An “idiot’s” guide to selling home by owner?

Question

I understand every sale/state could potentially be different, but is their such a guide online that gives a STEP BY STEP rundown of who generally does what at what point in the process, along with best practices? All I’m finding is different tidbits here and their.

For example - simply physically handling the deposit check. I’m not even sure at what point in the process this happens or who contacts the title company to hold it or who decides which title company, etc.

Another example - there are a lot of houses in my areas that get multiple offers right out of the gate. I’m not sure how to plan/manage/execute that properly to my advantage.

I know the buying agent will know all of this, but it doesn’t seem wise putting all faith in that.

(Please note: I’m not looking for the official “idiots guide” book. I also understand that “this is what selling agents are for.” I want to give FSBO the old college try ;-) )

Thanks much.

Jay Hinrichs · Answer

the other thing Rick is just studying and getting a license wont really help with negotiations and many of the questions being asked here. Learning how to actually sell happens within the brokerage once you have a license.  Laws and reality of selling are far different as I am sure you know ..  :)   its why an experienced agent is more times than not worth paying for.. Or in this persons case maybe just a small fee based listing agent that will give basic guidelines and let the seller handle the showings etc we see a lot of that on the west coast.

Nathan Gesner · Answer

You don't want to hear it, but it's the truth. I could spend all day trying to make a list for you and I still wouldn't cover all the potential issues that could come up during the transaction.

Here's the truth. You can sell on your own and there's probably an 80% chance you'll make it through without anyone dying or losing their life savings. The reason you want someone knowledgeable and skilled is for the 20% chance that something will go wrong.

You could hire an attorney so you have someone objective looking at the contract and keeping you safe legally. An attorney can ensure your contract has the deadlines and can answer questions like, "Where do I put the earnest money deposit?" Beyond that, you'll just have to take the chance that nothing difficult pops up.

Rick Pozos · Answer

That is kinda why you PAY someone to do all of this for you. They already know all the answers to all your questions. It is a service that you pay for. They have taken lots of classes to get a license.

If someone gives you a list of things to do, there will always be a few little steps that dont get mentioned.

Maybe you could take a realtor class on contracts. Maybe you could take a class on finance. A class on agency. A class on ethics. OR maybe you could just become a realtor because all the time that it takes you to get that knowledge will probably be enough to get your license. Now you can go and make money helping others.

What I am saying is that it is not just 'give me a list of steps' so that I can do this. There is plenty of knowledge involved. Pay for the service. Pay someone who does this every day of their life. Let the experts be the experts. YOU go find deals and make the big money so that you have BIGGER POCKETS!!

Dustin Allen · Answer

@Blake Varner

There is no amazing guide to FSBO because there is no great way to do it.  The only smooth FSBO transaction is one where the buyers agent does the work for both sides for only half of the usual pay.  Some FSBO will pay the buyers agent commission and others won’t. If the buyer has to pay his own agents commission on top of the purchase price, you just lost over half of the potential buyers for your property.

From a listing perspective. FSBO typically sell for 15% less than an agent listed property. Most agents charge 1/3 of that for commission and agree to split that with whoever brings the buyer.  That math alone should make you want to have a good agent on your side.

On top of that, hiring a listing agent puts an experienced negotiator on your side. The difference between me negotiating for my buyers with a FSBO and with a listing agent are night and day. The FSBO doesn’t even know the questions to ask, they don’t know the contract and they miss the chance to counter or even understand certain terms in the contract. It’s not a buyers agents responsibility to explain the contract to you when you are unrepresented as a seller.

Every client I represent has the benefit of free legal advice from my risk management service provider. They also benefit from my expert advice throughout the transaction. We act as a buffer so that the sellers/buyers have time to think and decide about each issue that might come up during the transaction. It’s a lot different than having to negotiate on the spot when an agent calls you directly with a problem.

Do yourself a favor and hire an expert.  If you want to learn the business, get your license and learn the business. It will be a lot cheaper than selling your property on your own.

Jay Hinrichs · Answer

I have never run across a TC that works for mom and pop..  At the end of the day they are probably going to be thrown into things that require a license?   A good TC for a high producing agent is worth their weight in gold..  I  know my wifes is..

Ronald Allen Barney · Answer

Setting aside the boilerplate advice to get a listing agent, and since you want to give FSBO the old college try, let's dig straight into FSBO.

Let's assume for the moment that the market is so hot that all you have to do is put a sign out and about ten to fifteen enterprising investors or ibuyer scouts pounce on the deal, bid war, and you accept a sweet offer and are ready to actually sell to that buyer.  A good title agent will be able to guide you through the transaction process of what paperwork is required from which party and which point in the process.  If it's a cash buyer the process is immensely simplified, obviously.  There will be some required documents, their title search, setting a closing date, etc.  Title companies can also often escrow the earnest money for you.  Often.  If the title company doesn't want to do that extra legwork, or it isn't their company policy, or they just plain don't have the confidence for it, you can hire the services of a transaction coordinator and they will coordinate the transaction for you.

If the buyer is leveraging borrowed funds for the purchase you'll have to be a lot more careful.  Mortgage lenders have their own requirements and even if there are things you and your buyer agree aren't necessary, you can both be overruled by the lender.  Coordinating that communication and anticipating potential problems, a good experienced TC may get you by but now we're getting into the zone of high risk going agentless for the limited reward of saving 6% commission.  Many title companies won't want to coordinate if you're dealing with a lender known to be high maintenance.  An alternative in that case may be to suggest going contract for deed, which is risky for the buyer but safer for you the seller.

For marketing the house without an agent, this is certainly a market where if that can ever be done, now is the time.  You can boost visibility a bit on facebook, landwatch, and some sites dedicated to FSBO deals, that is, if a sign out from doesn't net offers within a week.  If you hit a time limit you have for yourself to sell and still haven't had offers, that would be a good time to start answering the endless stream of phone calls, emails, and door knocks you'll get from agents looking to list for you.  It won't be an admission of defeat, rather, it'll be an admission of having learned a few things.

Marcus Auerbach · Answer

We live in a time where new and better concepts like Uber or Airbnb take over quickly. FSBO is in slow decline at about 4% of the total market volume. The reson is simply that on average the results are not great.

There is a huge difference between a top producing agent and an average agent, and you can see that in their numbers. Top producers just make more money for their clients and they are able to mitigae all sorts of transactional risks. But even an average agent will (on average) outperform a FSBO.

I can honestly not recommend it. You might be thinking just about the part of advertising and showing to get an offer, but what are you going to do when you are under contract and things go sideways? The devil is in the details..

If you want to learn, look on YouTube! You will find people who will tell you how it worked for them. Some transaction go smoothly, but most start going sideways at some point between acceptance and closing. And also, what you don't know is could they have had better results working with a pro.

An “idiot’s” guide to selling home by owner?

Most Popular Reply