# Our experience with "For Sale By Owner" (FSBO)



## FarmerKat (Jul 3, 2014)

When we considered selling a house by owner without an agent, I spent a lot of time reading about other sellerâs experiences. Unfortunately, most links online lead to articles, discussion board posts, etc. that say âYou cannot do it yourself, you must have an agent.â I disagree with that assessment. But I will also say that you have to count on putting some time and effort into process outside of taking pictures and uploading them to Zillow and Craigslist.

There will be a lot of phone calls. Grow a thick skin and ask questions. Are you looking to buy now or a few months down the road? Are you preapproved? What type of loan? (Make sure you educate yourself on what type loans/financial institutions will finance your property. A mortgage broker can advise you on this and if you get a call from a buyer who has not looked into financing yet, refer them to the broker who helped you. They might get some business from that.) If you are not satisfied with the answers from the potential buyer, donât show your house to them. Itâs a waste of time.

Be patient and remember that you are working with a much smaller buyer base than a real estate agent. If agentsâ listings are selling in 90 days in your area, FSBO listings will likely take longer. The math is simple â 80 % of real estate transactions are done via MLS. Just like there is only a small segment of sellers who want to go it alone, there are even fewer buyers who want to do it themselves (especially since the perception is that the seller is paying the commission â they will pay it later in their mortgage payment but they donât think about it). The good news is that if you offer buyerâs agentâs commission, some agents will be glad to work with you.

I have read somewhere that getting the offer on the house is 50% of the work and the other 50% is getting it to close. It may or may not be true. My experience with one of our properties is that it is 20% to get the offer, 60% to bring it to closing and 20% to collect the money after closing. Our other property would fall more into 80% to get the offer, 20% to get it to close. Either way, your work does not end when you get the offer â so plan accordingly.

Even though you donât want to pay a commission to an agent, find a lawyer whom you trust and who will have your back. In the end, the lawyer will cost less than an agent. And if you get stuck on something, people usually pay attention when they get a call or email from an attorney on your behalf. 

I thought we were well prepared for our first time selling by owner (we have been involved in multiple real estate transactions in the past and have purchased several times without an agent). But there were some unexpected turns and lessons learned that we might have avoided had we had a real estate agent. I donât think avoiding these âlessonâ would have been worth 6% of the house value but it might be to some. 

Here are the things we were not prepared for:
1)	Be really, really picky about who you accept an offer from. Weak buyer will cause you more headaches than you need and should be avoided. For example: 

​a.	A buyer pre-approved for a loan with zero money down is a weak buyer

​b.	A buyer who cannot produce a small earnest money deposit right away is a weak buyer

​(I donât know that a real estate agent would turn a weak buyer down either. Some seem to get excited to get an offer in as much as the seller is.)

2)	Do not accept an earnest money deposit unless it is a personal check drawn on the buyerâs account (I imagine real estate agents know this.)

3)	Consider paying buyerâs agentâs commission â Inexperienced buyer will need a lot of help to get through the process and there is a very fine line between protecting your own interest as a seller and guiding the buyer. (We made the choice to offer a buyerâs agentâs commission after a few weeks on the market simply based on the type of calls or showings we had. Some people need a real estate agent. But it was not something we planned from the start.)

4)	If someone has to come back to re-inspect the property for repairs, get a copy of the report â do not take the inspectorâs, lenderâs, buyerâs or anyone elseâs word for it. (I took a loan officerâs word for it and it came back to bite us. I assume that a real estate agent would automatically ask for a written report.)

I am hoping that these pointers help someone out there in the cyberspace. Happy selling (by owner). :nanner:


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## mreynolds (Jan 1, 2015)

FarmerKat said:


> When we considered selling a house by owner without an agent, I spent a lot of time reading about other sellerâs experiences. Unfortunately, most links online lead to articles, discussion board posts, etc. that say âYou cannot do it yourself, you must have an agent.â I disagree with that assessment. But I will also say that you have to count on putting some time and effort into process outside of taking pictures and uploading them to Zillow and Craigslist.
> 
> There will be a lot of phone calls. Grow a thick skin and ask questions. Are you looking to buy now or a few months down the road? Are you preapproved? What type of loan? (Make sure you educate yourself on what type loans/financial institutions will finance your property. A mortgage broker can advise you on this and if you get a call from a buyer who has not looked into financing yet, refer them to the broker who helped you. They might get some business from that.) If you are not satisfied with the answers from the potential buyer, donât show your house to them. Itâs a waste of time.
> 
> ...


Great post and spot on. Another site to list would be to google biggerpockets. It is free and a RE investor site only. You will still get many phone calls but most will be serious buyers. Very professional site.


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## Maura (Jun 6, 2004)

Good advice. When we sold our home in town, I had a sign maker make me a &#8220;For Sale by Owner&#8221; sign with the phone number. I used a medium blue background with white lettering as that would stand out well in our shaded yard. I also got a plastic tube from the hardware store to put on top of the sign. Into this I had sheets with a photo of the house from the road, address, etc., and the pertinent info, like a real estate agent would have. People looking for a house often drive around the neighborhoods they are interested in.

When we sold the house we had my sister, who is a lawyer, do the deed work. Just call lawyer&#8217;s offices and ask what he or she charges. Another option, if the buyer is getting a loan, is to have the bank handle it.

If you are putting the house on a website, make sure you have good photos. I&#8217;ve looked at some that have two inside pictures and six outside pics. No more than two pics per room and get the best angles. Give the square footage of the living area and separate of the basement unless it is normal in your area to put the two together.


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## FarmerKat (Jul 3, 2014)

Maura said:


> Good advice. When we sold our home in town, I had a sign maker make me a âFor Sale by Ownerâ sign with the phone number. I used a medium blue background with white lettering as that would stand out well in our shaded yard. I also got a plastic tube from the hardware store to put on top of the sign. Into this I had sheets with a photo of the house from the road, address, etc., and the pertinent info, like a real estate agent would have. People looking for a house often drive around the neighborhoods they are interested in.
> 
> When we sold the house we had my sister, who is a lawyer, do the deed work. Just call lawyerâs offices and ask what he or she charges. Another option, if the buyer is getting a loan, is to have the bank handle it.
> 
> If you are putting the house on a website, make sure you have good photos. Iâve looked at some that have two inside pictures and six outside pics. No more than two pics per room and get the best angles. Give the square footage of the living area and separate of the basement unless it is normal in your area to put the two together.


Maura, good points  

Just remember that if the buyer is getting a loan, the lender will do what is best for their client, not the for the seller.


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## TnAndy (Sep 15, 2005)

I've sold four pieces of property over the last decade, 3 of my rentals, and one 27ac piece of land. 

One rental I listed with a real estate agent....it was a bad experience, the lying, the misrepresentation, mistakes, etc....reminded me yet again why I hate real estate agents (used to build and sell spec homes years ago, and hating using them then too).

The other two rentals I sold myself....one to a tenant already in the house for several years, the other by word of mouth.

The vacant land I sold twice....first time to a 'wanna be' homesteader where I carried the note and he left after 4 years, the next time to a full price cash buyer. Both cases, used Zillow and got a LOT of potential buyers....especially the second time....had the buyer that bought it, and a backup offer.

Personally, I'm a big fan of Zillow, and it must be putting a real hurt on real estate agents.....which is good thing IMHO, because most of them aren't worth shooting.


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## Michael W. Smith (Jun 2, 2002)

After my Dad passed away - we had his house to get cleaned up and sold. (By "cleaned up", I mean - the contents of the house had to be sorted, boxed, and gotten ready for an estate auction. Also his previous wife had died several years before - and let's just say Dad didn't clean.)

Dad passed away in November - so an estate auction was planned in the Spring. (This also gave us a deadline to get everything sorted, boxed, etc.) My step-sister and I - who were the executors - decided we would sell the house ourselves.

First point was to get an appraisal. We hired a lady in the area who was supposed to be "the best". The house wasn't cleaned before she came to appraise it - we were still working on it - but most things had been sorted and boxed and stacked. 

We were absolutely shocked when the appraisal came back of $35,000.00. This was a 3 bedroom house with 3 acres and a very large newly built garage. There is no doubt the house needed work - the lady seemed to think the only value was the garage and the land - the house was worthless. 

We put up a "For Sale by Owner" sign in the front yard with my and step-sister's cell phone numbers shortly before the estate auction. (We also took pictures and printed out the information and put up the information and pictures on bulletin boards in the area. Several people called - but we weren't showing it until after the estate auction. Once the auction was held, and we quickly cleaned up the house - we started showing it. 

This place was certainly a "fixer upper" - there were several places where drywall had been removed due to a chimney fire many years ago (like I said, Dad didn't clean - or fix) and the house needed new carpet, repainted on the inside etc.

Many people looking - just seemed to be nosey. Some were looking for potential of turning it into an apartment rental, some were looking but didn't want a fixer-upper etc. Luckily, one couple came forward that he was a handy man. He could see the potential - that many couldn't (or wouldn't).

A deal was made. (By the way, we ignored the appraisal lady's number and started at $70,000.00 - a number we came up with by comparing this house to others in the area.) The couple did need a loan - and of course, there were all kinds of hoops - an inspection - which required some repairs. The couple were motivated to buy - so they agreed to make the necessary repairs with us buying the materials.

A lawyer was hired to assist with the property transfer - and it was done. (We sold the house for $67,000.00.)

All in all - we had it sold within 2 months of posting the sign. These people just happened to be driving by - on their way to work - and saw the "For Sale" sign. It just takes the right person.


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## Bellyman (Jul 6, 2013)

TnAndy said:


> I've sold four pieces of property over the last decade, 3 of my rentals, and one 27ac piece of land.
> 
> One rental I listed with a real estate agent....it was a bad experience, the lying, the misrepresentation, mistakes, etc....reminded me yet again why I hate real estate agents (used to build and sell spec homes years ago, and hating using them then too).
> 
> ...



My wife works for a mortgage broker and real estate agents come in quite a few flavors. In the area we're most familiar with, there are a handful of really good ones, there are a whole bunch that kinda "play" at being a real estate agent, some that are just down right incompetent, and a few we can't figure out how they stay out of jail. (Seriously, one of them not long ago listed a property that the person listing didn't even own, and of course, my wife, while doing preparatory paperwork is seeing the names not matching and finding out that the real owner doesn't want to sell... AARRGGHH!!! Cute little house, we even considered looking at it ourselves. Glad we didn't get mixed up in it.) 

I can definitely understand how it would be difficult to go to a new area and figure out who the really good agents were and not wind up with an incompetent or worse.


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## TedH71 (Jan 19, 2003)

Zillow isn't good in our area because it over inflates the house prices or posts houses that sold fast or were never for sale. 

As for me, I got myself pre-approved prior to going to look at houses for sale so I would know how much house I could afford to buy. Don't assume pre-approved people aren't able of buying or are weak buyers. Completely bull.


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## FarmerKat (Jul 3, 2014)

TedH71 said:


> Zillow isn't good in our area because it over inflates the house prices or posts houses that sold fast or were never for sale.
> 
> As for me, I got myself pre-approved prior to going to look at houses for sale so I would know how much house I could afford to buy. Don't assume pre-approved people aren't able of buying or are weak buyers. Completely bull.


I disagree. Someone who is pre-approved for a zero down mortgage and is trying to purchase a house with entirely no money down is a risky (weak) buyer. If the lender tells the buyer the day before closing that they have to bring a certain amount of money to closing (for example, to pay some of the closing costs) and they don't have it, the deal can go south very quickly. A buyer who is pre-approved for a loan that requires some level of financial commitment from the buyer (be it closing costs or down payment) is much more likely to close. A buyer like that has to prove to the bank ahead of time that they are capable of bringing the funds to closing. 

As for the "zestimate" on Zillow, it's a useless value. We had our house listed at $149K (it appraised in that range as well) but the "zestimate" would change from $90K to $170K in 24 hours - many times while we had it listed. We live in a rural area and our market is definitely not that volatile. Interestingly, since the election, the "zestimate" has been in $200K-$230K range. I doubt that number has anything to do with reality. I have seen similar swings in the "zestimate" of our second house.


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## TedH71 (Jan 19, 2003)

Forgot to mention that in my case, we had to wait until our 2 bedroom sold before we could go and combine the money we got from that sale with our pre-approved amount that we could buy with. My wife got her first house through a first time house owner program that had zero down and that program was guaranteed by the town where she lived. It also helped that she had been working for the city for several years at the time. We casually looked for houses for several months due to the fact that the house market was not good the year we put our house up for sale which I'm glad because I didn't really want to buy a house in the Wichita, Kansas, city limits. We ended up buying a repo in which the former buyer had gotten it through a seizure. Turns out the previous owner before the person who we bought the house from had been a hoarder. Crazy stuff. Our house was very undervalued at $124k when it should've sold for a lot more but the previous owner had gotten it for $90k and turned out they tried to flip it for several thousand dollars more but when they tried to sell the house to us, turns out the evicted hoarder had gotten truly angry and put a lien on the house and he had to have us be temporary renters until he could track down the hoarder and bribe her with $10k in order to have her sign the lien papers saying he owed her nothing. That woman made it out of the deal like a bandit. Basically he lost $10k on the house deal so he sold it for a very little profit. He had done a horrible job trying to fix the house up. We've been spending thousands on getting the house up to standard then we kept having earthquakes to the point that the front porch cracked and sunk into the ground 1 and half inches deep and it resulted in the water pipe leading to our house being thrust 1 foot DEEP into the dirt and made a major leak in the house that took two weeks to repair. When we figured out how the leak occurred, we contacted the foundation repair people and looks like we have to pay $14k in order to jack up the front part of the house. When that's done, we plan to replace the front windows in the living room and the upper bedroom and bathrooms and remodel all the 2.5 bathrooms then add flooring to the stairs and upper hall way and we are going to put it up for sale! We've been told once we finish all of that, the house value should go up to probably $175k or higher since our house is the only house that has 2 upper floors and a basement on 1/4th of an acre in the neighborhood.


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## big rockpile (Feb 24, 2003)

As a Buyer there is things having the property inspected won't show. like last place we had. The Seller sold all the Top Soil and buried junk all over the property. Who would think of selling all the Top Soil off a property?

But the House needed Rewiring and a New Well Pump put in.

big rockpile


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## FarmerKat (Jul 3, 2014)

Now that both sales are complete, I feel comfortable sharing what really happened. It is a long blog post outlining the journey from getting an offer to fighting to collect the funds after closing. If anyone is interested in reading, here is the link: http://fsbolessons.blogspot.com/

Please don't be discouraged to go the FSBO route. I think what happened with our house is more of an exception than the norm. If the two properties we were selling did not share a driveway, the second sale would have been perfectly smooth - offer, appraisal, termite inspection, closing, payment.


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## Bellyman (Jul 6, 2013)

Wow, Kat! What a story! 

Hope the next adventure is a little less tense.  

Happy New Year!


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## FarmerKat (Jul 3, 2014)

Bellyman said:


> Wow, Kat! What a story!
> 
> Hope the next adventure is a little less tense.
> 
> Happy New Year!


Happy New Year to you and your family! Now that we don't own a house, we are also in an RV. It was quite nice downsizing into a camper. We decided to winter in Florida. We will be back to Tennessee when we can start the construction of our campground and a new house.


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## Bellyman (Jul 6, 2013)

FarmerKat said:


> Happy New Year to you and your family! Now that we don't own a house, we are also in an RV. It was quite nice downsizing into a camper. We decided to winter in Florida. We will be back to Tennessee when we can start the construction of our campground and a new house.


Cool!  

What part of TN are you thinking? 

Not sure what you have in mind for a campground but there might be a "retirement" built into something like that if you can make it happen. Some friends of ours had a campground in TN and they did well when they sold out a year or so ago. And the new owner is doing even better with it from what I can tell. It's one of the nicest parks in the area and they seem to do very well at keeping things rented out. Check it out if you want... http://springlakervtn.com/ It's not a bad place to hang out for a while. Very friendly and laid back atmosphere. (I don't get anything for saying it, just sharing from personal experience.)


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## FarmerKat (Jul 3, 2014)

Bellyman said:


> Cool!
> 
> What part of TN are you thinking?
> 
> Not sure what you have in mind for a campground but there might be a "retirement" built into something like that if you can make it happen. Some friends of ours had a campground in TN and they did well when they sold out a year or so ago. And the new owner is doing even better with it from what I can tell. It's one of the nicest parks in the area and they seem to do very well at keeping things rented out. Check it out if you want... http://springlakervtn.com/ It's not a bad place to hang out for a while. Very friendly and laid back atmosphere. (I don't get anything for saying it, just sharing from personal experience.)


We already have the land here in NE corner (Roan Mountain area). Our goal is to have a small business that will sustain us income-wise and place to build a home. It is not a huge property (11 acres) but it has a long riverfront on a beautiful trout stream, little bit of space for little nature walks and some cool natural features. We will have 17 RV spaces at first. The long term goal is to build 3-4 cabins up on the ridge with some nice views. We will also have some secluded tent spaces for folks who don't quite want to rough it but want the feel of being away in the woods. We homeschool our kids so we want to be able to both be at home and both be part of the education. Our vision is the campground to be a natural place themed around local history. 

Our own cabin will be on the far end of the property away from the campground. We won't have a whole lot of place, but I will have space for pigs, chickens and garden.

We have developed things as far as we could for now but we were waiting to sell the two houses to complete everything (we don't want to take on any debt). But, of course, January and February are not good months for construction. Beyond the cold, the ground is mucky and harder to work. 

Thank you for the link to your friends' campground. I am going to look at it now


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## TnAndy (Sep 15, 2005)

Read the blog, Kat.....THAT was a real experience, huh ? Glad it worked out in the end.

Last piece we sold (adjoining us), folks paid full price, wrote a check at closing which consisted of 1/2 hour at our attorney's office, simply closing statement, sign a deed to them and off to the bank to deposit the check.

But I got some almost equal horror stories from the days when I used to spec build.


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## FarmerKat (Jul 3, 2014)

TnAndy said:


> Read the blog, Kat.....THAT was a real experience, huh ? Glad it worked out in the end.
> 
> Last piece we sold (adjoining us), folks paid full price, wrote a check at closing which consisted of 1/2 hour at our attorney's office, simply closing statement, sign a deed to them and off to the bank to deposit the check.
> 
> But I got some almost equal horror stories from the days when I used to spec build.


Yes, it was quite an experience. LOL ... I will admit I was not laughing at the time. Would you believe I still have not been able to get a closing statement from the title company that matches the actual amount they sent us? They produced two different ones. One was totally off and the other was "close enough".


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## Raeven (Oct 11, 2011)

*FarmerKat*, your posts in this thread have been wonderfully informative and useful to anyone who is thinking of FSBO, and I want to thank you for taking the time. My own experiences with FSBO have been very positive and I agree with what you have shared.

I think the trick is to know your limitations, meaning know when to get help, and to handle the parts you are confident you can but leave the bits you can't to the professionals. I wholeheartedly agree with asking for significant earnest money, being picky about a buyer and pre-approved only.

Very excellent thread! Good job.


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## FarmerKat (Jul 3, 2014)

Raeven said:


> *FarmerKat*, your posts in this thread have been wonderfully informative and useful to anyone who is thinking of FSBO, and I want to thank you for taking the time. My own experiences with FSBO have been very positive and I agree with what you have shared.
> 
> I think the trick is to know your limitations, meaning know when to get help, and to handle the parts you are confident you can but leave the bits you can't to the professionals. I wholeheartedly agree with asking for significant earnest money, being picky about a buyer and pre-approved only.
> 
> Very excellent thread! Good job.


You are welcome and thank you for your kind words. 

I think it takes a certain personality to do FSBO. I have good friends who tried FSBO but later chose to hire an agent. Their agent got a contract on their home after about the same time on the market as our houses. They were scheduled to close a few days ago but it got postponed. When I asked my friend what caused the delay, she said she had no idea. And she was okay with that and felt comfortable letting her agent handle that. It would drive me nuts not to know all of the details. If we hired an agent, I would probably drive them crazy because I am not the type to just sit back and patiently wait.


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## DaynaJ (Dec 5, 2007)

I bought the house/property I'm in now. Was a quick, no problems buy/sell by owner. Now I'm getting ready to do a sell by owner on it, makes me nervous. I need to do some more homework. The only thing we did as a buyer was go into the title company & sign the paperwork. I just realized I have no idea what the sellers did to get us to that point. I'll go ask them, good thing they moved just down the road. Great post ya'll. Thanks for taking the time to help us newbies!!


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