on Yahoo!
Private sale wasn't the first strategy that came to mind when Elaine* and her sister helped their father sell his home when he decided to move. However, a lack-lustre response from real estate agents made them think twice about using an agent at all. They figured "why not put up a for-sale sign and see what happens?"
Elaine and her sister aren't alone in their thinking. Some estimates say that as many as one in four people sell their home privately. For-sale-by-owner (also known by its acronym FSBO) is still a new idea to many people, but the increasing amount of information and services available to help is making the idea more appealing. After all, a real estate brokerage can charge five per cent or more in commission to sell your house. More people are wondering: is it really worth it to use an agent?
If you're considering a private sale, here's what you need to know to make it a success:
Think like a sales person
The best place to start is to know your product, and then figure out how to present it to its best advantage. Start by taking notes about the features of your home that a potential buyer might be interested in. Don't just consider what's in your house, but also what's around your house. Are you close to schools, shopping or other amenities? What upgrades have you made to the home, and when were they done?
Once you've got a list, it's time to start formulating your sales tactics. Not only will you need to write ads to sell your home, but you'll also want to prepare a sales pitch to respond to phone calls or unannounced visitors.
Being ready to respond to unexpected questions is also important, Elaine advises. And the more you know about your home, the better. For instance, prospective buyers might want to know how much it will cost to heat your home in the winter or how much property taxes will be. Utilities bills and tax statements can serve as proof. If you've got receipts showing when improvements were made, like a new furnace or new windows -- keep them handy as well.
Develop a budget -- and know how to spend it
Do you get to keep all of the savings in commission we mentioned before? No -- you should expect to spend a portion of that on advertising and other services that would normally be covered by an agent. As with any home sale, expect to spend money to make money.
Doing a little number-crunching before you set out can help you see where money will be well-spent. Remember, you have to pay some expenses, like hiring a lawyer and doing some repairs, whether you use an agent or not. Some services like home-staging consulting can actually add value to your home by making it more attractive to buyers. A home inspection can give you a heads-up as to what needs to be done around your home -- you might want to repair them first, or find out what their worth before you enter the bargaining process.
Research your home's market value
Property listing service PropertySold.ca warns that one of main reasons that private sales fail is that owners overprice their home. How can you get a realistic idea of what your home is worth?
-- Talk to your neighbours, particularly anyone who has recently sold a home in your areas.
-- Check the listings in the local newspaper or online (online classifieds, MLS.ca, etc) to see what homes in your neighbourhood are selling for. (Many cities now have a real estate advertising television channel such as REtv).
63 Comments
LEAVE YOUR COMMENT
You must sign in to leave a commentcharacter(s) remaining