3 Mistakes To Avoid When Selling A Home “For Sale By Owner”
As is the case with many things in life, not everything is puppies and rainbows. Occasionally, even the best of scenarios can take a turn for the worst. And some even start out bad. But is that the case when selling a house for sale by owner? Read on to learn three mistakes to avoid when selling your home for sale by owner (FSBO).
A few stories
Let’s look at a few different FSBO stories. At the end, we’ll discuss what went wrong, and how you can avoid those things.
Be helpful. Don’t hinder
Morgan Franklin, a homeowner selling her house on her own, explains what went wrong with her process. “I was so eager to showcase my home that I hung around during showings, which was a huge turnoff to potential buyers. I thought I was being helpful, pointing out extra storage and other features, but looking back, I realize now that I was just an annoyance. And, I overpriced the house, which is another common FSBO error.”
Be creative and safe
Jay Seier a for sale by owner seller said, “When trying to sell my home myself, I was approached by a ‘creative investor’ with an offer to lease my house for five years. The buy-out price he named was well above market, and I would have cash flow of about $500 a month above my mortgage. Who wouldn’t take that deal?
“But what I didn’t realize by not reading the fine print was that he was able to sublet the property—which he did. I wasn’t prepared for that, and I didn’t like the feeling that I’d lost all control of my home for five years with all my equity tied up in it.” These types of sales are not all bad. There are many reputable companies that do these creative options. However, do your homework before accepting these terms. Make sure you understand the contract and ask a lot of questions. Referrals from previous sellers would be a good thing to ask for. In the end, if you don’t fully understand the contract, or you’re just feeling uneasy with it, don’t sign. Speak with a lawyer or simply walk away from the deal.
What would you do it if you hired an appraiser, and they undervalued your home? This is where Pam Mayhew found herself when she was selling. She says that, “I had a beautiful townhouse listed FSBO, and got it under contract with my own marketing to a veteran. What I didn’t count on was that the veteran’s VA loan would be killed by an inexperienced appraiser who severely undervalued the home and didn’t even use local comparable sales.
“I didn’t know that with a VA loan, a bad appraisal sticks with the house if another VA buyer should come along—something I’m sure a real estate agent would have known.” In the end, she got it figured out, but this is a good reminder not to commit to anything before you know what exactly you’re signing yourself up for.
What to take away
There are a few key take-aways after reading these stories, but first, there is a general rule of thumb we want to mention. Namely, your own personal safety. Nothing is more important than this, and generally, it’s up to you to be responsible. If you’re selling your home on your own, ask someone to be your partner, who can help keep you safe. They’ll help you read the fine print, and also hang out with you when it comes time to vet potential buyers. Scammers have a harder time duping two people, as compared to just one.
For the most part, no one purposely overprices something. But you do have to find a balance between too low and too high, as we learned from Morgan Franklin. If you can find an appraiser you trust, then that’s great and definitely helpful. If not, your own research and scouting out the market in your neighborhood will help you a lot.
Be available but not irritating
Another tip we learned from Miss Franklin was to be sure you don’t become a hindrance to buyers. She mentioned she wanted to showcase her house, but that it only irritated the folks looking. Thus, when showing your house, staying low profile is what we would suggest. Telling the viewers something like, “I’ll be in the kitchen if you need anything!” is a great way to be available, but not in the way.
Know who you’re working with
This tip applies to the last two stories together. Knowing who you’re working with, and trusting them is a big deal. You need to know that they’re trustworthy and reliable, as well as honest. Find someone who has good reviews, and that people like and recommend. In the end, it’s worth your time to research and find someone good, so that you don’t become the victim of a scam.
As one final reminder, your safety is the most important thing. When it comes to showings or open houses, be sure to keep in contact with a friend, so that someone knows your OK. After all, you can never be too safe. And if you’re interested in more things FSBO related, check out this article on how to get your home noticed!