Selling a house by owner in 2022 is not without its challenges. It is particularly a task for FSBO sellers to garner profits in the market which is set to cool off. According to research, more than 70 percent of the FSBO homes sell out within two weeks after the MLS listing. This is an encouraging number for GenZ, boomers, and millennials to consider going FSBO. Almost all FSBO sellers turn to the internet to sell their houses as this very concept is based on high technology and speedy results. Here is how you can sell a house by owner in 2022.
1: FSBO – Meaning and definition
FSBO translates to For Sale By Owner which is self-explanatory. In FSBO, sellers do not engage with any realtors and hence save up on paying for their commission which comes to 6% of the total sale amount. With this method, sellers get to walk away with maximum profit. With technology gaining a lot of relevance in recent years, more and more sellers from all age groups are encouraged to go for this method.
The process of selling a house is very technical, complicated and a lot of red tapes are involved in the same. Therefore, sellers now choose a hybrid model of selling where certain key responsibilities are allotted to experts while retaining the key autonomy. This is called the Flat Fee MLS service. You essentially pay a pre-decided amount to this service and in turn, get MLS listing, showing and closing assistance, and digital documentation among many other benefits. This is a pay-per-package service that takes some load off the sellers but also saves their precious dollars.
2: Keys to being a successful FSBO seller
First and foremost, an FSBO seller must be well researched and in tune with the local market changes. Being an FSBO seller also requires you to have great contacts with the local real estate agents to get an inside insight into buyer behavior at a local level. Other than this, the FSBO seller should a good at negotiating and should have all facts right.
Selling a house in America has a lot of legal bindings. FSBO sellers should complete their paperwork to the T with no space for any loopholes to avoid further litigations. Disclosures, permits, and affidavits should be in order before the house is up for sale.
Other than that clarity, honesty, and awareness of the field will guarantee a good deal for an FSBO seller.
3: Benefits and Problems of selling a house by owner
The first and foremost advantage of selling a house by owner is that you get to pocket a sizeable number of profits which you save as commission to the realtor. Another benefit of course is that you get total control over your deal and that way, the process is faster and more profitable.
One of the major disadvantages of selling a house by owner is that you might sell for a lesser price than the market value. Secondly, if you choose a Flat Fee MLS service there is a chance that you would be charged extra dollars at the time of closing. FSBO sellers need to be wary of that.
Thirdly there is a chance that you would not be able to complete all the paperwork in time and your deal might fall through because of the same. Also, there are a lot of disclosures and permits which need to be taken care of. Sometimes a seller cannot do all the legwork and get the papers in order which could lead to issues post-closing.
4: Pricing and prepping the house
To get the pricing right is half a battle won for the FSBO sellers. For this, they need to have a hang of the local market conditions so that they don’t sell their property for less or list a higher chance and curb buyer interest.
Unless the FSBO seller does not plan to list the property ‘as is’, basic repairs and re-painting need to be undertaken. it is important to prepare the house for sale before even listing it. A well-prepped house will fetch you a great price.
5: Marketing and staging
Marketing – online and offline both. Is very important for selling the house. Social media marketing is very aggressive nowadays and hence FSBO sellers should be hi-tech in their approach.
Yard signs, and billboards, customized to sell the house will also fetch a lot of buyer interest. Most importantly, it is necessary to hire a professional photographer to click pictures of your house. A good set of photos with the MLS listing is a sure-shot way to attract more buyers. Since buying is a visual medium, a good portfolio of the house will surely get a lot of attention from the right buyers. They will also justify your listing price. First impressions are lasting, even in the field of real estate.
6: Documentation and disclosures
Having your documents in order is one of the most critical and complicated processes, but it needs to be done as FSBO sellers get the credibility and see a successful sale if they get this right.
Main documents, common across all states, are:
- Closing Disclosure
- Bill of sale
- Title Certificate
- Statement of closing costs
- The Deed
- Property tax bill
- Mortgage documents
- Survey documents
- Home warranty
- Homeowners Association Certificate (HOA)
- Loan payoff
- Home inspection report
Disclosures needed by the FSBO sellers are:
- Lead Paint Disclosure
- Sellers Disclosure
- Transfer Disclosure Statement
- Flood Disclosure
Handling closing is no child’s play and many inexperienced FSBO sellers are at the risk of accepting a lesser price for the house. Also, a lack of proper documentation will lead to the deal not materializing or worse, legal trouble post-closing.
FSBO sellers can take help from the experts for closing. Houzeo’s premium plans (Gold and Platinum) offer full closing assistance including a review of different offers to help you choose the best one, virtually.
The most important factor to be considered is the closing costs. Sellers should predetermine this so that they can price their property accordingly and have a realistic estimate of the profits at the end of the deal.
Closing costs include realtor commission (which does not apply to the FSBO sellers), attorney fee, title insurance, transfer tax, property tax, etc.
Selling a house in itself is a tedious process. To make things easier sellers hire realtors but it is expensive so how to sell a house by owner without a realtor? Paying for a Flat Fee MLS package seems to be the most plausible solution. FSBO sellers need to be cautious of the hidden charges by these services at the time of closing. Also, the services need to provide sellers with advanced technological solutions. Houzeo seems to be the best bet because they are known for transparency, hi-tech solutions, great customer service, and a widespread reach.
If you have any property to sell, now is the time because the market has just about started to cool off because of changing fiscal conditions like rising mortgage rates.