Military FSBO Guide

Back To Home Page

Real estate agents can charge 6% or more to sell your home. Because military members relocate so often paying a full commission can eliminate any profits built up. We will explain to you how to sell your home For Sale By Owner.


1. Why Sell "For Sale by Owner"

The question is, Why not? Most people are intimidated at the thought of selling their home with out an agent. That's because, they think their on their own and they don't know where to start. Then what about all that paper work, and do I need a lawyer? Selling your home isn't such a daunting task, especially if you have some help.

There are several reasons you may be thinking about selling your home For Sale by Owner. We will discuss the most obvious. Everyone knows military families live on tight budgets, often living pay check to paycheck, so the idea of selling your home with out agent fee's is certainly worth looking into. Lets look at how much you could save. If you sold a house for $150,000 and paid an agent 6% commission that is $9000. That is just the agent commission, this does not cover the many other fee's (discussed later) that must be paid by the buyer and seller. What could you do with an extra $9000? By selling your home FSBO, you can save on agent fee's

2. How to get started

What is Military FSBO Assistance? The answer to selling your home For Sale by Owner! It's a special program designed to take the fear and unknown out of selling homes and putting homeowners at ease. It's bout selling your home with the guidance and assistance of an agent. Found exclusively at Off-BaseHousing.com, owners can register, find licensed agents in their area that are willing to guide them through the process and complete the Sales Agreement along with all other documents, and the seller only pays 1% commission.

Why would agents do this?

3. Military FSBO Assistance

If you have decided what you would spend all that extra cash on, then it’s time to get started. I will walk you through the steps to selling your home by the Military FSBO Assistance way.

STEP 1 (timing)

Once you have decided to sell your home, you need to decide on the time frame. Do you need to sell now, or maybe 3,6, 9 months from now. It's never too early to start planning, but depending on how much time you have determines what you should do next. If there is time, you should run down to your local book store and spend about $18 and get a copy of "The For Sale by Owner Kit" a book by Robert Irwin. This book explains most everything you need to know about selling by owner except of course the Military FSBO Assistance program. I haven't found an online source that can beet this book. It's easy reading, short and to the point and covers almost everything. The best preparation is to get a good understanding of the process, knowledge is power.

STEP 2 (find a participating agent)

The next thing you must decide is if your going to participate in the military FSBO assistance program. If so then you need to go to www.Off-BaseHousing.com and look for a participating agent in your area. If you do not find an agent listed, this does not mean there isn't one available. Simply that one has not been identified. Send the webmaster an email and they will find one for you. Best of all there are no fee's or obligation for you to use the agent. Agents don't pay referral fee's.

Once you have found an agent that offers Military FSBO assistance, contact the agent and inform him or her that you are considering the program. (see our agent check list)You need to discuss with the agent what it is that they will do for you and what they expect you to accomplish. You also need to discuss the fee. You also need to determine if the agent is willing to guide you through your part of the process. Most will agree to telephone or email consultation. At no time should you feel you're on your own.

Another very important decision you need to make now, is what to do if a buyer uses an agent. Traditionally the seller pays for his agent as well as the buyers agents commission. Since your agent is assisting you for a reduced commission you still need to decide what to do for the buyer's agent. You have a couple options. One, you can explain to the agent that you are selling with assistance and your agent has accepted a reduced commission. You can offer to pay the buyers agent a reduced commission as well., Still far better than 6%. Two, you can tell the agent that the buyer must pay his commission and encourage the agent to reduce the commission. From this a couple things can happen. The buyer will pay his agent full or reduced commission. Or the agent will encourage the buyer to go else ware hoping to secure a full commission sale. However most of the time agents are more than willing to participate. They would rather do this then chance loosing a sale.

If your buyer comes to you with out an agent, you and your agent, needs to decide if your agent will represent both parties. This is perfectly legal to do in most states, as long as a disclosure is signed by both buyer and seller stating the agent will represent both fairly.

If your agent agree to this ahead of time, then you can advertise and offer "Buyer representation". This could be a selling point that interest someone looking for a home that has not contacted an agent.

STEP 3 (preparing your home)

Before you advertise your home, you need to make sure it's ready. Potential buyers won't give you a second look if your home is not looking it's best. But where do you start? I suggest you start at the curb looking at your house. With a pad of paper and a pen start writing down things that are broker, dirty, or otherwise detract from the home. Pay close attention to the yard, flower beds, front door and drive way. These are areas a person driving by notices first. Write down everything you see no matter how big or small or how cheap or expensive it would be to correct.

Carefully inspect the entrance of your home, the hallway, living room, kitchen and master bed room. Continue through the house until you find your self in the back yard. Now that you have a list sort it by how cheap it would be to fix, and how little time, your expensive projects that take a long time should be on the bottom of the page.

Now consider what is stopping you from completing your list. Is it time, money or both? You can easily spend a couple hundred dollars on a week end and make significant improvements. However unless you lie in a newly constructed home, you can probably spend thousands all summer long too. I suggest you start with the obvious things such as the cheap and quick fixes on the top of your list. As you make your way down you can better evaluate if it's worth the time and money to invest correcting. Remember a buyer doesn't know your home like you do, so they only see what lies in front of them. So let's look at the $450 approach.

$475 Home Preparation

Mow the lawn and fertilize. Cost $25
Plant new flowers, clean drive way. Cost $100
Paint the front of the house and trim. Paint front door. Cost $50
Replace light bulbs, tighten up doorknobs, and touch up paint.
Cost $25
Pack / remove access furniture, wall hangings, nick knacks
Storage Cost $50/mo
Have the carpets professionally cleaned Cost $200
Re-caulk sinks and tubs $25

The box explains some of the things you can do to improve the look of your home. By doing so you improve the buyer's first impression, which can lead to a quicker sale.

Buyers like a roomy bright home, so we suggest you remove extra furniture and nick knacks from the home, Let the buyer see more of your home and less of your personal belongings will help them visualize their own possessions and how they will fit.

If your house is painted with darker colors, consider repainting. There's nothing better in a home then the smell of fresh clean paint. By changing to a lighter color, it makes the home appear bigger, and it brightens it up.

One word of caution when considering these projects. Just because you spend the money on these projects to get your home ready to show, doesn't mean you can raise the asking price. Your home is worth what it's worth. By improving it's appearance, you increase your chances of finding a buyer faster, and getting the homes value.

$2800 Home Preparation

Paint the inside of the home. Paint and supplies, Cost $250
Replace the carpet. Professionally installed, 1500 square foot
home, Cost $2250
Update the kitchen cabinets, repaint or stain. Cost $50
Replace broken light fixtures, $100

If your home as been lived in for a while, it may be necessary to make larger improvements to get your home looking great. Determine what projects you need to do next that will have the biggest impact. However don't confuse home preparation with needed repairs. If your roof leaks, the hot water heater leaks, the AC doesn't work etc., these are considered necessities. If you don't correct these items, you may not find a buyer. Even if you do chances are they will make it a condition of sale to have you fix them. You wouldn't go to the store and buy something that is broke, like wise your buyer doesn't want a broken house.

What if they don't know it's broke?

They will find out. You are obligated in most places by law to disclose any and all defects or known problems. If you don't disclose them chances are the licensed home inspector will in his report when your home is inspected.

STEP 4 (determine sales price)

How much is my home worth?

Setting the sales price is key to selling your home. If it's too high, no one will look at it, if it's too low, you loose money, which is one of the reasons your selling FSBO. So how do you determine what is the right price? Before setting a price you have to know what your home is worth. There are a couple factors that determine the value, one is market conditions. Is the market flooded with homes for sale? Another is what a buyer is willing to pay. Start by comparing your home with similar homes that has sold with in the last 6 months in your neighborhood. You can ask a real estate agent for a list of "Comparables". If you're working with one of our participating agents they will give this to you with no problem. Then use our simple work sheet, and compare your home with the list of comparables. It is unlikely to find a home with all the same amenities and features that your have but look for similarities. Here's what to look for:

Don't compare homes with or with out features different than yours, such as:

After you have chosen a few homes very similar to yours, get the average sales price. Be sure your looking at the sales price and not the listing price. The average sales price of the comparables will tell you what your home is worth. This simple process is how appraisers determine home values. But it's not all they consider so don't run out and get the appraisal before advertising your home. Another important factor in determining value is how much some one is willing to pay for it. If you get an appraisal before finding a buyer, it could be misleading.

  "Your home is only worth as much as someone is willing to pay for it"  

Setting a price.

Now you have a good idea what your home is worth, you need to decide how quickly you need to sell. If time is on your side you can price your home at the value price. It may take a while but you will eventually find a buyer. But if you want to sell more quickly, then you need to offer it at a lower price than similar homes for sale. One option is to pass on savings to the buyer the amount you would have paid a full commission agent. If you pay your agent 1%, and the buyers agent 1% then you save 4% in commissions. On a $200,000 home that is $8000. You advertise your home at $8000 below market value and you will get attention.

Just as you looked at comparables, you can bet potential buyers have too. So they know how much home they can get for a specific price range. If you price your home too high, they will know it. However if you price your home at a discount, they will know that too. Everyone likes a good deal, so by offering them one you will attract buyers and all it cost is the same you would have paid in commissions anyway.

Don't price your home to high thinking you can negotiate down to what you're really asking. This tactic is misunderstood and will result in buyers thinking your asking too much for your home. Most likely the buyer has looked at the same homes in your neighborhood that you did while you did your research.

STEP 5 (advertising)

There are many buyers in your area that would like to purchase your home, the problems is finding them. If you knew how to find them it would be easy to sell, but because you don't, it's important to maximize your exposure so they have a better chance at finding your home. You have several options to consider. Advertising can be expensive and time consuming, but this one part you have agreed to do when you decided to sell by owner. Here's a few tips to get you started.

Internet advertising - First advertise your home on Off- BaseHousing.com, this gives you exposure to not only the local community, but all the military personnel that are moving in that may not have arrived yet.

Signs - If your selling your home you must have a sign. You can buy a low cost FSBO sign that has your phone number on it, you can ask your agent if they will provide a sign. By placing a sign your letting everyone in the area know your selling, plus everyone that is passing through. Word of mouth advertising is the best, so let your neighbors know. If you live near a major intersection or highly traveled road, then invest in a directional sign that points in your direction. Place sign so they can be easily seen and not blocked by parked cars, bushes, etc.

Info Box - I strongly encourage you to get an information box (about $8). A sign is an attention getter, but it doesn't say much. People may slow down to look, maybe they will write down your number maybe they won't. But put an info box near your sign and watch how many stop to take a flyer. Now instead of a quick look, they have detailed information to include pictures of your home. Often buyers see a home they like but opt not to contact the seller. But if you have an info box filled with flyers you can spark more interest with more info than a drive by look can do. You can make your own flyers, but we have saved you the trouble. If you advertise your home on Off-BaseHousing.com, you can print all the flyers you want for free.

Message boards - Don't stop with just placing flyers in your info box. Take some of your flyers and post them on bulletin boards in your community. Most military installations have bulletin boards at the BX/PX, Shoppett, and housing offices. Place them in libraries, grocery stores and department stores that have bulletin boards.

Sample - FSBO - $199,500 single family, near base, 4 BR / 3 BA, large lot, motivated seller Off-BaseHousing.com # 791 phone - (555) 123-4567
BELOW MARKET - FSBO $192,000 single family, 4 miles from base, 4 BR / 3 BA, large lot, moving! Off-BaseHousing.com # 791 phone - (555)123-4567

Newspaper - Advertising in news papers allow you to reach the largest amount of people in your area in the shortest amount of time. Newspaper advertising can get expensive, but it's a necessary evil. For about $8 you can advertise your home in the base newspaper. The add will typically run once or twice. For about $25- $45 it can run in the local newspaper for a week. Many home buyers start looking at homes before they contact an agent because they want to see what's available for their price range. A good newspaper advertisement can bring you a buyer. However if you have to run your ad several times, don't run the same ad. Change it. If a buyer keeps seeing the same ad, chances are he will continue to pass it by if he didn't act on it the first time. Your ad should contain; FSBO, Price, Location, Size, Best features, Number bed rooms / baths, contact info. See Sample in the box.

Multiple Listing Service (MLS) - Why MLS is always an option it can be expensive. Ask your agent if they can advertise on the MLS. Listing on MLS carries a big fee, usually around $500. But the exposure can be worth the cost. All agents in your area have access and use MLS to look for homes. There is a down side. It draws attention to you as selling FSBO and this can bring every agent in town to your door hoping to win you over as a full commission client.

STEP 6 (here comes... the scrupulous agent?)

When you advertise your home FSBO, you can attract the people you don't want. So be prepared. Although most agents have good intentions of helping you sell your home, they will try to recruit you as a full commission client. Simply telling them you are participating in the Military FSBO Assistance program and you are working with an agent should be enough for them to leave you alone. Agents don't usually try to recruit clients from other agents, it's unethical. If they try, get rid of them fast no matter what the promise to do for you. Some agents may call saying they have a potential buyer and will want you to work with them. Again inform the agent that you are participating in the Military FSBO assistance program and you have an agent.

STEP 7 (the buyers agent)

A potential buyer will contact you either direct or through their agent. Remember if an agent contacts you representing a buyer, state your position on his fee's early so it's clear and there's no misunderstanding. Tell the agent you are paying your agent 1% and offer to do the same for them. Most agents will accept, something is better than nothing. However there will be agents wanting to hold out to see if you will pay more. The decision is yours, offer more or possibly give up the sale. Remember if the potential buyer has seen your home, and if they decided this is the one for them, they will either convince their agent, pay the difference, or they will drop their agent and contact you direct.

STEP 8 (showing your home)

"Never show
your home at
night, It's
dangerous"

You should always make appointments to show your home. You need time to tidy up, find a neighbor to watch the kids etc. You want to put on a good show, for the buyer with as little distraction as possible. When a buyer wants to see the home, make the appointment with in 24 hours. Houses move quickly, and you don't want the buyer to loose interest by waiting several days until it's convenient. So be prepared to act quickly and change your plans in order to show your home. Never show your home at night. It's dangerous having strangers in your home after dark, and it could give the impression your trying to hide something. So make the appointment during the day, if it's late in the afternoon suggest to the buyer they come back in the morning. When the buyer enters it's a good idea to point out a couple key features then invite them to walk about your home freely. Don't chatter all the way through, but answer questions when asked. Don't follow to close, but keep an eye on what's happening. It's best if two adults are available incase the buyers decide to split up or one gets distracted in one room while the other moves on. If you have properly prepared your home, you would have removed all valuables and have them locked up in a drawer or cabinet. You can usually tell from the excitement if this is the one for the buyer. Ask the buyer if you can have a name and phone so that you can follow up later....

STEP 9 (Showing your home again, Open House)

You may want to consider having an open house. This will bring in a couple more buyers usually right off the street with out agents. Which should be your target. Buyers with out agents need representation, and if you have worked an agreement with yours then he will represent both, saving you money. However there's a draw back. Agents will come through your home with promises of finding a buyer or even stating they have a buyer and will want you to convert to a full commission sale. When agents hold open houses, they rarely find buyers this way, however they use this tactic to find new clients by offering to help them find the home they are looking for. Before holding an open house, advertise! Get some signs out, place a few flyers, let people know your having one. Then prepare for the day, by tiding up again, sending the kids off to friends, have some lemonade and cookies on the table and sit back and wait.

STEP 10 (Follow up with potential buyers)

If you had someone look at your home that expressed interest but they didn't get back to you, call them. It could be they lost your information, or maybe the details of your home became blurry after looking at may homes. You may simply need to remind the buyer some of the key features and point out the things they liked when they visited. Invite them back for a second look. If they choose not to return, ask them candidly what they didn't like, or what made them change their mind. Remember a buyer is shopping for a home in specific price range with similar features, usually in the square footage and number of bed rooms. So ask how your home compared to others they have looked at. You may find that buyers think your home is over priced, or maybe it was a smell or laud noise that turned them off. Some of these distractions can be fixed before your next buyer shows up.

STEP 11 (Accepting the offer)

Now you have a buyer that wants to purchase your home. Two things need to be accomplished One being the terms of sale. The buyer and seller have several decisions to make before a sales agreement can be written. The other is, can the buyer afford the home? It's not up to you to decide. If an agent tries telling you that you will have to pre-approve a buyer, you don't. You simply ask the buyer if they have been pre-approved, if they have they should have a letter from a lender saying they are. If they don't have one, insist that they get it ASAP. You don't want to waist your time over the next week or two with a buyer only to find out they can't get a lone. Now back to the terms. It's important that these get worked out soon after the buyer decided to purchase. There's more to purchasing a home then the sales price. You must decide whom will pay what fee's and what conditions must be met before closure. Some agents will assist at this point, some will not. Be sure to ask you're agent before you get to this point. They may require that you both come to an agreement before he gets involved. So ask for a sales work sheet. A work sheet is not signed, because it is non-binding, but it provides a place for the buyer and seller to negotiate the terms of sale. The agent can later use the sheet in preparation of the sales agreement. Things you will have to decide are:

STEP 12 (The agent takes it from here)

Once you and the buyer have agreed to the terms of sale and all the information is annotated on the work sheet, it's time for the agent to get to work, because your part is done! Well almost, you will need to cooperate during inspections, the appraisal, etc., and you will need to attend the closing with the buyer and the seller. The agent will write up the sales agreement based on the terms you and the buyer agree to. From here the agent will give guidance as to what needs to happen next, such as appraisals, inspections, earnest money, etc.

4. Conclusion

Remember, people sell their home by owner everyday, so there's no reason why you can't It will require you to do some research and preparing y9ur home but once you have a solid plan, execute it! You can save thousands of dollars in fee's, yet still get the assistance from a professional real estate agent. Agents want you to succeed, so they will provide guidance and close the deal.

About the author

Richard A Curtis is a military member with a passion for real estate. He created Off-BaseHousing.com with both the military family and the real estate agent in mind. It is a place to connect those with homes for sale and rent with those who need them with the assistance of real estate professionals.

______________________

Home | Military Mortgage | MilitaryFSBO | Military Home Buyers | Links