For Sale By Owner Does Work With MLS4Owners.com

A warning: this is one of those, “It worked for us, it can work for you!” stories.  If that kind of thing turns you off, just keep clicking along.  If you’re interested in someone’s experience selling their own house or may be curious about doing the same thing yourself, read on!

Kim and I decided to go the For Sale By Owner – FSBO (fiz-bo) route believing we’d be better paid a commission than a realtor.  Maybe we are just money grubbing people, or maybe we didn’t think a realtor would really earn the nearly $20,000 they’d get off our house.  Ok, it was more of the money grubbing part and with the encouragement from our friends Dan and Amy who had sold a house this way in the past, we took the plunge.

We first checked out a number of books from the library.  Knowing we’d only be using the books once in the near future, the library was the best, cheapest route.  The book we found to have the most useful information for our situation was For Sale by Owner: A Complete Guide: Everything You Need to Sell Your Home at the Highest Price Without Paying a Broker!.  I think it has the longest name of any of the books, but it stayed on our shelf the whole way through the process.

The next step was getting over the fear of the unknown.  As is almost always the case, the fear of the unknown was more in our heads than based in reality.  Sure there are a bunch of steps, but once you know them, they are not as menacing or scary as they seemed.  Besides the normal staging and prepping the house, here is what MLS4Owners.com helps with:

• Gets you listed in the Multiple Listing Service (MLS)
• Has someone come out and put up a sign
• Sends you those little arrow signs (2) to help direct buyers (optional)
• Sends you a lock box so realtors can show your house when you’re not around (optional)

It might not seem like much, but getting in the MLS system is a BIG part of it.  The sign is nice too as a lot of buyers do it the old fashioned way and just drive a neighborhood they want to live in and see what’s for sale.  Someone will come out and put the post in for you (except some rural areas).  You are then given another placard to go below the main sign with your phone number.  Additional placards can be purchased through them as well.

For our part, we:

• Signed up with MSL4Owners.com ($695)
• Designed our own flyers (free)
• Printed out 100 double sided color flyers ($110)
• Set up the pointing arrows to our house ($20)
• Set up the lock box ($95 rental fee)
• Sent in a 600 character description of our house to go in the MLS listing (free)
• Added an additional sign to the main one describing our property and phone number ($20)
• Set up a fax to email account with FaxPipe ($18/mo for 3 months with one free)
• Added voicemail to our phone so we could access messages from anywhere ($5/mo)
• Filled out Seller’s Disclosure (free)
• Organized our records for current mortgage.
• Take decent pictures of our house once staged.  15 allowed in posting (free)

That was the basics of getting started.  We didn’t advertise as much as some people, just a flyer here or there, an email to friends, a post on this blog and an occasional listing on Craig’s List.  The sky is the limit here and that’s a good thing if your creative.  It took maybe a month before maybe 50 of the flyers were gone.  Things were slow but steady.

Slow for us was 1-3 calls a week and 1-2 showings a week.  We were there for all the showings but one.  A note for non-realtors out there: realtors on the whole are a timely bunch.  They don’t live on the same time scale as the rest of us so be prepared to get a lot of calls at first wanting to preview or view the property.  Be ready for short time scales (“Can I drop by in 45 minutes?”).  Be ready to be flexible with your schedule if you are showing it yourself.

And be ready to be patient with those that aren’t realtors.  Individual buyers without a realtor are more likely to kick the tires a lot.  And you have to either be comfortable with that or set some limits on what you will and won’t do.  But the payoff if someone buys without a realtor could mean more money in your pocket (you get to set the commission you’re pay a buyers agent, by the way).

Now then, let’s jump forward to the time when you accept an offer.  That’s where more of your time is involved.  Here are some associated actitivites we encountered in the process.  We had a buyer who was paying cash and thus didn’t have to deal with financing, making our transaction a bit easier.

• Set up Escrow account.  We used Wells Fargo Escrow and the cost was about $500 all said and done.
• Obtained payoff statements from current mortgage holder.  Escrow did this as well.
• Escrow also acquired the Warranty Deed and got some old items cleared from the title on the house.  Titling fees were about $400 I believe
• Escrow also paid local taxes associated with the seller side of the transaction.  Check with your state, county and city to anticipate these.

As you can see, the escrow company really did a lot of the leg work.  All we had to do to set up the account was fax them a purchase agreement.  It was real easy and they communicated well with us.  I’d recommend Wells Fargo Escrow (loosely affiliated with the bank) if they are available in your area.

We did not pay for a document review.  This can be handy though if you have a difficult transaction with lots of paperwork.  The costs are reasonable to have the piece of mind that comes with an experienced real estate lawyer looking over your documents.  I got a good response from Kirk Mulfinger at his own law practice.  His website for sellers is located here and lists prices.  It ranges from $600 for document review to much more for a custom marketing package.  The prices were in line with others contacted.

Our transaction closed in about 3 weeks.  Pretty fast.  The house was on the market for 2.5 months before we had an offer and the buyers came by a total of 4 times, spending about 10 hours total talking with us and others (they have plans to remodel and wanted to make sure certain items could be handled).  So there is a large time investment involved.  But for us, paying no commission either way, the payoff was worth it.

If I do some loose math with the above numbers, not counting escrow services, county taxes or the normal reconveyance fees and such that anyone pays in a transaction, with a realtor or without, our total out of pocket for the 2.5 months of listing the house and selling it was about $1000 out of pocket.  Escrow services were as noted, but that’s highly variable depending on location.

And that’s about it!  It wasn’t a super easy process, but it really was not a lot harder than buying a car or another other large transaction.  You can do it yourself and you can educate yourself enough for the easier type of transactions.  The main barrier was getting past the unknown and I hope, in some way, this post will help take out some of the mystery in going the FSBO route.  It paid for us to go this route.  If you have any questions, please post them in the comments section below and I’ll answer as best I can!

Check out the MLS4Owners.com website for more information.  While they are only available in Washington State, they are a great benchmark if you need to look elsewhere for FSBO help.

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