real estate

7 steps lead to for sale by owner success

For sale by owner sign © Joy Brown/Shutterstock.com

If you want to get every possible dollar from the sale of your home this spring, it may be time to stick that for sale by owner sign out in the front yard.

It may be the difference between profit and loss.

People who can sell their homes the for sale by owner -- or FSBO -- way essentially could save 6 percent of the selling price, the money they would have paid real estate agents, says Greg Healy, vice president of operations at ForSaleByOwner.com.

But unless you're living in a model home, there are some things you should do well before you think about planting that sign in the yard this spring.

Following these seven steps should increase your odds of for sale by owner success:

1. Design your selling strategy

Once you determine who your potential buyers are, you can craft a plan to market your home to them. Your approach may be to advertise on online or to put up fliers in local neighborhoods. You can also use online services to list your home on your local multiple listing service, where buyers or their agents will see it. Determining your game plan now allows you to set up a realistic time line and allocate sufficient funds.

2. Know your home's strengths and weaknesses

"The last thing you want as a seller is to be surprised," says Healy. Get a professional home inspection done early so you can identify problems that are almost certain to be discovered and have time to fix them. Even if you don't fix them, you can incorporate the knowledge of any problems into your pricing, Healy adds.

3. Check the property's record

This is the time to make sure there are no liens against your property, says Piper Nichole, author of "The For Sale By Owner Handbook." Go to the county courthouse and ask for help finding any claims that have been filed. You may want to hire a title insurance company to do a search or even a real estate attorney who can help you clear up any problems.

4. Get an objective price evaluation

Spend $300 or $400 to hire an appraiser, Healy says. In the current market, there's no room for wishful thinking about how much you can get for your home. Armed with a professional evaluation, you can price the home more accurately and show the appraisal to potential buyers as an official documentation of your home's value.

5. Research your local market

There's a wealth of information on the Internet about sale prices in your neighborhood to get you started, but you can learn a lot more by doing some literal legwork around your community. "Walk around your neighborhood, and go visit the open houses of similarly styled homes or properties," says Healy. "See if you'll really be able to sell against your competition." The earlier you start the process, the more time you have to see how your home measures up before you put it up for sale by owner. Then, you can either do some minor improvements or price accordingly.

6. Start home improvements

Once you've had an inspection done and visited similar houses for sale, you can start on home improvements that will increase your chances of selling at a higher price. "A lot of times the first thing potential buyers see is the outside of your house," says Nichole. "It can be a huge factor in whether they actually want to see the inside or keep on going." Do a thorough yard cleanup and prune and trim bushes and hedges. Other relatively inexpensive improvements include painting, decluttering, removing furniture and replacing soiled carpets.

7. Pull together your team

You may not have a real estate agent, but you'll still need a supporting cast. A real estate attorney is perhaps most important, especially in the closing process. Many states require sellers to disclose certain types of information about a property.

"It's a real estate attorney's responsibility to tell you all the things you have to disclose, which then helps you with the inspection," says Healy.

Another professional to consider is a mortgage professional -- not just for your use on subsequent purchases, but for any potential buyers who come without being financially prepared.

"If buyers come to your home and say, 'I love your home' and you ask them 'Are you pre-qualified?' and they don't know what you're talking about, you then have a mortgage person you can guide them to," Nichole says.

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