One of the problems you may encounter when selling your home without an agent is not being able to find a buyer. This can cause all kinds of problems, like having to make house payments … which is even worse if the house is empty. Another problem if the home is not selling is that you may not be able to move into the home you wanted until the current one is sold.
Of all the reasons a home might not sell when you sell it yourself, there are two that make up the majority of the issues that will keep you from finding a buyer.
1. The price
If your home price is too high relative to market ranges, you will find yourself in a limited supply of buyers who will pay above the market rate. This is even more important in a regular slow market. Sometimes during really hot bubble markets it is possible to get a higher price from the “buying frenzy”, but generally those periods are distant and few. Most of the time you will be in a normal to slow market where you will need to be competitive to attract buyers in that economy.
Now if you don’t know how to price your property to sell quickly, here’s an easy way to find out. Go to online real estate sites like Realtor.com or Zillow.com and find 3-5 houses in your neighborhood that sold in the last 6 months. For each sale, take the sale price (not the list price) and divide by the square foot to get the price per square foot. Take the price number from 3 to 5 per square foot and add them up, then divide by the number of properties you used to get the average price per square foot. Then take this average number and multiply it to your square footage and get a round price. Take this price and multiply it by 0.98 and this will give you a fairly accurate price on the sale price of your home. Now if you have some major improvements or additions, or if your home is not similar to the ones in your neighborhood, you will have to adjust to this. Otherwise, this simple formula will get you closer to the price you need for a quick sale.
The second most important aspect of selling your home by owner is aggressive marketing. Now if you listed an agent and they were on top of their game, you wouldn’t have to worry about that. However, if you are handling the sale on your own, then you will need to disclose your property information … and in a compelling way. That is, you need to focus on the benefits of why buyers would be better off buying your home rather than all the other properties on the market. Most people just post an ad in their local newspaper classifieds (which doesn’t get the attention they used to) or just put a few photos and a description on Craigslist and hope their phone rings smoothly. The reality, however, is much different.
Of all the ways you can market your home, including listing online at different housing sites, nothing beats signs. Pound for pound, signs will give you the most exposure from qualified buyers. The key is to get it right. This means ugly hand-drawn signs posted at busy intersections using the right words for shoppers to pick up the phone and call you. Also, having a handwritten sign, preferably in bright colors, in your front yard will give you a good volume of interest from eager shoppers.
There is another factor, although not very well known, that can cause your home to sell quickly at full market price … even higher at times. And that’s selling-with-lease (also known as rent-to-own). This is simply giving a qualified tenant / buyer 12-24 months to qualify for a mortgage. As you know, mortgage standards have become extremely difficult these days. And a lot of good people, who have the income and are qualified, just got approved yet. Just provide a lease term to get your financing so they can pay it off in cash when your loan is processed. Selling rent to own like this is good too as you get the full net market price as you don’t pay any commission or fee when they collect it.