When you plan to sell your home the For Sale By Owner (FSBO) way, you’ll be saving big on sales commissions, but you take on extra responsibilities for getting a successful sale. Homeowners who sell their home through a realtor can rely on the real estate pro to establish the right price to list your home so it will be competitive with other similar properties. However, when you’re an FSBO seller, you’ll be responsible for working out the list price for your home.
Importance of Competitive Pricing for FSBO Homes
Why is it so important to figure out the right price for your home? If your listing price is too low, you could be missing out on getting what your home is really worth when you sell it. You may attract bargain shoppers who will try to get even more concessions from you. On the other hand, if your price is too high, you will have a harder time finding buyers. When this happens, your home might stay on the market much longer than you expected. In the end, you might also have to accept a lower price than you wanted because a home that has sat on the market for a long while will attract bidders who are looking for sellers desperate to make the sale. The best thing you can do to establish the price that will get you the sale you want when you want it, is to do a bit of homework up front.
Check Current Market Conditions
While determining the price for your FSBO home, keep in mind that current market conditions can change rapidly. In the current market, some areas of the country prices are rising, and some homes are selling the same day they’re listed. In some cases, sellers have been able to get much higher prices for their home than what they anticipated due to heavy competition among buyers. In other places, homes are selling less quickly, and sellers need to use all their skills to position their home for a sale that meets their goals. Since market conditions can and do change, when you’re coming up with a price for your home, make sure you check current market conditions first. Read your local real estate news to get the latest information on the state of the market in your area.
Consider the Condition of Your Home
Have you done remodeling or made other changes and updates to your home? Your listing price could be higher if you’ve added value to your home with these kinds of projects, such as updating your kitchen. If you haven’t made any major changes to your home, you should price it a bit lower than similar properties that have updates, especially if it’s an older house that needs work.
Look at Pending Sales
Check recently closed or pending sale prices to help you get a better idea of how much homes in your area are selling for and how long they’ve been on the market. On pending sales, you may not be able to find out the final sales price, but you can tell from the listings how long these homes have been on the market. The longer the home sat on the market, the lower the final price is likely to be.
Scour Active Listings
When you’re trying to figure out your listing price, spend time going through active listings in your area. Do virtual tours of these homes whenever possible to see what kinds of features and amenities they have. Consider the price these homes are listed at and which features and amenities are desirable ones. You should also consider negative aspects of these homes that could affect the price, such as not having a garage or being located on a busy road. You can use these active listings to help you determine your correct FSBO price. Check out how long the home has been on the market and adjust your price so that that won’t happen to you.
Compare Square Footage Costs
How do you know what your home’s appraised value is? If you’re not having an appraisal done, keep in mind that the buyer’s lender will be doing so. To make sure your list price is close to the appraised value, compare square footage costs of homes that are similar in size to yours. When you’re comparing square footage, remember that bigger homes typically have smaller square footage costs, while smaller houses tend to have higher square footage costs. Yard size, a swimming pool or other external features might affect the price per square foot of house.
Get a Comparative Market Analysis (CMA)
A comparative market analysis) can provide you with valuable information on home listings in your area. It provides comparable listings (“comps”) that are similar in location and features to your home. This information can help you figure out how much you should list your FSBO home for on the market. A market analysis is sometimes included with FSBO Flat Fee packages, like these.
Get an Appraisal
While not a requirement, it is ALWAYS a good idea for sellers to get an appraisal done so you know the exact value of your home as measured by a professional . You will kick yourself if you price it too low, and you don’t want to waste time on the market by pricing it too high. Sellers have a hard time keeping their heart out of selling their home and often think it is worth more than it is. A professional appraisal gives you a third party expert opinion on the best price to sell your home. However, appraisals have limitations. For example, appraisers might not always be taking the most recent market conditions into account. An appraisal might be especially helpful if you’ve done a lot of customization and it’s hard to find comparable homes on the market to help you with pricing.
Make Your Listing Price Stand Out
Your listing price should catch the eye of potential buyers in a good way. This might mean pricing your FSBO home slightly lower than comparable homes for sale in your area. This lower price might attract more attention from buyers. Remember, other sellers are paying 3% more than you since they have to pay the seller commission. You can benefit from your FSBO status and attract more buyers by pricing slightly below the competition. When determining your price, you should avoid rounding up. Keeping your listing price on the lower side of a round number rather than bumping it up, even by a small amount, could help you sell your home faster.
Get a Head Start with a Flat Fee MLS Listing Service
Even if you’re doing a FSBO sale, you can still get help from a realtor to correctly price your home. At FSBO VA, we offer flat fee MLS listing services. We offer affordable packages at different service levels, including packages that will give you not only access to the MLS but also the information you need to price your home correctly. And with a flat fee MLS listing package, you’ll still save thousands on realtor commissions. If you’re planning to sell FSBO in Virginia, Maryland or DC, contact Realtor Debbie Kent today for information on FSBO Flat Fee listing packages.