Selling Your Home Alone: the Vermont FSBO Option

FSBO stands for For Sale By Owner and Vermont has a large number of FSBO homes and real estate for sale. The most usual reason Vermont home owners try to make a For Sale By Owner transaction is to avoid paying an agent commission.  But don't expect that selling your home yourself is going to be cheap. Advertising, appraisals, and lawyers are all going to cost you money up front. Scheduling showings, meeting with buyers, making follow-up calls, and keeping on top of advertising is all going to take time.  It won't cost you anything to interview agents before deciding to sell on your own. If you choose to go the FSBO route, consider these points:

Don't sit back and wait for buyers to knock on your door. In a hot market it may only take a sign in your yard and an ad in the paper to get a FSBO house sold, but this is the exception not the rule. Real estate agents know that good selling is active; you'll need to search out interested buyers and let them know your home is on the market. Remember that selling your home is going to take time, effort, and money so plan accordingly. 

Determine your home's worth. Normally the appraisal is paid for by the buyer after an offer has been made on a property. Yes it will cost you extra, but I recommend that you hire a Vermont licensed appraiser to help set the FSBO sale price. Without a trained opinion, you may set your price too high or too low. The obvious result of a property that priced too high is few or no offers. There's also a less obvious concern. Even if you do get an offer, lenders are not going to lend more money than the home is worth. Thus, you may find a buyer, but you may not find a buyer who can find a lender. Unfortunately, you might not learn that the lender's underwriter has rejected the loan application until shortly before the closing date.  If you don't want to pay for an appraisal, many real estate agents offer free market analyses and can provide an estimate of your home’s worth.  Also remember that For Sale By Owners are less successful in the luxury market. This is for two reasons: buyers looking for luxury homes are less inclined to do the searching themselves, and many Vermont luxury homes are sold to out-of-town buyers looking to relocate.

Hire a Vermont licensed real estate attorney before you market the property and have your lawyer draft up a sales contract in case you get an offer. A big difference between selling on your own and using an agent is that by selling on your own, you'll incur more up-front costs that are normally paid by the Vermont real estate agent or the home buyer; in this case, spending the money upfront on a lawyer is a good idea.

Determine how quickly you would like to sell and set your price accordingly. Yes, your appraisal will tell you your home's worth, but it can't tell you how long you'll have to wait before you get buyer willing to pay this amount. Unless you have a strong knowledge of the local real estate market, you may not know the average time a property like yours is on the market before it gets an offer and gets sold. Houses in one price range may move slowly in your area while homes in another price range may move quickly. If don't have knowledge of the local market conditions, you'll have to guess a bit here, but if you want to sell quickly, reduce your asking price.

Take plenty of pictures and post them on a web site along with information about the house. Include information about local schools and neighborhood attractions. Post your property on craigslist.com and googlebase.com. VT Home Tours and Vermont For Sale By Owner also offer reasonably priced FSBO services.

Be very wary about the hidden costs of using services like Picket Fence Preview. You might find that they over-charge for yard signs, charge buyers for the privilege of viewing your property online, and design their web site to make it hard for buyers to search for your home. Think carefully about letting Picket Fence Preview know when your property is under contract. If you need to re-list it, they'll charge you full price a second time simply to change the status. I recommend not telling Picket Fence Preview if your property goes under contract because deals often fall through when neither the buyer nor seller are represented by a professional. I warned you.

Clean your home thoroughly, including changing air conditioner and heating system filters, beneath the refrigerator, and around your washer and dryer. Take extra time to carefully clean the bathroom and keep it free of clutter by storing all bath, cosmetic, and hygiene products out of sight. Remove the cobwebs from the utility room and reinstall that smoke detector outside of the kitchen.

Open up windows and doors every day to clear out musty and stale air. Keep window curtains and shades open. Have lights on when showing your house. Vacuum and mop. Ask buyers to remove their shoes when they enter. We often don't recognize our own home's sights and smells that an outsider may, so it is a good to have a friend give you an honest second opinion.

If you plan to take any fixtures with you when you move--like that antique chandelier--remove and replace them before you begin showing the house. You'd be surprised how many contracts on homes worth several hundred thousand dollars fall apart over items worth only several hundred dollars.

While you're out looking for buyers, consider working with a Vermont licensed real estate agent if they have a buyer-broker agreement with an interested buyer. Because they’re not spending their own time, effort, and money marketing your property, agents might be willing to work with you at a reduced commission. Often I hear resistance to this idea, but keep your goals in mind. You’re trying to sell your house and the buyer wants to buy a house; a good real estate agent will make sure you both meet your goals. Remember, over 80% of FSBO homes get sold by agents anyway.

Locate any documentation for the furnace, water heater, and appliances and make them available to buyers. Have records of utility costs and tax bills on hand. If you can show that your house is in order, buyers will have a greater assurance that they're making the right decision.

Make sure to make time to meet with buyers, even if it disrupts your routine schedule some. I’m surprised at how many FSBOs don’t try to accommodate buyers. It may mean coming home at lunch time, but if buyers can’t get in to see your home, they’ll end up buying someone else’s.

The biggest challenge in selling your home yourself is balancing the price and the exposure. I've heard Vermont FSBOs proudly claim that with nothing but a yard sign they sold their homes on the first day it was for sale. While I congratulate them, I wonder how much more they could have sold it for with more exposure and more time on the market.  Avoid pricing your home too high, but don't low-ball yourself either.

As you're considering selling yourself, make sure you're really committed to the time and money it will cost. Most FSBOs who first try to sell on their own end up using a real estate agent anyway according to the 2005 study done by the National Association of Realtors. (Did you ever wonder why some For Sale By Owner homes are "Under Contract" on Picket Fence Preview while others are "Under Deposit"?)

If you decide that you should use a real estate agent. Interview several agents before deciding on one. See my article on interviewing Vermont real estate agents.