When determining what kind of an asking price to attach to a fsbo home, there are several points to consider. Because you have omitted a third party – a real estate agent – asking price can be more flexible. Still, you need to be sure the price you set on your home is reasonable and fair – for both you and the buyer.
Get an Appraisal
Obtain a house appraisal from a qualified appraiser. One recognized by lending companies and banks. Interestingly enough, banks and mortgage companies do not lend money to homebuyers based on the value attached to the property by a real estate agent. That is because they do not consider real estate agents valid appraisers. And for good reason.
Most of the time, a real estate agent’s comparative market analysis does not represent the true market value of a home. Therefore, protect yourself by getting an appraisal done by a professional appraiser, one that will give an accurate, unbiased appraisal of your home.
An appraiser calculates a property’s worth using a direct sales comparison approach – based on the actual selling, not asking price, of comparable properties in your neighborhood.
Even a homeowner can obtain a relatively accurate appraisal of their property. By doing a little research, making use of an online house appraisal service, and by gathering data from the interactive Home Price Information Services available in many major cities.
Set a Reasonable Asking Price
Without having to consider a real estate agent’s percentage of the selling price, as a “for sale by owner” homeowner you have more leeway when deciding on an asking price. However, make sure the price you attach to your home is reasonable.
While you can set the price a little higher than the house appraisal if location or other aspects of the property are especially desirable, it is in your best interest to be conservative when attaching an asking price on your home for sale by owner.
Most buyers will make a fair offer on a reasonably priced fsbo home they like, but will avoid making any offer if the asking price is set too high.
Buyers are usually advised by a buyer broker or lawyer to bid below or at the appraised value. Even so, unless the market is slow in your area, setting your asking price at 3 to 4% over the appraised value of your home will not deter most serious buyers.
Selling the Buyer on Your Asking Price
After setting a fair price on your home based upon the house appraisal, sell the buyer on your asking price. There are advantages to buying a for sale by owner house.
First, the selling process is less complicated for both the seller and the buyer. Finding a buyer is often faster, too. A large percent of FSBO homes that sell were originally listed with a real estate agent, before the homeowner became frustrated and took matters into their own hands.
In most cases, the asking price of a home for sale by owner can be dropped by 6 to 7% from what the real estate agent had it listed for, and still put more money in the homeowner’s pocket while saving the buyer big bucks!
Enhance Your Chances of Making a Quick Sale
To increase chances of making a quick sale, advertise wisely. Advertising online using a resource such as Virtual Real Estate Listings at www.vrel.org can save you hundreds, even thousands, of dollars in newspaper advertisements and other forms of advertising.
For a reasonable, one-time fee, a full page ad complete with color pictures is made available to interested parties around the clock, 7 days a week. And placing an inexpensive one or two line notice that includes the online ad’s URL in area newspapers will prove one of the most cost-effective ways to advertise your fsbo home.