One of the worst things about selling a home is handing over some of the profit to a real estate agent in the form of a commission. After all the 6% commission means $30,000 is gone right off the bat on the sale of a $500,000 home. But you don’t have to see any money go to a real estate agent if you sell your home on your own. DIY home selling isn’t for everybody, nor is it easy, but if you possess certain traits you could save a lot of money. From having a knowledge of the market to maintaining top notch organizational skills, here’s a look at four traits you need in order to succeed with a sale by owner transaction. (For more, see: 7 Things To Consider Before Selling Your Own Home.)
Some of the main reasons you hire a real estate agent is because they understand the market, know how to set the price and are well versed in all that comes with selling a home. But it’s not rocket science. Thanks to the Internet anyone can learn about their local real estate market, granted if they are willing to invest the time. That means searching for comparables or similar homes that recently sold, marketing the property and making sure it is priced right. Go too high and it can sit on the market. Price too low and you are leaving money on the table. (For related reading, see: Selling Your House? Avoid These Mistakes.)
A good real estate agent is going to be able to do all of the above plus have access to potential buyers. A good DIYer follows the same strategies when selling his or her home. To price it right, sellers can spend the money for an appraisal or they can look at what houses in their area with the comparable square footage and amenities sold for and price it around that.
Spread the Word About Your Home for Sale
No matter how accurately you price your home, it won’t matter if no one knows it is for sale. That means you have to possess the ability to spread the word about your sale. That means using social media, placing ads and literally spreading the word to anyone you meet. Yes, you want the “for sale” sign prominently displayed in your front yard but you also want to list it on the Internet or even in the newspaper to reach as many people as possible. After all, the more people see your home the quicker it will sell for. (For more, see: Cut Commissions With “For Sale By Owner” Sales.)
Organization Skills Are Top Notch
If you did your job right and price the house correctly and spread the word as much as possible, chances are you are getting a lot of calls about your home. This is where top notch organizational skills come in. On top of keeping the house neat and the property maintained, you have to return would-be buyers phone calls, set appointments to see the home, and then be available whenever they want within reason. One of the worst things a DIY home seller can do is be unreachable to buyers. People are quick to move on to the next property when they can’t get access to the home.
You Can Weed Out the Good From the Bad
One of the quickest ways to slow down the sale process is choose a buyer who ultimately can’t close the deal. It’s a frustrating and costly situation for the seller. Once there is a contract the house goes off the market, shutting out potential buyers. With the mortgage process taking so long that can easily mean three months the house is off the market if the deal doesn’t go through. Because of the risks, home sellers have to be able to weed out the good buyers from the bad ones. Going with a buyer who is preapproved as opposed to prequalified is a good start. Preapproved means the borrowing process has begun and the lender qualified the borrower based on a mortgage application and supporting documentation. Preapproval can be done online or over the phone, and it gives buyers a ballpark idea of how much they can qualify for. (Read more, here: Pre-Qualified Vs. Pre-Approved - What’s The Difference.)
Down payments and the conditions attached to the mortgage also matter and need to be weighed heavily. If all things are equal, the best bet is to go with the home buyer offering the biggest down payment with the fewest conditions to getting the mortgage. That shows their seriousness and commitment to buying the home. A buyer with no down payment loan could be at riskier bet. All of this requires the ability to investigate and analyze offers to ensure you choose the correct one.
The Bottom Line
Everybody wants to get the biggest profit from the sale of their home but not everyone is going to be able to do it on their own. There is a reason there are so many real estate agents: it’s not an easy job. But if you want to go it alone you better make sure you have certain characteristics. Not only do you need to be market savvy, but you have to be organized, accessible and at the same time possess the ability to market the property.