Many people think that the only way to sell a house is by hiring a real estate agent. But that’s not true. There are many ways you can sell a house, including selling directly to a cash buyer. But even if you plan to sell on the open market, you don’t have to hire a representative. You can sell the house yourself in what’s called For Sale By Owner (FSBO). Of course, there are pros and cons to doing this and the specific state and city you do this will have their own rules. It’s important to have all the information so you can make the most informed decision for yourself so here’s what to know when selling a house by owner in Memphis.
Why Sell Your House Yourself?
The most obvious reason to sell a house yourself is to avoid paying any real estate commission fees. All markets are different but, on average, you’re going to pay five-to-six percent of the sale price to your real estate agent. If you sell a house for $300,000, you’ll have to pay a commission of around $18,000. That’s a big chunk of money.
Perhaps it doesn’t seem like a big deal given since you just sold for $300,000, but remember the commission comes out of your home equity. So imagine you still have a $200,000 mortgage to pay off. That leaves you with $100,000, minus the $18,000 for the agent, leaving you $82,000. That’s still a decent chunk of change but the difference between $82,000 and $100,000 is pretty sizable, right? We also haven’t gotten into any extra closing costs, liens, or costs of doing business.
Another reason you might want to consider selling a house yourself is if you have to sell quickly. Perhaps you need to relocate or change your location quickly. Time spent hiring an agent and going through their process is time wasted for what you need. Not to mention you might have to deal with financial issues such as foreclosure or a tax lien. Or you might not want to deal with repairs or structural issues inside the house.
This is where you can decide to sell the house yourself on the open market or you can sell directly to a real estate investment company that will make you a fair cash offer and buy the house as-is from you. No need to get real estate agents involved.
However, if you do decide to sell your house on the open market, there are some critical steps you need to take.
Determine the Value of Your House
By deciding to sell your house by yourself, you’re committing to wearing many hats throughout this process. You’re the owner, the agent, the marketer, and possibly the repairperson. So the fewer issues you can create for yourself, the fewer headaches you’ll get. It’s absolutely critical that you price the house right from the beginning.
If you price the home too low, you won’t make as much money as you could have. If you price it too high, buyers will stay away and you’ll be paying for a house on the market for a long time.
You have a couple of options for how to figure out the right price. The easiest way is to do some detective work, scouring real estate websites like Zillow, Redfin, and Trulia. Look for homes like yours in your neighborhood. You won’t find an exact match but their sale prices will give you a good sense of the current market value. Remember to account for differing features, sizes, and amenities.
You can also hire a licensed appraiser to give you an accurate estimate of your property’s value. An appraiser’s report is helpful when it’s time to negotiate. It will likely cost between $300 and $500, however. And keep in mind that the mortgage company won’t accept it since you ordered the appraisal yourself, so you’ll need to get a second one from them when it comes time to sell. It’s also important to remember that the appraisal value is different than market value, which fluctuates more broadly.
Get Your Home Ready to Sell
What kind of condition is your house in? What are the potential flaws and problem areas that buyers will notice? If you showed up to take a look at the house, what you make you think twice about making an offer? You need to be able to answer all of these questions and then make important decisions about what to do about it. The more work you do early, the less you’ll have to worry about making concessions or paying for repairs later.
If nothing else, you’ll want to make any and all minor repairs that you can. Fix every leaky faucet, sticky window, and cracked tile. You may have to suck it up and deal with a faulty dishwasher or garage door opener that doesn’t always work, but that’s better than giving buyers a reason to consider buying someplace else because they are annoyed by what they’ll have to do. You might also want to consider this a good time to repaint, declutter, and clean.
Don’t forget to consider curb appeal as well. That means power-wash the exterior, do some landscaping, mow the lawn, paint fences, and do anything else that will make drivers want to stop and take a closer look.
Market Your Home
That said, you can’t just count on the curb appeal to sell your house. A real estate agent would normally handle this kind of thing, but you’re going to have to handle all of the marketing yourself.
This means investing in yard signs and knowing where to place them, designed and creating brochures to be handed out, advertising the house online on popular real estate sites, and hosting open houses. All of these things require planning, preparation, money, and time. And the more you need to do, the more it’s going to cost you.
Negotiation & Closing
Let’s say you get a few potential buyers interested in your house. That’s great, but now it’s time to negotiate. A real estate agent would normally handle these things but this is now up to you. The buyer will probably come in asking for a lower price than your asking price, so it’s going to be a give-and-take to find the spot where both parties feel comfortable. You also have to be able to walk away if the buyer isn’t willing to meet your minimum goals. If you’re not comfortable with the negotiation process, this is where many pitfalls can happen.
Once you’ve negotiated a price, it’s time to go under contract. The contract will spell out all of the details and specifics included in the deal. That means making sure it includes the purchase price, contingencies, buyer and seller concessions, the closing date, and the location of the closing. There are specific laws and rules you need to abide by when selling a house in Memphis. Tennessee also has specific closing cost requirements, so make sure you understand all of those.
You Can Always Sell Quick for Cash
If all of that sounds like a lot and you don’t want to deal with all of the costs and time involved, consider selling your house as-is to a real estate investment company. You won’t need to make any repairs. You won’t need to pay for any marketing. You won’t have to deal with real estate commissions or make any concessions. You and the investor, like Fair Cash Deal, agree on a price and closing date, they pay you in cash, and you can move on to your next house.
