The amount of real estate for sale is staggering and competition is fierce. Market reports estimate that approximately one-third of property listings consist of properties which are in foreclosure or repossessed by banks. In order to liquidate foreclosed homes, banks reduce purchase prices to entice quick sales.
Homeowners listing real estate for sale through realtors often find it difficult to reduce their asking price because they must pay commissions. If a buyer uses a different realtor than the listing agent, homeowners are often required to pay commissions to both agents in order to close the deal. This can add several thousand dollars to their closing costs and substantially reduce overall profit.
In addition to realtor commissions, sellers also compete with a multitude of discounted foreclosure properties. While most bank owned properties require repairs or renovations, buyers can often purchase distressed properties for 20- to 30-percent less than a home in perfect condition.
Buyers oftentimes become star-struck with lowball prices and fail to calculate the true cost of buying foreclosure homes in need of substantial repair. Once they review multiple low-cost homes they develop a mindset that all houses should be priced equally and will bypass houses in excellent, move-in ready properties.
One option which can allow property owners to reduce the asking price of their home is to list the property as for sale by owner. Since the homeowner acts as the realtor there is no need to pay agent commissions which can amount to as much as 8-percent of the purchase price.
Engaging in for sale by owner real estate transactions is no easy feat. Sellers must take time to become educated about the process and become familiar with real estate laws and property transfers. At minimum, sellers should enlist the services of a real estate lawyer to draft contracts and ensure property transfers are filed through appropriate government agencies.
Sellers can obtain most of the information they need to list real estate for sale on their own via the Internet. Libraries can also be a good source of information. Most office supply stores sell preformatted sales contracts, promissory notes, and FSBO kits which include purchase agreements and signs which can be placed in front of the home.
Property owners should considering joining online real estate clubs or participating in local networking groups. Many private investors provide webinars to teach sellers the basics of selling property on their own. Some realtors provide educational seminars or offer discounted services to facilitate certain aspects of the sale.
Participating in networking groups gives sellers the opportunity to meet professionals that can assist them through the process of selling realty. Members often consist of realtors, mortgage brokers, realtors, property appraisers, and home inspectors.
The Internet is also a good source for locating FSBO websites which allow sellers to upload photos and information regarding their property. Sellers offering investment properties may qualify for 1031 exchanges which allow them to exchange their property for like-kind realty.
Selling houses in today’s real estate market requires sellers to prepare their home to make it more appealing than other homes for sale in the area. Sellers should make all necessary repairs, paint, replace outdated appliances, worn carpet or flooring, and thoroughly clean the house from top to bottom.
The home’s exterior should be in pristine condition and offer ‘curb appeal’. The exterior is the first thing prospective buyers see, so sellers should strive to make it as inviting as possible. It is crucial to remove debris, clear weeds, trim bushes and trees, and make certain exterior lighting is adequate. Power wash the exterior or add a new coat of paint; wash windows; remove rusty awnings, and repair broken gutters, mailboxes, or anything that detracts from the appearance.
For sale by owner real estate places everything in the seller’s hands. If necessary hire professionals to help with time-consuming tasks such as painting, landscaping, or cleaning. If the tasks become overwhelming, seller’s always have the option of hiring a realtor to list real estate for sale.