As you begin the journey of selling your for sale by owner home without the help of a real estate agent you will inevitably encounter roadblocks that need to be addressed immediately.
The biggest decision you can make is setting the right list price for your property. Otherwise, marketing it gets even harder.
But that's easy right?
Using Other Active Listings You Find Online to set your price is Dangerous
Many homeowners will jump online and check the price points of nearby homes and then price theirs based solely on a quick "eyeball" of this information. As many FSBO sellers eventually discover when their home sits on the market, this is not an accurate way to set a price that gets your property sold and fetches the best value.
It's this balance between getting as much as you can and getting it sold at all that proves most difficult for non-professional sellers. Most of the time, it's due to simple psychology - pride of ownership inhibits a seller's ability to be as realistic as possible. It also hurts that few, if any FSBO sellers have access to all the "black and white" local market and trend data to keep them, well, more honest.
Of course, you can always list your property for whatever number you want, but that does not mean it's in line with what the buyers are willing to pay or that it compares well "apples to apples" with other homes in terms of location, features, age, amenities or current market tastes - a big problem that could lead to a home always being selected against when in a side-by-side comparison.
When determining a price for your property you may want to consider having a professional assist with getting you additional information even if not a Realtor.
Real Estate Agents aren’t the only professionals Who Can assist You With pricing
One professional who truly can help an FSBO seller in determining the right price for their home is an experienced home appraiser.
If you're planning to sell your own home in the first place, you are, of course, hoping to get offers from buyers. Since over 50% of buyers obtain mortgages when purchasing a property, your deal too will likely be subject to buyer financing.
If a buyer is using financing, the mortgage lender will always require that the property appraise for the purchase price to cover their loan of the money. As an FSBO, it's hugely beneficial for you to get the property appraised prior to placing on the market. This way, you can set the list price in line with current market prices and be reasonably assured it will appraise when financing comes into play for your buyer. It's a great way to avoid the heartbreak of your sale falling apart when the homes doesn't appraise down the line when the bank checks your price skill versus the actual market price for your home. Worse yet, if this happens to you as an FSBO seller, have very little leverage in negotiations and must either adjust the price down for the buyer or wait for another buyer who will not need to obtain financing for the purchase of your home; something that always lowers your odds of a sale.
Besides lowering the risk of a surprise on both sides, an appraisal also helps you justify your price to sellers trying to talk you down or use the old "well, Zillow says..." trick when trying to get a deal.
Most appraisals only cost a few hundred dollars as well - still way lower than the real estate commission you'll need to pay when having a professional help set your price for you.
Price. Get it right, get sold. Get it wrong and, as they say, "one problem often leads to another."