02:09 Flat Rate or 1% Listings
03:26 Pre Sale / Home Prep
04:17 SOI or Sphere of Influence / Those You Know
05:00 Marketing is Important
05:41 Media is Important
06:14 Price it, Don’t ZzzEstimate It
06:57 Sales Plan, Identify Your Buyer
07:49 Contract to Close, Get an Attorney at Minimum
08:33 Closing Time
09:09 Bonus Round: It’s Not Rocket Science
Hello there! If you’re new to the channel, my name is Joshua Smith, I’m a REALTOR, investor, Dad, among other things. This is the kind of thing you can find on here often so please Like, Subscribe so you can be notified when I do more like this! If you’re coming back for more – “hey there”.
Let’s talk about selling your house yourself. Leave the agent out of it, or at least have them play the smallest role possible. Let’s not pretend that I’m trying undercut my own business here. Full disclosure when I talk about the ins and outs of listing a house and the work I put into it, to most homeowners it sounds like a full time job – because it is. I wouldn’t get paid if it wasn’t work. But this video is not a step by step, “how to sell your house”, video. None of these things are intended to be scary, but they are all based real-life scenarios that I have encountered. As a REALTOR, on behalf of my own clients, and for any future opportunity with a for sale by owner listing, these are just things I think you should be aware of so you don’t end up in these situations. These are 10 things to know to sell your house yourself.
F-S-B-O (fizz-boh). There are many resources out there for the people that want to do it all, the For Sale by Owner. You can list the property on Zillow, Trulia, etc, on your own as a homeowner. You dictate the price, the terms, the description and all the things. My first question to you is, have you sold a house yourself before? Because this route can bite you in the butt. The basic pro is that you don’t have to pay for a listing agent. The biggest problem is that you’ll be flying solo, so it’s not for the faint of heart. I’ve sold both residential and commercial FSBOs to buyers, but each time the price was always different than the actual value which dictated our offer and was sometimes a shock to the owner. It also seems to create a lot more work most of the time for a Buyer’s Agent, for attorneys, for you the seller. Another option if you haven’t sold a property on your own in the past, or even if you have and you’re just looking to control costs, might be to hire an agent at a flat rate or at a low percentage, typically marketed as a 1% listing.
But, here’s the scoop on both versions of a Flat Rate listing. Yes, they will get on the MLS which broadens your market reach tremendously and in fact might cost you less because you’re paying for bulk syndication vs one-off listings directly with Zillow, Trulia, etc. Yes, they are charging you what they say they are charging you for their portion of the sale. But, it’s really just a service to get your required paperwork signed for agency and the MLS, you still have to determine compensation to offer the Buyer’s agent. These agents who market their business in this manner – I find – also tend to not offer marketing services, negotiations, pre sale duties, post sale duties, contract management, scheduling, coordinating, etc. You’re doing all that or you end up paying a bit more for it. This is still a “for sale by owner” route. And the thing to remember with both for sale by owner options is that real estate contracts are subject to a statute of limitations that lasts years in most states. So you really need to be careful about negotiations, communications and contract handling. Which brings me to the next few points.
Let’s get the house ready to sell. Step 1, home prep. Consider the curb appeal, paint anything that looks unappealing, remove anything smaller than a grapefruit from the shelves, anything personal or identifiable especially if it illustrates a controversial issue or could violate discrimination laws. You want it to be appealing to anyone that comes through – but especially the buyer that will work for you. You also need to make sure in Tennessee and other Seller Disclosure states, that you have a property condition disclosure ready to give to a buyer. You might say, “oh I’m selling as is”. You still have a legal responsibility to disclose anything you know about the property. And I’m here to tell you, even if you’re in a “Buyer Beware” state, it’s better to disclose what you know for the current purpose of sale, and avoid any future dilemmas created by non-disclosure.
Once you feel it’s ready to go, your paperwork is ready, then you can start talking about it. Use your sphere of influence, or “SOI” as you might have heard it referred to. Start asking neighbors, family and friends if they know anyone looking for what you have. There are Facebook groups you can post to and try to solicit some interest. If you know any agents, I’m telling you, we know a lot of people. I mean, if you don’t know any agents and you’re in my markets, or maybe you just don’t like other agents, I want to know about your house! Because I always have buyers looking and some of the best deals I’ve done happened off market. This SOI is the starting point to find out how much interest there might be and maybe get an offer.
After that, if you don’t have a buyer, put together a marketing plan. Marketing is important and you need a plan of action. I can’t teach you how to write one, this is not the platform for that. I can’t even tell you what will work for you without looking at your house. But I can say that if you don’t know what you’re going to do every week you’re on the market, at least two weeks prior to going on market, you’re behind the 8 ball. Think about open houses, changes in price if showings aren’t successful, how to reach more people if there isn’t enough interest. Put more thought than you think you need, into this.
Media is important. I do 3d tours, videos, fly a drone sometimes, photos are key – the more photos you have the better your chances of success. Why? Because the MLS, because search engines, because if you don’t you will not be indexed the same as those that have more media. Not just more media, high quality media. It’s weird how these things work, but I’m telling you the more media you have the more weight your listing will carry. And it helps to have options to change up the marketing as you go.
Pricing? Accurately, price the property. An appraiser isn’t going to give you value for your pool, but a buyer can. What happens if you get a buyer willing to pay your price, but the appraisal comes back low? It happens and it can ruffle sale, in fact it can kill a contract if the Seller wants to keep the purchase price the same but the Appraisal contingency cannot be fulfilled. The buyer has every right to pull out and get their earnest money back. A broker price opinion based on comparable property in the area is a good way to get this. Your Zzzestimate is not. Too high, too low, the wrong price can hurt your chances of success.
Have a sales plan. Planning, it’s essential. How are you going to attract the buyer that is the perfect fit for the sale you want to make? Most people don’t think about this. Something we used to do back in my ad agency and campaign managment days – we would produce what’s called a Buyer Persona – it’s a primary element in finding the right buyer for your property. You should have a plan of action that will attract that person no matter how hot the market is. I see gorgeous properties sit in the busiest housing markets because no one put any thought into who was actually going to buy it. All the materials were looking for someone that didn’t want the house. A plan to get in the eyes of a ready, willing and able buyer is your best bet.
Once you’re under contract, locate and engage an attorney right away. I see a lot of owners that do transactions often using their personal attorneys both during negotiations and bringing the contract to close, but title companies have attorneys, can hold earnest money in a trust account as part of a transaction and also coordinate the closing, and they don’t charge as much, typically, as a personal attorney. That’s the minimum. Now, there are key performance dates to adhere to during a transaction. These can change based on the contract, the contingencies, but it’s important to make sure that all parties are playing their part. An attorney likely will not help in ensuring the performances are happening, but if you or the buyer become at fault, at minimum there is an attorney involved to help resolve matters.
Alright, closing time. You’ve done the deal. The deed is written. The money is at the title company ready to roll out. As you can imagine, things can change up to the last minute. Maybe the appraisal didn’t come back in time so loan docs aren’t done. There’s a final walkthrough, even though the buyer has accepted the house as-is after the initial inspections, if they find the home in a condition other than what they expected based on the initial viewing, they have the right to pull out or request repairs or changes be made. If the contract falls through based on this, they can get their earnest money back because you may be at fault.
In conclusion, selling a house is not rocket science. It could be the easiest thing you do this year… or it could be the absolute worst. You just have to be careful how you handle the proceedings and make sure the contract is fully ratified to the best of your ability for all parties involved. But we’re in the bonus round now… you hung around this long, so let me shed one more piece of advice before I go. If you’re planning to list a house, land, a commercial property yourself, but any number of these things is something that scares you or you have questions about. Call an agent to clarify any points you have questions about. Any good, responsible agent I know will help you with the information you need, and they may also be willing to work with you at a reduced rate according to your situation to help with the costs you want to avoid. If you don’t know who to call, just call me, I’m the guy that answers those numbers I advertise. I will help however I can.
Until next time.