Sell Your House Without a REALTOR® in Maryland
Step 1: Do the Research
When selling your house “For Sale by Owner” in Maryland, there are things you need to know before you put it up for sale. It’s important to do your research first.
What Things Should You Research?
1. Recently Sold Homes
First, research the of recently sold homes that are similar to yours. These are the comparables, or “comps”, as they are known. Many Maryland homeowners believe the tax assessment for their property is the same as the value of their house, and they use that assessment as a guide to pricing their home. In reality, that assessment has nothing to do with what a house can sell for. The assessment is based on a mathematical equation.
Many homeowners in Maryland rely on automated valuations provided by Zillow and other resources. These valuations, while nearly accurate at times, are typically either too high or too low and are therefore inaccurate and misleading.
What is the best and most reliable way to determine a home’s true value? Compare your home to other similar houses that have sold. Be sure to make adjustments for things such as fireplaces, garage spaces, decks, patios, porches, square footage, seller concessions, basement space and 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.
2. Days on Market
Know the average days on market for your area. How long is it taking homes to sell in your area? Ideally, you want to sell your home faster than that number.
3. List to Sold Prices
Compare the original list prices to the sold homes 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 priced correctly. Sell your home faster by selecting the right list price.
4. Where Buyers are Coming From
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 even 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.
5. Types of Available Financing
Know the types of financing your house is eligible for. There are a variety of loan programs that consumers use to buy a house in Maryland. Not only must buyers meet the requirements to buy a house, (for example, minimum income and credit scores) but houses must meet the requirements for each type of loan, too.
Many homes in Maryland qualify for conventional financing, but does your house meet the criteria for FHA, USDA or VA financing? These 3 types of loans have the strictest criteria that a house must meet. Is your house even located in an area that is eligible for USDA financing? Location matters for that type of loan. Will a buyer be forced to use a 203K loan because the other types of loans won’t be approved for your house? When this is the case, you need that buyer who can either pay in cash or who is willing to take the extra steps and expense to obtain a renovation loan.
Each type of loan has different requirements. It’s important to know if your house meets the standards of these different types of financing. If a 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 house up for sale.
6. Your Closing Costs
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 may 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: Pre-Inspect Your House
Today’s buyers typically include inspections in their offer to buy a house in Maryland. The most common types of inspections include:
- Home Inspection
- Radon Inspection
- Roof Inspection (if there are roof concerns)
- Chimney Inspection (when there’s a chimney)
- Well Inspection (when a house is served by well water)
- Septic Inspection (when a house is on a septic system)
- Water-Quality Sampling & Testing (when a house is on well water)
- Wood-Destroying Insects (for example, termites)
- Mold Inspection (when there is a concern of mold in a house)
Inspecting your house before you FSBO will help you find anything that might need repairing. Perhaps you found 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 fix in advance. It’s also a good idea to make sure your mechanical systems have been serviced.
Knowing the different types of financing for your house is also important when it comes to repairs. Why? Because different types of loans have different requirements for repairs.
Make sure you are familiar with the requirements for conventional, USDA, FHA and VA loans. Knowing the differences will help you know what you will be expected to fix and repair. If you don’t meet the requirements, your buyers will NOT have their loan approved. And if their loan isn’t approved, they will NOT be buying your house. You will need to put your home back on the market and start over.
Some homeowners opt to hire a home inspector before they put their house up for sale. That way, they have a professional’s advice and know what repairs to make in advance. While most home owners believe they know if there are any issues, sometimes they end up being quite surprised to learn the inspection results. There might be a leak somewhere they weren’t aware of. There might be something faulty they can’t see.
Even if you don’t hire a home inspector, plan to repair the things that need repairing in advance.
After you’ve made those repairs, don’t forget to:
- De-clutter your house
- De-personalize your house
- Organize the contents of your hosue
- 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 don’t like your pictures, they will not consider looking at your house. They will move on to the next one. High-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
- Your house is shown in the best way possible
Be sure to remove items attached to your refrigerator, extra items on counter tops 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 high-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 “For Sale by Owner” home. 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 material.
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 have 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 Your House
Marketing is what sells your home. Expecting someone to drive by and want to buy your house 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.
Zillow is the most frequently searched home buying website. However, there are other websites that some buyers prefer to search instead. A few of those sites / apps include: 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.
“For Sale” signs are a traditional way to advertise your house is for sale. Put one in your yard and if your local laws allow it, put one at the entrance to your neighborhood or the end of your street. Make sure it’s eye-catching, legible and waterproof.
Prepare flyers that 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.
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 will need to be accommodating. Obviously, you have no seller representation by a real estate agent, you have chosen to sell your house by yourself. So, you’ll need to manage each and every request from anyone who wants to see your home.
The majority of today’s buyers are represented by a buyer’s agent. The buyer’s agent only assists their buyers. When a real estate agent wants to show your property, it is for 2 reasons:
- The buyers are highly qualified buyers who have already been pre-qualified or pre-approved by a lender
- Those same buyers and likely serious buyers who want to buy NOW
However, be prepared to cooperate with and pay a commission to a real estate buyer’s agent.
How to Accommodate Showings
- Be available to provide access to your house whenever prospective buyers want to view your property
- Don’t hover over the buyers or their agent
- Allow them to freely roam
- Leave your property. Go outside, for a ride, or to a neighbor’s house during the showing
- Return any 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 buyers who have already been qualified for a mortgage loan?
Step 6: Negotiating Offers
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 so you have 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 home inspection and any other 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’re Under Contract, What’s Next?
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”
- 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, and subsequent negotiating of repairs.
- 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 typically choose 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:
- Contract of sale,
- Payoff information
- Home warranty information
- Tax record
- Front foot benefits,
- Public utility info,
- HOA information (when there is an HOA or condo association)
- 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!
- Unless you have a signed agreement to remain in your house for a certain amount of time, you’ll need to move prior to settlement. Be sure to leave behind all the “inclusions” in your contract, and remove all trash & debris.
- 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. If you’re unable to attend, make arrangements to sign your closing documents in advance.
While your house is for sale, there are 2 critical things to do EVERY week, consistently, so you have the best chance of selling your house on your own.
1. Advertise Consistently
Your want as many people as possible to know your house is for sale. If buyers don’t know your house is for sale, they won’t make an appointment to look at it. And that means you won’t be able to sell it! So, be sure to advertise as many places as possible, to reach the greatest numbers of buyers.
Best Ways to Advertise Every Week:
- Keep the yard sign out and visible
- Keep flyers distributed in local businesses
- Set up weekly paid ads on Facebook
- Make sure your house can be found, every day, on Zillow, Realtor.com, Homes.com, and as many other websites as possible. Most buyers look for houses online, and different buyers look at different websites. Keep in mind, your house will never be found on real estate brokerage websites.
- Post about your house on Instagram, IGTV, and Twitter.
- Be sure you don’t violate any of the fair housing laws in your advertising! Why? Because fair housing violations can easily result in lawsuits.
2. Monitor the Market in Your Area
The real estate market constantly changes, so it’s very important to keep track, every week, of certain key items. Research and ask yourself these questions every week:
- How many new listings are there? The other houses for sale are your competition
- How does the price of your house compare to the others for sale?
- How many houses went under contract?
- Of the houses that went under contract, how did they compare to yours?
- If no houses went under contract, is it because buyers think they are all priced too high?
- Did any houses for sale lower their price? If so should you consider lowering your price, too?
- Did any houses close? If they did, what did they sell for?
- Have the recent sold prices affected what your will appraise for?
Real estate changes from day to day, week to week, and month to month. When selling your own house, staying aware of your local market data will give give you best chances of competing with the other homes for sale in your area. You want a buyer to pick your house instead of one of the others for sale.
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’re 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. WHY? Because they realize the process is extremely overwhelming and they need help.
Don’t Get Sued!
It’s easy to get sued when selling your own home.
Download the FREE Checklist of Things to Do to Reduce YOUR Chances of Getting Sued!
Get the FREE Guide to “Selling Your Own Home Without a REALTOR®”
Learn How Do-It-Yourself Step-By-Step
About the Author:
Melissa Spittel is a local real estate expert who serves Carroll County and the surrounding areas in Maryland. Her knowledge, skills and experience are invaluable when it comes to buying or selling a house. Her experience working with out-of-state buyers and sellers makes her a great relocation REALTOR®, and she is part of Coldwell Banker’s Relocation Team. Do you need a real estate expert in another part of Maryland? Or even in another state? Melissa can easily connect you with a REALTOR® from her wide network of real estate pros.
Have Your Questions Answered by the Melissa, the Local Real Estate Pro!
Ask Melissa Here: