How to sell your home, FSBO.

If you want to sell your home while saving lots of money you will want to read this.
Recently my wife and I decided we wanted to purchase a smaller home, the kids are nearly gone, and we wanted to move closer to our offices.
We thought our home was worth anywhere from $190,000 to $210,000. We expected to pay the 6 to 7 percent commissions to a real estate agent, which would mean we would have to pay as much as $14,700 in sales commissions. I am sales and marketing director for my company and I deal with contracts everyday so I knew I could handle the paperwork. Any reasonable person could. I felt that $15,000 was a lot to pay to sell our home while we are in a sellers market. I remember an unpleasant feeling 25 years ago of paying that high commission after I introduced the couple who ended up buying my house to my real estate agent. The agent didn’t have to do any work to sell my house and he had the audacity to be late for the closing, which really burnt me up.
My boss recently sold his house without an agent and his story was intriguing.
He had home for sale by owner signs made up by a local sign maker and put a big ad in the newspaper. He had two people in a bidding war after 7 days. He ended up selling for his asking price and only had to pay the buyer’s agent ½ of a percent. He saved $15,000!
His story convinced me that we had to try to sell our home without an agent. We decided to try it for two weeks but first we gave the agents a chance to talk us out of it. This was dual purposed. We needed to set the asking price for our home and we also wanted to choose a realtor to list with if we failed to sell within a reasonable length of time. Realtors have easy access to recent home sales in your area and will furnish you with a list of comparable home sales at no charge.
A friend of my wife recommended a Webster Groves agent, which is in the community we wanted to move to. My wife is an administrator in Webster Groves School district. She came and looked at our home and brought a list of recent sales made within a 2-½ mile radius of our home in Oakville. We had a 4 bedroom 2 story with 2 ½ baths. The home has a finished basement, large back yard with gardens and pool with a large deck. Comparable sales ranged from $179,00 (in our subdivision) to $249,000 in a subdivision of larger homes ½ mile away. As I was calling home appraisers to gather additional info I accidentally found the fellow who did the $179,000 appraisal in our subdivision. He told me the house was run down and had an unusual floor plan. The driveway was severely cracked and needed replacement. I wrote this home off as a troubled sale. Our house was nearly perfect condition.
One recent sale (two months) was for a home that was the twin to ours but without the large yard, finished basement or pool. It had sold for $199,000 (the asking price) within 7 days of the listing date.
It is very important to set a fair price. We decided to ask $204,900, which may have still been slightly low, and we gave ourselves 2 weeks to sell it without hiring an agent. We decided if we didn’t have a contract by then that we would reassess the situation. We shouldn’t have worried because we had the first contract in 8 days.
Here is what we did.
We spoke to a couple who had successfully sold their home without an agent. The term used is For Sale by Owner or FSBO for short. They thought that it was important to list with Multi list Service (MLS) which is an Internet database of homes for sale run by Realtor.com. Getting an MLS listing makes your home easily available to everyone but it costs $500 to a FSBO. If you list with a realtor the listing on MLS is normally included but not always. This seemed like a lot of money.

What I did instead was to purchase a domain name and I built my own web site. See it at www.7013briarbluff.com, which was also, of course, our home address. I put a very large add in the St Louis Post Dispatch. The only other marketing I did to promote the home was to e-mail a link to 5 of the most active real estate agents in the area. I told them that I would agree to pay up to a 3% commission if our asking price was nearly met.
The web site has a hidden hit counter that tells how many people visited the site. There were 24 visitors (hits) the first day the ad was in the paper, which was Friday January 24, and 101 hits by Sunday night January 26. The Post ad and web site both announced our open house on both Saturday and Sunday from 12 till 3 but we only had about 10 couple’s visit. At first I was disappointed but when I look back now I see that only very interested people came to the open house. Our web site gave much more information and was more attractive than an MLS (real estate company Multi Listing Service) site so people had a better chance of seeing if they may like our home. We only got really interested people. That’s a good thing.
Though a few agents shopping for their clients visited us I feel most agents boycotted us. There is a negative group mentality by most agents against FSBO sellers. The negative side of the first visitors was that most of them weren’t ready to buy yet because they hadn’t listed their homes for sale. This was most likely because we were pushing the normal real estate sales season by two weeks.
After the second weekend we had about 5 couples who were very interested. On Monday night February 3 one couple wrote a contract which included a contingency on the sale of their home. ALLRIGHT!!!
Now we could really start shopping for the home that we wanted. We had decided that we preferred to get our home sold first and then find the home we wanted to buy, hopefully coordinating the closing dates so that we wouldn’t have to have a bridge loan. This is where things started happening very fast and in our favor.
We found a home we both loved but the owners wanted out right away and we had accepted a contract with a contingency and a “to be determined” closing date. If we put a solid non-contingent contract on the house we wanted, which is the only contract the sellers were going to consider, that meant we were going to have to get a bridge loan to fill in until our buyers made their sale. Two house payments are a bad thing. Enter Shari, a really good real estate agent!
Her clients had hired her as a buyers agent and she had been driving around and seen our for sale signs. She noted the web site and directed her clients to check out the house on the Internet and then they drove by. They came to our open house on the second weekend and returned on the third weekend. On Monday night February 10 they submitted a non-contingent contract on our home since they didn’t have to sell theirs. We gave notice to remove the contingency to the first couple (72 hours). On Thursday night February 13th we had a firm non-contingent contract on the home we were selling and we were able to submit a non-contingent contract on the home we wanted to buy which was also accepted after some counteroffers. Linda and I went away for a long Valentine / Anniversary weekend with the satisfaction of accomplishing what we had set out to do.
Life is good!


Here are the facts.
We had a very long well written classified ad in the St. Louis Post Dispatch that gave good detail in glowing attention grabbing style but more importantly gave the web address for our web site. The web address was our home address and the listing was placed under our community, Oakville. People were able to take a really good internet tour of our home including summertime photos of the gardens and pool. The web site gave room dimensions and details in the text of the descriptions of the features of the home rather than as a list, which is what the MLS listing does.
If you want to sell something you have to stand out. We did that. But you had to get to the web site. Most people who are shopping for a home are going to look at the classifieds or drive around the neighborhood where they want to live. I had two custom signs made. One in front of the house that announced the web site and phone numbers and a second small one that said open house and our address that I intended to be placed at the entrance to our subdivision only on open house days. Linda surprised me by bringing home another full size sign that she purchased at the hardware store to be left at the entrance of the subdivision on busy Christopher Drive. We make a great team!
When a realtor called, (I wish I had kept track but we probably spoke to 10 to 15 realtors and another 10 sent us stuff in the mail. They tend to circle around FSBO’s waiting to dive in and sign you up if you can’t sell it yourself.) We told them we would pay a buyer's agent 3% of the sale price as long as our asking price was nearly met.
In three weeks we had nearly 400 web site hits and about 25 couples had toured the home.
We had one arrogant realtor tell us that she charged a 5% commission when buying from a FSBO. We told her she could collect her extra money from someone else that we weren’t paying it. We didn’t hear from her again. I tell you this to show you that you are in control of the deal. Don’t be told what to do by a realtor who is only trying to raise their commission. If you do decide to pay an agent you can still negotiate the commission. You may get excuses such as the parent company doesn’t allow that but you don’t have to accept that. There is a little space on the contract that you fill in with a pen that states what the commission will be. It is not cast in stone. You are in control of what you will pay.
We ultimately sold the house because of our efforts and because of a hard working agent doing her job the old fashioned way; by driving around looking for a house for her client. The web site helped smooth the way for the personal tour by the new owners.

We had estimates to sell the house by agents for 6% to 7% and we have heard of higher rates than that. The agent we probably would have used was going to charge 6.5% so we saved $6565.00(3.25% of 202,000) We also sold the home for $2100 more than she had suggested as an asking price. Of course asking prices typically aren’t met so we would probably have ended up accepting even less. In the end I can say that we saved at least $8500.00 minus expenses which were very low. The 15-day Post Dispatch ad cost $130.00 while the web site cost me less than $100 since I built it. The yard signs were $80 so in the end we saved ourselves $8000. Not bad. There were some worrisome times but we would have had those anyway even with an agent. As a matter of fact the most troubling part of the whole process was in dealing with the agent we were dealing with in buying our new home. I felt that the advice she was giving was to serve her or her real estate company and didn’t serve the seller or us well.
On the Monday night that Shari called and told us she was bringing over a firm non-contingent contract, we had just about decided to get on the MLS listing. Thanks again Sheri!
There was one more place we could have advertised that wouldn’t have cost anything. That was in the entrances to local supermarkets. We could have printed an info sheet with tear off phone number and web address. Many people are enamored with the Internet and go to web sites even if they have little interest. Those people talk to their friends who probably know someone who is looking. Any way that you can get more info out helps.
We could have listed on one of the FSBO sites but I dismissed that early on because there are so many of them and they don’t interlink. I believe that anyone who sells because of a FSBO web site are just plain lucky. I mean JUST the web site. Newspaper ads or yard signs do most of the selling but more importantly bring people to the web site. I haven’t seen any yard or news ads that did a good job of bringing you to the web site until I came up with this idea. It all works together.
After the initial two weeks we had a contract so we met our objective. The house wasn’t really sold until a week later when the non-contingent contract came in from a pre-qualified purchaser. Don’t start getting a warm and fuzzy feeling until both your buyer and you have a loan commitment from a lender. If you have good credit and a good history with your current lender and you aren’t spending a higher percentage of your income than you should on a house you will get the loan.
After you have spent a few days brushing up on real estate sales and you think you may want to do what we have done then go for it! I have told you all the important things. If you need help you can hire me. Here is what I can do.
I will register your domain name (www.1234mainstreet.com) and design and build your web site. You will have to furnish me with details about your home along with pictures. I can take the pictures for slightly more if need be. If the house is close I will do it at no charge. I will write the ad copy and get it into the paper. I will build three yard signs. I can help you get the contract, disclosure and other forms you will need. I can recommend a lawyer to look everything over for you. (I don’t offer legal advice) I can show you how to get onto the MLS as a last resort if you want to spend the extra $500.
I will do all this for $495.00.
I am usually available by phone but if you have to leave a message I will answer all phone calls or e-mails within 24 hours and usually much sooner than that.
There are a gazillion loan and title companies out there. I will give you a list of recommended ones. I build or subtract from the list by personal reference, which is the best way. I won’t add a company to the list because they pay me a kickback which is the way most of these companies work.
I will recommend what you should do to your home to prep it for sale.
I will help you spend the money you save. Just kidding. That’s all yours.

In closing I want to say that in order to sell your home you will have to become educated in home sales. You will need to do this whether you hire an agent or do it yourself. Why would you want to hire an agent in this time of extremely low interest rates when it is truly a sellers market?
I suggest that the education that a real estate agent provides you be overpriced.