10 tips for selling your own home
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).
— Have a professional appraisal done.
Many people invite an agent (or a few agents) in to get an opinion. The feedback can certainly be useful, but this isn’t the only number you should rely on. In Elaine’s case, the quoted price was too low so they used other means to estimate the home’s worth.
Develop a marketing plan
Where and how will you get people’s attention? If you’re in a high traffic or well-travelled area, a for-sale sign might be enough to get people looking. However, you should consider a balanced approach that also includes listing your property online and taking out a print advertisement in a local publication. You may also want to consider hosting an open house as part of your plan.
Don’t underestimate the importance of networking. Let your friends and colleagues know that your home is for sale, or put up a poster at your church or community centre (if allowed). Take advantage of social networking sites like Facebook where you can advertise your home.
Keeping track of advertising, phone numbers and appointments can be tricky, so it’s best to think about your strategy ahead of time. PropertyGuys.com recommends purchasing an appointment diary or calendar to help with this process.
For clarification and transparency in the process, be sure to keep track of the details such as names, dates and any next steps in the process such as where and when you take out advertising. You can also use your diary or file to keep track of your budget.
Set the stage
Most home experts agree: how your home looks will have a big impact. Potential buyers typically look for clean, spacious and bright homes. Tackling clutter is usually the first thing home stagers recommend, but some thorough cleaning and a fresh coat of paint will make your home more attractive. Stashing your personal items — whether it’s family photos, knick-knacks or every day items like your tooth brush and shampoo — will make buyers feel less like a guest in someone else’s home.
If you want some extra help, hiring a home-staging consult for an hour or two can be worth the investment. If you’re looking to keep costs down, Elaine recommends bringing in a friend instead, particularly someone who will give you an honest opinion. Give them a practice tour of your home and take note of the feedback. Online articles, TV home decorating shows and magazines are also inexpensive sources for good advice.
Need a little help? Try our expert tips on staging your own home.
Prepare for negotiation
Now’s the time to dust off those bargaining skills. Are you ready to negotiate the price, or handle a potential bidding war? Also, don’t let the thought of deals and contracts scare you off if you’re not an experienced seller. Here’s where your real estate lawyer can help: They can evaluate the terms of any contract and help you evaluate any offers. They can also advise you on what you need to disclose about your home.
Another thing to consider: Just because you’re not using an agent, doesn’t mean a buyer won’t. That agent will have to be paid somehow — so either advertise “no agents, please” or be prepared to account for his or her commission in the asking price. You might be able to negotiate a flat fee rather than a percentage.
Think about safety
There’s going to be a lot of attention on your home and its contents, and there is some risk involved when inviting strangers into your home. So what can you do to stay safe?
– Enlist help. For their own safety, Elaine and her sister agreed to both be present for appointments with potential buyers. If one or the other (or one of their husbands) wasn’t available, they had a plan to invite a friend instead. Two people can provide better supervision for touring groups or open houses.
– Hide it. Anything that can be broken or stolen shouldn’t be around. When it comes time to sell her own home, Elaine already has plans to find safe, temporary homes for the jewellery, electronics and other valuable items — whether it’s with a trusted friend or the safe deposit box at the bank.
– Go for the lived-in look. If you have to be away from your home for any length of time, use a timer for some lights and ask a neighbour to park their car in the driveway if necessary. Empty homes are the perfect target for thieves — some of who may have been by the home to preview its contents.
– Protect your privacy: Consider using a cell phone or setting up a new email address to handle communications instead of giving out your personal contact information.
Elaine cautions that having a thick skin is essential for the process as potential buyers won’t be shy when it comes to nit-picking the details of your home — especially when it comes to pointing down flaws that might help bring the price down. Try not to take it personally; a real estate agent wouldn’t get defensive or upset.
“You have to be ready to hear criticism about your home — whether it’s the decorating or layout, or things that need to be fixed,” Elaine warns. “Overall, you have to be impartial and divorce yourself from it.”
Just because you decide not to use an agent that doesn’t mean to you have to “go it alone”. There are many services such as, PropertySold.ca, Bytheowner.com and For Sale By Owner that offer listings and sales tools for a modest fee. Other companies like PropertyGuys.com include marketing support and listings as part of an overall consulting package — which is still the fraction of a cost of an agent’s fee.
For more information on getting your home ready for market, the Canadian Home and Mortgage Corporation has a guide about Getting Your House Ready to Sell, as well as current market trends and outlooks.
As previously mentioned, there’s a wealth of information available online, in magazines and even on TV — not to mention the many books written on the subject which you can find at your local library or bookstore.
This method of selling your home isn’t for everyone, but it might be worth a try before you turn to an agent. In Elaine’s case, taking a chance paid off. They were able to sell the house quickly, and for more money than the agent initially predicted — and they didn’t have to pay a commission either.