How to sell your house yourself Archives

4 Ways To Sell Your House

A house for sale with a dog in the front yard

When it comes time to sell you house you have options. Some more expensive than others and an actual free option. There are actually 4 ways to sell your house. I’m going to discuss those different ways here and the cons and pros of each.

Using A Real Estate Agent/Realtor To Sell Your House

Hiring a real estate broker and using one of their agents is by far the most popular and well known way to sell your house. Often the first thing that comes to a potential home sellers mind is hiring a Realtor. Hiring a Realtor is effective and will get a home sold but it’s also one of the most expensive.

If one does go the Realtor route make sure you shop around. With all of the real estate market and listing information free to the public, experience isn’t as important as it used to be. Commissions are important because that’s what eats up your profits. You can find agents that will list your house for less than the usual 6%. Keep in mind when interviewing agents that we are trained to convince you that we are worth it.

Whether or not you hire a real estate agent or not has to do with your personal opportunity cost. According to Zillow the average home price in the U.S. in August of 2021 is $304,000. Assuming you have an average priced home a 6% commission will cost you $18,240. Is the time it will take you to sell your house worth more than $18,240? If so then you should consider hiring someone to sell your house for you.

Pros

The pros to hiring a real estate agent are an agent will do most of the paperwork for you. An agent will help you to price your house and let you know what you should do to get your house ready to sell. Realtors guide you through the process and help to schedule inspections, appraisals and closings.

Cons

The cons to hiring a real estate agent are, of course, the huge expense.

While not so much a con, but a realization, you should know an agent will let you know what you need to do to get your home ready to sell but it’s still up to you to do it. That means repairs, updates, cleaning and anything else that needs to be done is still on you.

An Ibuyer Will Buy Your House

Ibuyer companies to help sell your houase

An Ibuyer will buy your house directly from you outright avoiding the anxiety of listing. With an Ibuyer you avoid opening your home to strangers for showings, unknown repairs during the inspection process, waiting for the home appraisal and fretting over your buyers financing. No need to sell your house on the open market when using an Ibuyer

Don’t mistake these for the many flippers that are working the real estate market. Ibuyers are not flippers. You see those signs on the side of the road that say we buy houses. It’s not those people. An Ibuyer will give you close to market value for your house, maybe a little less than you could sell on the open market. There is a service fee that averages around 5%.

An Ibuyer will make you an offer. If you accept there will be an inspection of the property and then a final offer including any repairs that the Ibuyer deems necessary. Sometimes Ibuyer’s can be a little more expensive than a real estate agent after repairs and everything is said and done but there’s no doubt they are super convenient.

Ibuyers are starting to gain traction in major US cities. Home sellers are attracted to the stress free aspect of selling a home using an Ibuyer.

Pros

The pros to using an Ibuyer are the convenience, speed and the assurance of the final price without the anxiety of waiting for offers as you sell your house.

Cons

The cons to using Ibuyers, again, is the cost. Ibuyers can be expensive and you may get less money for your house.

Wholesalers Will Buy Your House (We Buy Houses)

Wholesalers are another group that will buy your house outright. The difference between wholesalers and Ibuyers is wholesalers want to buy your house for a lot less than what it is worth. Their goal is to buy a house as cheap as they can get it and resale it, or “flip” it at a significantly higher price.

Wholesalers mostly look for homeowners that are in distress such as being close to foreclosure or underwater. Sometimes the more unscrupulous sort will prey on older people, new widows or widowers or folks that are in desperate financial stress.

When dealing with wholesalers make sure you fully understand the contract you’re signing and the implications it can have on you in the future. Many times the homes are “bought” and the house is still in your name but sold or rented to someone else. Wholesalers make your mortgage payment while collecting the difference as profit. The clause in the contract can be left open so the wholesaler has no deadline to get the mortgage paid off and taken out of your name. It’s like a free ride for them but ties up your credit.

If you can’t sell your house because your underwater consider renting it out and using the rent to pay down the mortgage until you can pay it off.

Pros

Using a wholesaler will get your home sold fast. If your underwater or in financial stress a wholesaler can really be a big help.

Cons

Some wholesalers can be unscrupulous and not fully explain the implications of the process. Getting involved with this type of home sale can tie up your credit for years. It is highly recommended that you hire an attorney to look over your contract and explain it to you.

The wholesalers goal is to buy your house as cheaply as possible. Make sure you know what your house is actually worth.

Sell Your House Yourself

For sale by owner sign in front of a house

By far the best option when it come time to sell your house is to do it yourself. That’s where you’ll make the most money with the least expense generating the most profit. When it comes to disrupting the real estate industry that is what’ll do it. When regular people figure out how easy it is to sell a house.

Real estate agents know how easy it is. That’s why there are so many of us. Easy money.

New agents aren’t taught how to sell a house. Selling a house is easy. Mostly what we learn in real estate school is real estate law. Real estate coaches and brokers teach us how to fill out paperwork and to convince you that it’s difficult to sell a house and why you need us.

Most people shopping for homes find them on their own on sites like Zillow. When you sell your house yourself and market it on Zillow home shoppers will find it and call you directly.

Some home sellers think that the MLS is the way to go. By hiring a real estate agent you can get your house on the MLS but there is also a less expensive way. Hire a flat fee service. A flat fee service will list your home on the mls for a fraction of the cost that a listing agent will charge you. Keep in mind that using a flat fee service means you are willing to pay a buyers agent, usually 3% of the contract price unless you can negotiate a better deal.

Pros

When you sell your house yourself you get to keep all your money. It’s the most profitable way.

Cons

When you sell your house yourself you have to do all the work. While it’s not hard to sell a house it can be time consuming.

How To Use A Flat Fee Service To Get Your FSBO on the MLS

by Joel Weihe

What is a flat fee service?

If you’ve ever wondered where all those homes for sale on sites like Zillow and realtor.com come from, they come from the multiple listing service or the MLS. The MLS is where real estate agents and their brokerages put houses that they’re listing for sale so they’re all in one place. They can share those listings with each other through their membership in the MLS. Sites like Zillow and Realtor.com pick those home listings up from the MLS and put them on the internet for all to see. All means potential buyers, and, of course, looky loos.

We’re going to talk about how you can get your house on the MLS as a for sale by owner without paying those high commission listing fees. Hiring a real esta te agen t to list your house for you is expensive. You can learn to do all of the tasks an agent does for you and use a flat fee service to avoid commissions.

Check out my You Tube channel that will show you what you can do to get your house ready for market, price it right and anything and everything else to sell it on your own.

Flat Fee Service

If you want to put your For Sale By Owner on the MLS, which some people think is super important but I tend to disagree, there’s a way to do that without hiring a listing agent. And that’s by using what’s called a flat fee service. There are a lot of them out there. These are companies that will put your house on the Internet for one fee.

That fee can range anywhere from $300 up to a $1000 and sometimes even more. The price will depend on the service that you want.

Some of the services include;

How long you’re going to have it on the MLS,
How many pictures you want to put out.
If you want to have somebody help you fill out the paperwork
Some of them will give you fliers that you can print out.
A sign for the yard

There are more than several of these flat fee type companies to choose from. The original, forsalebyowner.com, founded in 1999, was the one that started it all.

Since then for sale by owner flat fee services have become more and more popular. It’s a much less expensive way to list your home on the mls where not only do consumers find It on sites like Zillow, but Realtors see it on their platform, the MLS, also.

To name a few;

Different flat fee services will work in different states. Some of them are licensed in all states. Google it, flat fee service or how to get my For sale by owner on the MLS. This is a great way to get your house on the MLS. While I don’t believe completely necessary, it will get more attention and it might help it to sell a little bit faster.

Real Estate Agents

Keep in mind that by putting your house on the MLS you’re saying that you’re willing to work with, and pay, a buyers agent. A buyers agent is the agent that is showing the buyer homes. The bonus part is that the agent will then do all the paperwork for you.

Part of a Realtors job is to help you price your house and show you how to get it ready for market. You definitely don’t need to hire a real estate agent to price your house for you or to show you how to get it ready for market. I can show you how to do all that. There are videos here that will show you all you need to know. Using that and a flat fee service you’re doing everything an agent does for you, at a fraction of the cost.

Selling your house is really not that difficult. Everything a real estate agent does for you, you can easily do yourself from pricing, to preparation to listing whether you want to use the MLS or not.

What Is Earnest Money and Why you Need It

by Joel Weihe

Handing over earnest money for a house he wants to buy.

When selling your house yourself you must understand what is earnest money and why you need it. Home sellers often overlook this in For Sale By Owner transactions. That is an enormous mistake and here’s why;

Bt providing money your buyer is showing that they are serious about buying your house. So how does that work?

What is Earnest Money

You put your house on the market with sites like Zillow for all potential buyers to see. Showings are scheduled and people view your home. When one of those people makes an offer, the two of you negotiate a contract. Once you’re in contract it’s important to understand the purchase is not yet complete. They have not paid you yet but your house in now off the market. It’s not showing up as for sale anymore.

That’s why you collect earnest money at the time of contract signing.

Earnest money is a good faith deposit your buyer puts down to hold the house in contract while they go through the closing process. The closing process can comprise:

Processing the buyers loan to get financing.
Doing a title search to clear the title.
The appraisal which will determine the value of the house.
Any inspections the buyer has done.

Having money on the line keeps the buyer from changing their mind. It keeps them in contract with you.

How Much Should You Get

How much earnest money to collect is determined by several factors like where in the country you live and the price of the house.

In Wichita KS where I work the sums are relatively small. Our average is $500 to $1000 which is not much of a deterrent.

In some parts of the country like California, for instance, earnest money demands are much higher. 1-3 percent of the contract price. With an average sales price of around $580,000 that can be an excellent reason to be sure about a contract before the buyer signs. They stand the possibility of losing $10,000 or more.

Every state is different, so you’ll want to do a little research to see what they expect where you live.

Provides Protection

Earnest money protects both you, as a For Sale By Owner, and your buyer.

You’re protected because now the buyer has skin in the game. They are less likely to walk away from the deal when they stand the chance of losing money. If they walk away, then you keep their earnest money.

There is nothing to prevent your buyer from continuing to look at homes for sale. Earnest money prevents the buyer from finding a new home and ditching your deal. If the buyer backs out for any other reason than contract contingencies, they give up the money to the seller.

Earnest money protects the buyer by showing you, the seller, that he is serious. In a multiple offer situation the amount of earnest money can be the difference between which offer is accepted.

If two offers are very similar, the one most likely to stick will have a better chance. The offer with the most earnest money at stake.

For example, if you list the house for $300,000 and one buyer is offering $500 and the other is offering $3000 the offer with $3000 at stake is more likely to close. They have more skin in the game.

What Happens With Earnest Money

Once the earnest money is collected from your buyer it’s deposited with the title company, real estate brokerage or law office. They hold the money in escrow until closing.

While not technically a deposit, they will apply the money towards the buyers down payment or closing costs.

The contract you and your buyer use will most likely have contingencies written in that concern earnest money. Those contingencies are there to protect the buyer.

Contingencies

Financing

When you’re looking at offers one thing you look for is a pre-approval letter from a reputable lender. This tells you your buyer can get the financing needed to buy your house. If your buyer’s financing should fall through for whatever reason it kills the real estate deal, You will then be obligated to return the earnest money and put your house back on the market.

That’s why when looking at offers financing is an important consideration. Your buyer’s financing matters.

Reasons the financing can fall through are;

Loss of job. If your buyer loses his job, the bank will not lend the money needed to buy your house.
Surprise medical expenses. If something serious medically happens costing a substantial amount of money, it could cause the financing to fall apart. Anything that changes the buyer’s debt to income ratio can affect their ability to get financing. Which brings me to the nest point.
Major purchases. If your buyer goes out and buys a car, or anything that requires a loan, it could kill the deal by canceling his pre-approval. A good lender will warn the client not to make any major purchases, take out any credit, deposit or withdraw sizeable amounts of money or do anything financially out of the ordinary. You should also reiterate this to your buyer. I personally have had more than one deal fall apart because a buyer did something that affected the ability to get a loan.

Most home sales are financed so your buyer’s financing is a very important part of the real estate transaction.

Inspections

A buyer has the option to preform any inspections they want to. That may include;

A general home inspection from by a home inspection company. This is an overall visual inspection of the property. Most home inspectors aren’t experts in any particular component like plumbing, electrical, roof ect. but have a basic limited knowledge of overall home construction.
A Radon test is a popular inspection as we know more and more about radon and its health consequences.
My favorite inspection on older homes is a sewer scope. I have a good idea of what’s a good investment and what is not, but I can’t see the sewer. A sewer scope can see inside the sewer. Sewer repairs or replacement is a major expense, so it’s important to know that the sewer is in excellent working condition.
Getting a roofing company to come out and inspect the roof. To have the roof replaced is another major expense. I don’t solely rely on a home inspector’s opinion about the age and condition of a roof.

What does all this mean to you? If an inspection turns up potential problems, the buyer can ask you to have those problems fixed. While it does not require you to do so the buyer may back out of the contract and get his earnest money back if you can’t come to an agreement.

Repair negotiations have a lot to do with market conditions. In a seller’s market, where there is limited supply and strong demand, you have the upper hand. In fact, in this seller’s market of the Summer of 2020 many sellers are putting their homes on the market as-is.

A preinspection prior to listing is always a good idea so you can solve these problems before you go into contract.

The Appraisal

The appraisal is the most anxious and important part of the transaction in any market. The bank will only loan as much money as the house is worth and that’s what the appraisal determines. If you have done the work and priced your house right you should be ok.

If the house appraises for at or more than the contract price, congratulations, you’re almost to the closing table. You did a good job of pricing your house, hopefully not leaving any money on the table.

If the house doesn’t appraise you and your buyer will need to renegotiate the contract. That means either you lower the price down to the appraised value or your buyer has to make up the difference in cash. If you can’t come to an agreement, the buyer can back out of the contract and get their earnest money back.

Time

Rarely a deal falls apart over time but that is a factor. There is a closing date on a contract and if the house doesn’t close by that date the buyer and seller must agree on an extension of the contract. If they can’t agree then the contract will expire and the earnest money will be returned to the buyer or retained by the seller depending on whose fault the delay was.

Change Of Heart

If you, as the seller, should change your mind and back out of the contract, the buyer will get their earnest money back.

Finally

Earnest money is a crucial component of the real estate transaction. While nobody wants to see a deal fall apart, having something to discourage it from happening is useful.

Selling a house by yourself without the help and expense of a real estate agent is possible and can be profitable. There’s a lot of moving parts to know and take care of. Knowing what to do is how to make it a profitable proposition.

I can show you how to have a successful and profitable home sale.

How To Sell Your House Yourself

by Joel Weihe

Do you know how to sell your house yourself? Have you ever considered it?

for sale by owner real estate sign and beautiful house.

When you think of selling your home what’s the first thing that comes to mind? For most it’s where to find a realtor. How do I find the right Realtor? Many will go to their friends for referrals. Some will google and end up with a service that promises to find them the “best” Realtor.

The truth of the matter is the first thought should be can I do this myself? If you don’t think so then by all means you should hire a Realtor, but think about that commission. It might be worth learning how to do it yourself.

It’s really not that difficult. With some instruction it’s very possible. I’ve taught many new agents the art of listing and selling a home. Brand new agents with no more experience than you have. So why not pay yourself instead of an agent.

Take the money you save and put it down on your next house to lower the mortgage payments. Maybe you can finally afford that vacation you’ve been dreaming about. Or buy a new car. It’s your money. You should keep it.

The Basics

Here’s basically what you need to know to sell your house yourself and save thousands of dollars:

Price your house right!

Many for sale by owners (FSBO) fail and realtors love to point that fact out. The only reason a house doesn’t sell is because of price and everything is relative to price. Homes in the neighborhood may be selling in a certain price range and you think that’s what your’s should sell for. That may be the case but a few things to consider;

Is your home the same size? If the neighbors house is 2400 sq ft and yours is 1900 sq ft the neighbors house will be more.
Is your house in similar or better condition? The condition of a house factors into price.
Does your house need updating? If a home is stuck in the 80’s it will have an effect on price.

You can use the online real estate portals such as Zillow to find comparables when pricing your house.

Realtors that stalk FSBO’s that have been on the market awhile know that the price is to high and they have a strategy. When meeting with the seller they’ll brag about their record, go over marketing plans and convince you they can sell it knowing full well in a couple weeks they’ll be asking you for a price reduction. And you’ll agree. I’ve seen it happen time and again. Now you’re selling the house for what it should have been to begin with but you’re stuck paying those expensive real estate commissions.

Get Your House In Order.

Yes, clean your house. Upside down and inside out. Clean is a big deal when getting your house ready to sell.

Do an inventory of what needs to be repaired, improved upon or replaced. Consider;

Painting inside and out where needed.
Clean windows inside and out.
Insure the roof is in good condition.
Test all electrical, plumbing and appliances. repair or replace as needed.
Declutter by renting a POD or storage unit.
Powerwash the front porch area. Entire house if it needs it.
Mow often and maintain landscaping.
Clean or replace carpeting if needed.

It has been my experience that home buyers are always on the lookout for what’s wrong with a house, looking for negotiating points. If the carpet needs cleaning to a buyer that’s $5000 for new carpet. In reality it may cost $300 to have it cleaned. A dripping faucet means the plumbing needs to be replaced when the faucet just needs a new washer. You get the picture.

Remember, buyers want to move in and start living. They’ll look for a house that will let them do that.

Marketing Your Home

In this day of the internet, marketing your home is really quite simple. That’s the big difference between pre internet real estate and real estate now. Before the internet, and sites like Zillow, the real estate industry held all the information. You needed a real estate agent to market your home. A real estate agent was also needed to research and visit homes.

Not anymore. Now consumers have all that information at their fingertips.

To effectively market your FSBO;

Put a for sale sign in your yard. You want all your neighbors to know there is a house for sale in the area.

2. Advertise your house online everywhere you can. This can mostly be done for free. Sites like Zillow posts FSBO’s. Craigslist is another popular place that home buyers search.

3. Host an open house. It’s best to hold your house open on the weekend. Find out when realtors do it your area. Start advertising in the online real estate portals where you listed at least a full week before the event.

Sell It

So now that you have priced your home right and prepared it for market your ready to start showing. Potential buyers will call you and ask to see it. If you’ve done everything right someone, or several someones, will make an offer.

A full price cash offer with no concessions is the best. If you don’t get that perfect offer right away but a lesser one you can counter offer. This will go on until you come to an agreement and then you put it in writing.

Ask your potential buyer for a pre approval letter from his/her lender. You’ll want to make sure it is a reputable bank or mortgage company. If you have any doubts research the firm and it’s OK to call.

Every state has a different contract and different rules and disclosures. There are also federal disclosures. You can find paperwork for your real estate transaction online. Search for it. Many title companies have contracts you can use. Make sure you do your research and have all the paperwork in order. Make sure everything is included in the contract. Any concessions or contingencies, such as inspections or paid closing costs, must be included.

It may be that you get get a low offer. What we call a lowball. If that happens do not get emotional. Keep your cool and either say no thank you or give a counter. Some buyers will test the water by making a low offer. They may very well be willing to pay what you want but you’ll never know if you you don’t give them a chance.

Closing

Arrange who will be handling the closing ahead of time be it an attorney or a tile company. This can also be a valuable source of information throughout the process. Keep the closing agent in the loop while you’re in contract.

Once you have a contract most of the hard work is done. The buyers lender and the title agent do most of the work from here on. Just be ready to answer any questions or provide any requested documents.

That’s It

It’s not always easy and sometimes there are complications but that happens with or without a real estate agent. The money you’ll save is well worth the effort.