Thursday, February 9, 2012

For Sale by Owner: How to Sell Your Own House Part I

We did it, friends. Matt and I sold our house by ourselves without listing it with an agent, which saved us approximately $7,500.

I have to confess that I wasn't sure we were going to be able to pull it off. Our house was on the market for 3.5 months. At the three-month mark, we started connecting with a realtor. We came very close to signing with them. In fact, their forms were in my e-mail inbox; I just didn't have time to deal with them because I was scurrying to meet my book deadline. And then we received an offer.

Selling a house is hard, hard work, but it's hard whether you work with a realtor or not. The hardest parts of selling our house included:
  • Getting our house ready to go on the market (purging, decluttering, organizing, and cleaning)
  • Keeping our house in show-ready condition constantly (daily vacuuming, clearing off the bathroom sink, putting away Henry's changing table, etc.)

And we would have had to do those things even if we went with a realtor.

If you're on the cusp of wondering whether or not you should try to sell your home yourself, this series is for you. I'm going to do a couple posts about how to sell your own home (including things I wish we would have done but didn't). An important point to remember is that trying to sell your house yourself does not mean that you can't later list it with an agent. The only things you have to lose are the money you spend making signs, the small commission you pay to list your house on the MLS, and the extra time it might take.

Step One: Get Your House Ready to Go on the Market

Oh, boy. The pretty much joyless process of selling your house begins. Whether you list your house with an agent or not, you still need to get your house ready to go on the market, which entails the following:

  • Make a list of everything you want to fix before listing your house. You don't need to fix everything that's wrong (just be prepared to disclose the things that are wrong), but you should repair obvious things.
  • Once you make your list, reorder everything from most important to least important, since you might not be able to get to everything. Then start working on the projects or calling folks to get quotes. For us, we needed to fix things like a broken outlet on our front porch.
  • Go through every room and purge, purge, purge. I can't emphasize this enough. Even though Matt and I try to purge pretty regularly and keep an ongoing "Donations" box to collect stuff, we still had to get rid of a lot of unused junk.
  • Once you've pared down your stuff to things you actually use and need, then it's time to declutter and reorganize. For us, this looked like stripping down nearly every surface of our home to the bare minimum. In the bathroom, for example, we put away our toothbrushes, soap, and other personal belongings every single day, so that the counter looked clear, clean, and beautiful. In the kitchen, we stopped storing our cutting board on the counter. We moved a basket of Hoss's toys from the dining room to the attic (sorry, Hoss!). We stopped storing Henry's carseat in the house (which we had to do all summer long to keep it cool). In other words, we tried to make our home look like a model home, even though all six of us were still living in it day in and day out (Matt, me, Henry, bloodhound, plus two chickens in the backyard).
  • Go through your home and try to depersonalize it as much as possible. Apparently, it's hard for people to envision themselves in other people's homes if the owners leave out too much of themselves. To combat this problem, we replaced all of our framed photos with pictures cut out of magazines. We also stopped hanging things like bathrobes on a hook in our bedroom.
  • Make more space in your home by taking things out. You honestly might have to store large pieces of furniture elsewhere. The goal is to make your house feel as light, airy, and spacious as possible.
  • Once your home is purged, decluttered, organized, and de-personalized, it's time to clean it like your life depends on it. We did things like scrub the baseboard edge with a toothbrush (and by "we" I mean "Matt").
  • Focus on the curb appeal of your home, since it matters tremendously. We hired professional landscapers to spruce up our front yard. We also hired someone to pressure-wash our house and repaint the front of it.
  • Once you think your home is as beautiful as possible, ask an honest friend or neighbor to walk through and give you additional suggestions for how to make it even less cluttered and more organized and beautiful.

Once you have prepared your home as much as possible, I suggest that you meet with a realtor. When we met with a realtor, we honestly didn't know whether we were going to sign with her or sell it on our own. Here are the questions we asked:

  • How is the market doing right now in this neighborhood? Is it improving or worsening?
  • How many comparable listings are there? What does our competition look like?
  • What would be the best time to put our house on the market?
  • What changes would you recommend we make in order to help our house show as well as possible?
  • What do you think are the best features of our house?
  • What do you think would hold someone back from purchasing our home?
  • At what price would you recommend we list our house?
  • What percentage do you charge?
  • We're thinking about trying to sell our house ourselves at first. What are the benefits and drawbacks to selling it ourselves?

We only met with one realtor, but I would recommend meeting with at least three. That way, you get diverse perspectives and as much information as possible. Also, even if you decide to sell your house yourself, I don't think it's sneaky or dishonest to meet with realtors during the information-gathering stage. Just because you try to sell your house yourself doesn't mean that you won't ultimately sign with a realtor. You'll need to have these meetings anyway, so you might as well do it early in the process.

The three parts of selling a home are price, condition, and location. You absolutely have to get the price right. If you set your price too high, you will struggle to get showings. At the same time, there will likely be negotiation involved (both with the initial offer and then once the inspection report comes back), so try to set the price above your bottom line if possible.

At the end of the day, the market determines the price of your home. Nothing else. It doesn't matter how much you love your home or how beautiful it is to you. The only thing that matters is what someone else is willing to pay for it. The folks over at Young House Love described their process, which included setting the price too high initially.

Many realtors will do a free analysis of the comps in your area to recommend a listing price. If you talk to three different realtors, you should get a good sense of what price to start with. I also recommend that you scour the MLS website for your area and spend a Sunday going to open houses in the neighborhood. Open houses will help you get a sense of what's available in your area, will give you ideas about how to host your own open house, and will help you set a fair and reasonable price tag for your house.

After you meet with the realtors, spend some time implementing any suggestions they have for staging your home even better. For example, the realtor we met with recommended that we replace the plastic panes on our front door with glass and repaint the whole door.

This first part is really time-consuming and difficult (and potentially expensive) if you do it right. However, investing upfront will pay off later down the line. During this stage, I recommend that you learn as much as possible about how to sell your own home. I read For Sale by Owner, as well as House Selling for Dummies. Also, I connected with someone in my neighborhood who had sold her own home (way more informative than the books!) and attended a free seminar hosted by For Sale by Owner (also very helpful, although this book looks even better).

It's true that it takes extra legwork to sell it yourself, but for a stay-at-home mom, the legwork was worth $7,500.

Stay tuned for Part II next week!

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Heather said...

This is incredibly helpful as my husband and I hope to sell our home this Summer/Fall and we've been going back and forth between trying to do it ourselves or just having a realtor do it. My stomach always sinks when I think of the commission fees and whatnot, though.

Sara E. Cotner said...

Hi, Heather! I just added a thought to my post, based on your comment. If you have time to sell your house, you really don't have much to lose aside from the little bit of money you put into making signs and the small commission you pay to get your house listed on the MLS. You could try to sell your house by yourselves first, and if that doesn't work out, you can list it with an agent.

Best of luck with whatever you decide!

Cecile said...

Dear Sara,

I hope you're feeling better about Austin :)That use of the "trapped" world has be haunting me (kind of). But I am pretty confident that you'll find someone suitable to take care of Henry ! :) (whereever you are)

Sara E. Cotner said...

Hi, Cecile! Thank you for thinking about me! I am feeling much better. The three babysitters are working out really well. I'm able to attend trainings, schedule meetings, etc. With their help, I'm able to achieve a much better balance of the personal and the professional.

Cecile said...

That's good to know :)

I enjoy reading your adventures. You seem to have so much strenght to make your dreams come true... ! That is very inspirational to me :)

That forces me to have a different point of view on... everything. That pushes to think : "what would I do if everything was possible ?"

I wish you the best for this new step in your life :)

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