The Ultimate Guide:
How to FSBO in Maryland!
Thinking about selling your own house to save money? Quite a few Maryland homeowners give it a try. A few have success, but most have no success at all.
Did you know For-Sale-By-Owners tend to sell their homes for lower prices than homes sold through traditional real estate agents? These homeowners try to avoid commission costs by trying to sell on their own, but that often backfires and turns into a much lower sales price.
A FSBO sale, on average, nets nearly a 6% lower price than a house listed by a licensed real estate professional for a similar property.
However, if you wish to give it a try, this guide will take you through all the necessary steps to have the best chance of selling your house yourself.
Step 1: RESEARCH
Here are the first things you want to be sure you know before putting your own Maryland house up for sale:
–Prices of recently sold homes that are similar to yours (these are the comparables, or “comps” as they are known).
Compare your home to other similar homes that have sold. If you own a rancher, be sure to compare your home to other ranchers that have sold in the past 3-6 months. The same principal applies to split-levels, condos, colonials, townhouses, cape cods, split-foyers, and other types of houses. Be sure to make adjustments for things such as fireplaces, garage spaces, decks, patios, porches, square footage, seller concessions, finished vs unfinished basement space, and the other factors that were part of these previous sales. All of these items are key to setting the right list price for your home, and selling it quickly.
-Know the average days on market for your area
How long is it taking homes to sell in your area? That number that will tell you how long it is taking to sell homes in your area, on the average. Ideally, you want to sell your home faster than that number.
-Compare the original list prices to the sold prices for your area
What percentage of the original list price are sellers receiving on their homes? That percentage will help you learn how much you can anticipate you might get for your home, provided your home is price correctly. Sell your home faster by selecting the right list price, making necessary repairs, staging, decluttering, updating, and marketing your home in every way possible.
-Know where buyers are coming from, so you can market your house to the right areas
Are buyers primarily moving from within the same area as your house? Or are they moving from other counties or states? It’s important to advertise in the areas where they currently live. You will reach more buyers when you research and market to those areas.
-Know the types of financing your house is eligible for
Does your home qualify for Conventional, FHA, USDA and VA financing? Or perhaps it only qualifies for cash or a 203K loan? Each type of loan has different requirements. It’s important to know if your home meets the standards of these types of financing. If a USDA buyer makes an offer on your house, but your home isn’t eligible for that type of financing, guess what? The sale will fall apart and that buyer will NOT be buying your house. Understanding the different types of loans and the requirements for each are things you should know before you put your Maryland home up for sale.
-Determine what your closing costs will be.
This approximation will help you determine how much profit you can make on your house. Your portion of the transfer taxes is one component of your closing costs that you will want to know in advance. Other components include your payoff (if you have one), seller concessions, HOA and/or condo fees (if you have them), front-foot benefits, taxes, a home warranty, and more.
STEP 2: INSPECT & REPAIR
Today’s buyers typically include inspections in their offer to buy a house in Maryland. A home inspection is common, along with a radon inspection. Other possible types of inspections can include roof, chimney, mold, well, water quality, wood destroying insects, and septic.
Inspecting your home before you FSBO will help you find anything that might need repairing. Perhaps you have a leaking faucet that drips, or a few loose (or missing) shingles. Anything that needs to be fixed will be pointed out when your buyers have their inspections done, so you might as well fix the things you can in advance. It’s also a good idea to make sure your mechanical systems have been serviced.
In Step 1 of this guide, we discussed the need to understand the different types of financing. This advice is especially important when it comes to repairs. Different loan types have different requirements for repairs. Making sure you are familiar with the requirements for conventional loans, USDA loans, FHA loans and VA loans will greatly assist you in knowing what you will be expected to fix and repair. If you don’t meet the requirements, your buyer will not have their loan approved. And if their loan isn’t approved, they will not be buying your home. You will need to put your home back on the market and start over.
After making those repairs, don’t forget to:
Clean from floor to ceiling
Create curb appeal
- Remove any signs of pets
Stage your house
STEP 3: PHOTOS, VIDEO & DISCLOSURES
Today’s buyers search for homes online. As a matter of fact, they start searching way before they are ready to buy. Buyers like to get an idea of what is available at different prices. They quickly learn which homes are priced appropriately and which ones are overpriced. When selling your own house in Maryland, photos can make the difference. As a result of the online searching, exceptional pictures are a must. If buyers doesn’t like your pictures, they will NOT consider looking at your house, they will move on to the next one.
Hi-definition pictures are absolutely necessary. Hire a professional photographer if you aren’t able to take pictures yourself. If you’re able to take your own, make sure the angles are ideal, the lighting is right, and your home is shown in the best way possible. Be sure to remove items attached to your refrigerator, extra items on countertops and floors, personal items and general clutter. There’s a reason why model homes look the way they do. Make your house look like a model home to obtain the best results.
Like photos, video is an integral part of a home buyer’s online shopping experience. Houses that offer fantastic hi-definition photos, in addition to a video tour, receive much more interest from buyers. Buyers want to experience what it feels like to walk through your house. Their online experience determines whether or not they will make an appointment to see your Maryland FSBO. Make sure all of your advertising includes both your pictures and video. Providing a QR code is a great way for buyers to see your photos and video in your marketing materials.
Maryland is known as a “disclosure state”. This means you have a legal obligation to divulge any and all latent defects, as well as material facts, regarding your house. Are you in compliance with the Maryland Smoke Detector Law that went into effect January 1, 2018? If you aren’t, it must be disclosed to potential buyers. Do you knowledge of any leaks, lead paint, mold, or other deficiencies in your house? If you do, they must also be disclosed to potential buyers. Failure to do so can easily result in legal action. Be sure to disclose on the proper forms so you are protected. This is a common mistake Maryland homeowners make when selling For-Sale-By-Owner. Reduce your chances of being sued by preparing those disclosures.
STEP 4: MARKETING
Marketing is what sells your home. Expecting someone to drive by and want to buy your home is unrealistic. Today’s buyers are online, on a variety of websites. Online is where they decide which homes to go see in person. The pictures and videos provided online make a huge impact. That’s where you need to be! When deciding to FSBO in Maryland, you need to provide what buyers are looking for, you need to market in ways that attract the most potential buyers.
Market in the Following Ways to Attract the Most Buyers for Your House:
– List your house on all the major home buying websites
Zillow, Trulia, Realtor.com, and Homes.com. (Be advised, your home will never appear on all the different brokerage websites, such as Coldwell Banker, Long & Foster, Sotheby’s, ReMax and others. In addition, real estate agents will not find your house if it isn’t in the multiple list. Real estate agents often have buyers looking for a particular house, if they don’t see your home in the multiple list, they won’t know about it). There are a slew of other websites that show homes for sale. Decide which of those you want to put your home on and do it.
– Put a “For Sale” sign in your yard
Make sure it’s eye-catching, legible and waterproof.
– Prepare flyers
Highlight your home’s best features, and include some photos. A QR code is also good to add so the buyers can easily reference your house.
– Hold open houses
Plan several on different days at different times so you can accommodate the various schedules of buyers.
– Advertise in print
Even though print advertising is less effective, there are still buyers who look at homes for sale in print, instead of online.
STEP 5: SHOWINGS
Buyers want to physically look at houses. Even though they first look at homes online, they narrow down their choices and then look at their choices in person, As someone who is selling their house “For Sale by Owner in Maryland” you need to be accommodating. Obviously, you have no need for seller representation by a real estate agent. However, be prepared to work with a real estate buyer’s agent.
The majority of today’s buyers are represented by a buyer’s agent. The buyer’s agent is only obligated to assist buyers. When a real estate agent wants to show your property, it is for 2 reasons: the buyers are highly qualified buyers who have been pre-qualified or pre-approved for a loan, AND those same buyers are likely serious buyers who want to buy NOW. In addition, when that buyer wants to write a offer on your property, the agent will make sure all the required Maryland documents are prepared and completed. As a seller, this protects you legally.
How to Accommodate Showings:
- Be available to provide access to your house whenever prospective buyers want to preview your property. Do not hover over the buyers or their agent. Allow them to freely roam. The best advice is to go outside or to a neighbor’s house during the showing.
- Return and phone calls, emails or texts promptly.
- Separate the “lookers” from the qualified buyers.
- Install a lockbox for those times when you can’t personally provide access to buyers.
- Offer a commission to real estate buyer agents. A real estate agent who is representing an interested buyer will prepare an offer on your house as long as you are offering a commission. Not willing to offer a buyer’s agent commission? Then you are missing out on offers. Most buyers have their own personal buyer’s agent for their own legal protection and for expert advice. Why would you want to exclude those real, qualified buyers?
STEP 6: NEGOTIATE
So you have a buyer who submitted an offer on your house, congratulations! The best case scenario is you have multiple buyers who submitted offers on you house. What to do now?
Negotiating offers is an art-form. This is where the research from Step 1 comes into play. Depending on how long it took to receive an offer (or offers) on your house, you need to know the latest data. It could possibly be time to do more research. You need the most up-to-date data.
Factors to consider when negotiating offers on your house:
- Is the offer reasonable?
- Take into consideration the offer price, any seller help requested, the inclusions and exclusions, the types of inspections requested, the closing date, downpayment offered, type of loan, and any other concessions. Will your house meet the criteria for the buyer’s type of loan? Or will you be expected to spend monies you aren’t prepared to spend?
- How will the offer affect your “bottom line”? It’s time to prepare another “net sheet” to see if the offer will work for you financially.
- After your buyer has their inspections completed, are you prepared for the things they want you to fix? Did the radon results come back higher than the recommended limits? If so, you can expect your buyer will insist you install a radon mitigation system. And if you don’t? You will need to disclose elevated radon levels to future buyers. Did the home inspector uncover an issue when he removed the cover of your electrical panel box? If so, you can expect your buyer will want a licensed electrician to fix the problem. No matter what else was uncovered, you can expect your buyer will insist you have a licensed professional fix the problem. Are you prepared to negotiate these (and other) issues by yourself?
You’ve negotiated and agreed to the offer, now what?
After you have reached an agreement with your buyer, are you prepared for what’s next? There’s more to do!
- Make sure you have a legal contract, including the local addendums, financing addendum, inspections addendum, lead-paint addendum and other required Maryland documents. Why is this important? You want to make sure your buyer can’t change their mind, “find a loophole in the contract”, and “walk away”
- Additionally, you want to make sure the contract protects you 100%, to reduce your chances of being sued.
- Make sure the buyer provided an earnest money deposit, and ensure it’s been deposited into a non-interest bearing account.
- Make your home available to any inspectors and the appraiser at their convenience.
- Be prepared to deal with the results of all inspections.
- If your home doesn’t appraise for the agreed upon price, be prepared to re-negotiate. Just because you thought your house is worth a certain price doesn’t guarantee the appraiser will agree. There are times when an appraiser will assign a lesser value. Are you prepared? Do another net sheet to see how it will affect you and if you can afford to sell for a lower price.
- In Maryland, buyers select the title company, and prefer working with a title company as opposed to an attorney. Attorney’s are capable of handling the sales of FSBO homes. In some states, using an attorney is required. In Maryland, buyers want to use a title company. The title company not only prepares all the documentation, but also researches the title to the property. They are the experts in performing this vital element of your home sale. Be prepared to provide the requested documents to your buyer’s selected title company. Documents typically requested include the contract of sale, payoff information, home warranty information, tax record, front foot benefits, public utility info, and anything else the title company requests.
STEP 7: SETTLEMENT
Congratulations! You have successfully navigated the many steps to selling your Maryland home by yourself! Selling your own house is not an easy task. As you have discovered, there are many more steps involved than most people realize. There are ups and downs, easy times and difficult times, happy days and frustrating days.
However, you are almost there!
- First, unless you have a signed agreement to remain in your house for a certain amount of time, you need to move prior to settlement. Be sure to leave behind all the “inclusions” in your contract, and remove all trash & debris.
- Next, make sure you received the “clear to close” from your buyer’s lender.
- Provide access for your buyer’s final walk-through
- If your buyer isn’t pleased with their final walk-through, be prepared to take the necessary actions to comply with their expectations.
- Attend settlement so you can sign your portion of the documents, provide all keys to your buyer, and provide any documents your buyer’s title company requested.
CONGRATS! YOU’VE SOLD YOUR HOUSE BY YOURSELF!
SELLING FSBO: THE BOTTOM LINE…
It makes all the sense in the world to TRY and sell your largest asset on your own.
Actually, research has determined that people who TRY to sell their largest asset on their own do it for one reason – they are TRYING to save money.
The same research all shows that 95% of the people who TRY to represent themselves will TRY it only for a certain period of time.
How long do you plan to TRY before you consider having a full-time professional represent you on behalf of your largest asset?
WHAT YOU GAIN
by working with a real estate professional…
- Frees up your TIME. Selling a house is extremely time-consuming, and you MUST be available morning, noon, and night, every single day! You will spend less time handling calls and showings. Real estate professionals take care of it all so you don’t have to.
- FSBO sellers often have nosy, “look loos” want to see their house. These people often have no intention of buying your house! They can also have intentions of harming you or stealing from you. A real estate professional will not bring these types of buyers to preview your house. Rather, only serious buyers who have been pre-qualified by a lender will be shown your house. This is a MAJOR reason why you should not go it alone.
- Extensive marketing is a MUST to attract every buyer who is looking for a house like yours. A real estate professional has a BETTER MARKETING PLAN than you will have.
- A real estate professional in your corner will get you a BETTER OFFERING PRICE from a buyer. This happens because buyers have a higher perception of YOU as the seller and homeowner when you have professional representation.
- Negotiating an offer and subsequent repairs takes skill, lots of skill. A real estate professional will provide BETTER NEGOTIATING than you trying to work out all the little details yourself. This will also help avoid lowball offers!
Did you know?
- Having a strong internet presence is one of the keys to selling your house for the most money in the shortest amount of time.
- Melissa Spittel can rank your home on the 1st page of Google before your house is even for sale! Just imagine what else she can do to market your home online!
- When a buyer submits a request for more info, Melissa will respond within 15 minutes. No one wants to wait for details, and Melissa will not make buyers wait!
When you are ready to leave all the work and coordination to a full-time professional,
contact Melissa Spittel
for a free, no-obligation consultation!