder your sale. Many might not want to do any staging to preserve the look of their interior. Some might turn down good offers early on because saying goodbye so soon is difficult.
What you need to do is see the sale as a business transaction because that’s what it is. This perspective will allow you to be more objective about your decisions.
Setting an Unrealistic Property Price
As a rule of thumb, overpriced homes don’t sell, so make sure that you perform a comparative market analysis to see the average value of homes in your vicinity. You can use this as a frame of reference for your property. In addition, don’t be afraid to undersell. This can attract more home buyers, giving you more opportunities to negotiate a higher price.
Expecting to Settle with the Asking Price
In connection with the point above, you should always expect home buyers to negotiate. It’s their right, after all. There may be some that won’t, but those are rare cases. Because of this fact, don’t go out there expecting that the asking price will be the same as the final selling price. What you can do instead is assign an asking price that gives you more room to negotiate.
Not Considering Security
Selling a property usually means letting strangers into your home during an open house. While most of them will behave professionally, you can’t be sure that all of them will. Some might have ulterior motives like stealing items during the tour so make sure to secure valuable items like jewelry, medications, and electronics when offering house tours.
Concealing Major Issues
You can’t sweep big problems under the rug. Not only is this a deceitful practice, but the issues will eventually be found by the home buyer. They will usually request another home inspection as part of the purchase agreement, and the inspector will spot the problem. What you can do is address the issues ahead of time, or let the prospective buyers know from the get-go.
Forgetting to Stage Your Home for Prospective Buyers
Staging is the process of beautifying your home for tours and visual media for marketing. This is one way to attract more buyers and highlight the best features of your property. Failing to do this can turn off buyers, especially when the property looks too “lived in.” So, browse interior design sites, read Feng Shui articles, and learn all you can about staging your property.
Not Marketing the Property Properly
Marketing your property is a guaranteed way to increase reach and visibility, which then quickens the home selling process. Statistically, you’re more likely to sell faster by having your property added to the Multiple Listing Service (MLS). So, make sure to use digital channels as well as traditional marketing tactics. Use posters, hold open houses, and enlist a limited-service or flat-fee agent who can list your property on the MLS.
Not Performing Due Diligence
These days, verbal agreements are all but binding. So, in a major transaction like selling a home, you must perform due diligence. This means making sure that every real estate-related document is scrutinized, validated, or reviewed. This includes purchase agreements, inspections, and titles.
Selling to Unqualified Home Buyers
One of the biggest pitfalls you can get trapped into is selling your home to an unqualified buyer — one that doesn’t have the capabilities to finance the transaction. So, make sure to ask for a pre-approval letter from their mortgage lender. If you’re working with a cash buyer, you can ask for proof of funds.
There’s also the matter of buyers who are dependent on the sale of their previous home to fund their purchase of your house. Be careful around these since it might be difficult to reach your target closing date if they’re unable to sell their property on time.
Final Thoughts
FSBO is possible, and it’s a great way to maximize your profits. However, you might feel discouraged because of the many pitfalls you could face. Follow our tips above to help you navigate a real estate transaction successfully.
If you instead want to work with a real estate agent but dislike paying commission, partner with a flat fee agent instead! Contact Real Estate Corner today to learn more.
Sources:
https://www.goldenstatehomeinspections.com/ideal-advantages-of-seller-home-inspections
https://www.washingtonpost.com/realestate/remember-home-buyers-you-have-the-right-to-negotiate-everything/2012/06/14/gJQAO4fLdV_story.html
https://realtyna.com/blog/what-advantages-using-multiple-listings-service-mls/
https://www.investopedia.com/articles/mortgages-real-estate/08/home-seller-mistakes-selling-house.asp
https://www.sparefoot.com/self-storage/blog/22683-avoid-these-nine-for-sale-by-owner-mistakes-when-you-sell-your-home/
