Are You Selling Your House Privately? It Can Be Easy If You Do It Right
Tags: sell your house privately, how to sell your house privately in Ontario, fsbo Ontario, steps to selling a house privately
If you want to sell your house privately or as many industry professionals say FSBO (for sale by owner) you’re probably wondering what to do. Even if you’ve decided to use one of the Sell it Yourself brokerages such as Purplebricks, you may be looking to get some advice on how to exponentially increase your chances of selling. Now full disclosure, I, as you know, am a professional realtor but what my promise to you is that I will not once try to change your mind about trying to sell your house privately. Every piece of advice is solely to help you sell as quickly as possible. There are many other blog posts I’ve written that may change your mind but this is not it.
GETTING STARTED WITH BUYERS
Your decision was probably made because in some respect you’ve told yourself it’s not difficult to sell a house. You’re not wrong. If the market conditions are correct it's not overly difficult to sell your house privately. It may be very time consuming with having to learn how all of the pieces move and at times very stressfull but it does not need to be difficult. If the market is moving fast enough and inventory is snapped up fairly quick after it becomes available for sale you should be able to sell your house without too much trouble..
However, for most FSBOs especially if they’re using a FSBO brokerage that helps with some marketing, finding buyers is typically the biggest challenge, not to mention, most buyers have representation. That means they are working with a realtor to buy a home. This is the issue that many people who’ve decided to sell privately have,
“It’s only costing me $999 to sell and get on MLS, I don’t need an agent”. That is true but since most buyers are represented, since it affords them much more protection, you’re probably going to have to deal with an agent regardless. This also means, for better or worse, paying them to bring their buyers to you. It is not mandatory that you pay a “co-operating commission” but it will definitely help. In and around Hamilton/Burlington/Niagara and Brant, which is the area I service, the typical commission paid to a “Buyers Agent” by a seller is 2/2.5% of the selling price. This is something you will need to decide if you’re willing to do or not before your home hits the market. But when you have competition from other homes being sold that are paying, you may find it extremely beneficial to bite the bullet and pay.
You’ve decided to pay a commission in order to get as many buyers through as you can or maybe you haven’t and have decided to go it alone. Either way the next piece of the puzzle is knowing the process. Finding a buyer is only the first step, and there is a lot that can go wrong between contract acceptance and closing. Unfortunately, even though we see it all through rose coloured glasses not everyone is ready to sell their house privately, but as I said, if the market is right, the job is significantly easier. If the market is on a heavy upswing commonly an issue that arises is that you could possibly have sold your property for more. This is where some up to the minute market knowledge is beneficial.
More often than not we never think our homes are worth less than they are, we typically think they’re able to sell for significantly more than what the market will allow. The real issues you could encounter are the headaches and possible legal ramifications with the negotiations once you sit down at the table. This depends greatly on the type of person you’re negotiating with and their level of education with the process. The contracts you're working with are legal documents and if they slip something past you, you could be on the hook legally. A lawyer or someone with expertise should always go over your contracts before you sign them. Don’t get bullied into an “irrevocable offer” that forces you to sign in distress. If the market is extremely strong you shouldn’t need to worry about this too much as there should be other buyers available, in case this one walks away. It’s better not to sell than get cheated. Good food for thought however, is that time is not on your side as the longer your home sits, likely the lower the offers (if any) become.
With that being said if the market isn’t hot enough, you might not be as successful selling your house privately. There are many reports on this but the National Association of Realtors out of the US is a major entity that reports that an unfortunate majority of FSBOs end up selling for less money or they end up listing with a Realtor, losing the up front costs associated with selling your home without one. Part is because they’ve tried to save as much money as possible (not a bad idea in many cases) and not being willing to pay the co-operating commission, when the vast majority of buyers are represented. The other reasons are because owners who sell by themselves often lack the knowledge or expertise to price their home correctly. Believing that their home is worth way more than its true market value or that they can start at a higher price and negotiate down. This is a huge but very common mistake made by both FSBOs and realtors alike. The other common issue is that trying to sell your privately falls short on marketing knowledge and having the appropriate negotiation skills.
SO WHAT DO WE DO TO SELL
Price your home properly to start. Pricing a home to sell quickly and for top dollar is part intuition, part research, and part market timing. As long as you keep your advertised price within the comparable sales you should more often than not receive offers within a short period of time. To find this out it would be nice to ask an agent but unfortunately you can't always depend on their recommended selling price. The sad fact is many realtors focus only on representing your listing and could steer you wrong so that you don’t sell, hoping then that you may ask them to list your home. Other times they really aren’t aware of the actual value, because it requires a bit of work to truly determine an accurate assessment so they just shoot from the hip. In other words, it's probably up to you to figure this all out on your own.
On a side note....If you'd like to use our instant home evaluation calculator you can find it in the menu above. It will instantly give you an idea of what you'd be looking at and you don't need to sign up for anything to get it.
Instead look at what comparable properties are currently listed for in your neighbourhood and figure out how long they’ve been for sale. If you see a home that's similar to yours go up for sale and then have a Sold sign on it within a few days or week, there's a strong chance it was priced correctly. Be certain you don't to fall victim to what many seller's have as one of their biggest mistakes, which is pricing your home too high. The first two weeks or so that your home is on the market are crucial. That's when buyers' interest levels are the highest. It's better to price your home aggressively and gauge the buyers reactions then to price too high and have zero data to compare. Remember you don’t have to sell if the interest is so high that it’s obvious you could get more.
PREPARING YOUR HOME FOR SALE
Thank you HGTV, because gone are the days of selling a home that is mediocre, especially if you want to sell your house privately. It needs to wow, either positively where potential buyers want to move their belongings in now or negatively where the home needs enough work that only flippers or buyers who want a project know they can snap it up for a steal of a deal. The second option means no work for you to prepare your home but you'll have to be willing to take cents on the dollar. If however, your home doesn’t actually fall into the latter you need to put your work pants on. Start by seeing it from a potential buyers standpoint, every negative piece could throw off a sale. You need to get your home ready for the dance.
You’re going to have to spend some time and money preparing for market. One caveat is just be sure you don’t spend too much where you’re losing money on the transaction. It’s a very fine line between not enough, just perfect and too much.
Some of the highest returns come from cleaning, painting, updating outdated pieces, staging, decluttering and making necessary repairs. Click the "get your home ready" link above for more in-depth tips.
GETTING IT TO THE MASSES
Making sure you market your home properly and aggressively is crucial. If you flub on this you may still sell but it's a guarantee you've left thousands, possibly tens of thousands of dollars on the table because of your mistakes. More eyes, means more people through, means more potential offers which means more money for you, it's as simple as that. Plus, with all of the money you’re saving by not paying a listing agent it’s time to spend it wisely. It’s better to copy a pro than go it alone. What really great agents tend to do is put a big portion of their potential commission, yes potential, because you pay them nothing if they don’t sell your house, and hard work into marketing your home correctly. The variable with that statement is that every property is different and could require varying tactics. Some homes cry out for video and/or drone photography, especially if they're situated on the waterfront, in the mountains, near a park, or on acreage. Additional media in the form of neighbourhood video or aerial views from a drone could be a huge advantage over other properties. Possibly using virtual photo enhancements work well, as it could get potential buyers to stop and take notice because the picture is so intriguing. A picture is worth a thousand words as they say. Photo editing and enhancements have come so far it’s mind boggling.
Photography- Most home buyers begin a home search online, so having professional and edited photos is essential. Listings without photos or ones that have been taken with your phone (without proper lighting and editing) are often ignored or discounted as being worthy of a live visit.
If you do take your own photos make sure when you’re taking exterior shots you take them at the brightest time of day. Also, make sure you don’t have vehicles in the driveway plus crop out sidewalks and streets. Make the house the focal point. Shoot both close up and angled photos and avoid shadows.
Photos need to showcase the positives of your home. Take pictures of your yard if it’s well landscaped or large as an example. But if you say live in a condo or townhouse take pictures of the common areas. Again showcase the positives. You should emphasize space and shoot long. Don’t go overboard where it’s not recognizable but make it look slightly more than it is with the naked eye. Also, make sure the lawn is freshly cut and the bushes are in order. Prepare your home before you take picture.
For your interior shots be sure you let in as much natural light as you can. Open the drapes and blinds but also turn on the lights. Again showcase the positives like the condition of a wood fireplace mantle. Take items like trash cans and kids toys out of the shot and similarly be sure you’re not in the shot……yup, that’s you in the mirror. Be sure you close the toilet lids in the bathrooms. You can use fruit bowls or floral arrangements in the kitchens and dining room. Put place settings on your dining table, don’t just leave it plain. Take pictures of every room, go overboard with this. You take as many as you can then choose the best ones that you want to use.
Virtual Reality- You bet that’s where we are now. Buyers when shopping online want VR. By not having it you limit your exposure to potential buyers. This can come in the form of Virtual Tours, Video or even Virtual Reality. I’ve taken on a number of occasions my clients from around Ontario, BC, Nova Scotia and New Brunswick who were moving into the Golden Horseshoe (the area of Ontario that I service) on a home shopping adventure from the comfort of their own home, virtually. That’s right, headsets on, we’re shopping for a home. Now for the agents and folks that wanted to sell their house privately who didn’t have the VR, they were automatically removed from the list of possibilities. Besides video which you should still get professionally done you will almost definitely need help with this. There are applications that can help but typically they leave something to be desired. I always get my photos, videos, drone footage, and Virtual Reality done by my team of professionals.
Print Advertising- Print advertising is a component that many overlook. Direct mail such as just listed postcards can be sent throughout your neighbourhood, Flyers that can be put in your sign box (if you have one), Feature Sheets etcetera all need to be taken into account.
Social Media and Online Advertising- Facebook, Google, Youtube, Instagram, LinkedIn or a website for your specific home just to name a few. This is where your advertising dollars get you a ridiculous bang for your dollars spent, but it does require expertise to do it properly. If you're not using this platform, you're definitely losing money and if you're not using it correctly it can cost you even more. With social media you can specifically target and reach thousands and thousands of people who have put their hand up saying they have an interest in something related to what you’re offering. Someone who has mentioned they could be moving to “X” city for example would see your advertisement. This is not for the faint of heart, as I have years of experience with it but what you’re able to do is reach a much more targeted audience for pennies on the dollar. It is better than almost any other media source. You can also advertise through Google on a pay per click campaign, where someone types in “Homes for sale in x city” and your ad appears for them. The biggest advantage to this, is your ability to retarget and target "look alikes". This is where you use Facebook and Google's algorithm and tracking capabilities to specifically target people that have interacted with your ad, with your ad in a certain way or with your ad/video for a specific amount of time. You are then able to take that information and target people that "look alike" with the same patterns as the people who interacted with your ads in a certain way. This is where the true online marketing magic happens and you can get your home in front of hundreds of thousands of very targeted potential buyers. There is something also known as organic reach, which is free. As long as you use the right words and deliver the right content both Google and YouTube (for video) will deliver it to browsers and therefore a very targeted (they raised their hand saying that they want this) audience. The Shares, Likes, Comments, Clicks, Targeting and Re-Targeting are going to be your best friend if you are willing to use them and use them properly.
Electronic Mail- As with all web based advertising it’s fairly easy and inexpensive for you if you want to sell your house privately to create and send out electronic direct mail and flyers. You can include multiple photographs from the ones you’ve taken. Send them to real estate agents who sell in your area and to friends, family, and coworkers. Out-of-area brokers and agents who represent buyers in your area can be great recipients as well.
Web Presence- Even if you're not represented by an agent, you can still be put on the MLS. Many brokerages will enter the information about your home for you. These are pretty well available from anywhere and most will do it for a flat fee. Posting your home here will make sure that agents and buyers alike are able to find your home if they're searching on those platforms.
If you're thinking about selling your home I am more than happy to be of any assistance I can, whether you want to use an agent or as I've gone through in this post, sell your house privately. Do you want some help with your online ads, setting up Facebook or just a chat about pricing, I'm just a quick text, call or e-mail away and I'm happy to help.