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FSBO Tips

PRICING & PREPARATION
Nearly 90% of FSBO sales fail. Don’t let it be you.

According to the 2007 NAR Profile of Home Buyers and Home Sellers, For Sale By Owners (FSBOs) only succeed in selling their own home 12% of the time.  Most give up and hire a broker, and regret ever attempting to do it themselves. 

PRICING: Most FSBO's are overpriced (as are most MLS listings initially, but the good agents convince seller's to reduce the price periodically) . With all the property valuation tools available online today, overpricing should never happen, but it does.

MLS EXPOSURE: The smart FSBO sellers use the MLS by listing with a flat fee MLS broker, saving the 2-3% listing commission, then reward a buyer’s agent with a commission, normally 2.5% or 3%. Most flat fee brokers will list for under $500.

PHOTOS: Some MLS systems will allow 24 photos, so maximize this feature. Make sure you post every possible photo you can.

PRICING: Yes, again, pricing is key, see the graph below:

Got It Priced Right?  Now use these FSBO Success Tips:

Besides overpricing, MOST FSBO's FAIL DUE TO POOR PLANNING  AND NEGOTIATIONS 

DON’T USE 17 DAYS:  Pay close attention to the Purchase Contract, (RPA-11, page 4, paragraph 14, A) As the Seller, you have 7 days by default to furnish your buyer with all the relevant documents, reports and disclosures that pertain to your home, but the buyer has a leisurely 17 days to review and accept those items! That could stretch into 24 days (7+17 = Limbo) before you really know if you have a solid deal, AND the buyer may still cancel the sale if they have any loan or appraisal contingencies in effect.  You can shorten the buyer’s inspection period to a more reasonable 7 or 10 days,  but only IF you have your “stack of documents” ready to hand the buyer immediately upon acceptance of the contract.  Better yet, you can provide them BEFORE the buyer makes the offer. Remember: The longer you protract the buyer’s inspection process, the longer they have time to get cold feet, get talked out of it, find a better deal, or simply change their minds. 

Your "Stack of Documents" must Include:  

  • Preliminary Title Report (see below for how to save 35%)

  • Real Estate Transfer Disclosure Statement (C.A.R. FORM TDS-11)

  • Lead Based Paint for Pre-1978 Housing (FLD)

  • Natural Hazards Disclosure Statement (NHD)

  • Smoke Detector Statement of Compliance (SDS-11)

  • Water Heater Statement of Compliance (WHS-11)

  • Seller’s Affidavit of Non-Foreign Status (AS-1)

  • Supplemental Statutory & Contractual Disclosure (SSD)

  • Database Disclosure (DBD-11)

It would also be very wise to provide the buyer the following:

TERMITE CLEARANCE: Get your termite report AND the termite clearance early. If you are part of a home owners association, you may need to contact them for their vendor. If you have a maintenance contract with a pest control company, you might get a free or discounted clearance.

HOA DOCS: Order your HOA Documents if you are part of a home owners association. These are often difficult to obtain quickly and may cause delays.

PHYSICAL INSPECTIONS: Although it is customary that the buyer hire his own inspector, smart home-sellers are proactively obtaining a physical inspection by a reputable inspection service, and making the repairs before the sale. The report may cost $300-$400, but it is proven that homes sell at a higher price if there are no repairs required, and will enable you to negotiate the Buyer’s Inspection Period from 17 days to a more reasonable 7 – 10 days. (less Limbo)

NATURAL HAZARD DISCLOSURE STATEMENT: As shown above. Note: Do not attempt to “do it yourself’ on this one.  For 50 to 100 bucks, depending on your area, you can get a comprehensive report from a professional third party service that relieves you of 7 years worth of liability. A no-brainer.

PRELIMINARY TITLE REPORT: As shown above, the purchase contract specifically requires that you provide the buyer with a Preliminary Title Report within 7 days. Upon request, Entitle Direct proactively provides you with the report. Contact Steve Pringle, EntitleDirect.com, (866) 993-4004 immediately and a copy will be rushed to you.  steve.pringle@entitledirect.com  or www.entitledirect.com  

HOME WARRANTY: Some Home Warranty Companies offer a special deal and actually cover your property WHILE you are selling it! Because most buyers will make it a sale condition anyway, why not spend the couple of hundred bucks now and cover your property now? Stuff happens! It might save you buying a new water heater or air conditioner! 

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