If you’re an HGTV fan, chances are good that you’re familiar with the series “Income Property” and its host, Scott McGillivray. On the show, McGillivray helps homeowners turn portions of their houses into rental apartments that will offset their mortgages. In real life, McGillivray — who is a licensed contractor and real estate investor — has completed more than 100 real estate transactions.
When it comes to selling a home, he notes that taking the traditional route of hiring a real estate agent can be expensive. Selling a home on your own lets you keep more of the profits in your own pocket, provided that you can avoid costly missteps.
“You should keep as much money as possible when selling home,” said McGillivray. “Even an amateur is going to be surprised at how effective they can be if they follow a system.”
Here are the steps McGillivray recommends if you want to sell your home on your own.
1. Cut Out the Middleman
Real estate agents typically charge a 5 percent to 6 percent commission on a home sale — which is split in half if both the buyer and seller have agents, McGillivray said. If you sell your home on your own, you will save at least the 2.5 percent to 3 percent that the seller’s agent would have charged. If you sell your home for $350,000, you will save more than $8,000 by cutting out the middleman.
Additionally, you can save the full 5 percent to 6 percent if a buyer comes to you without representation. Without agents, you’ll save more than $16,000 on a $350,000 home sale, McGillivray said.
2. Get Your Home Listed on the MLS
“It’s tremendously important that you get on a platform that gives you exposure to buyers and agents,” McGillivray said. That platform is the Multiple Listing Service, or MLS, which is the database of homes for sale in a market. Homebuyers can see properties on the MLS through websites such as Realtor.com, Zillow.com and Trulia.com.
In the past, only real estate agents could have homes listed through this service. However, today’s homeowners can list their own properties on the MLS by paying a flat fee to various sites. McGillivray recommends using Owners.com, which places homes on the MLS and gives homeowners access to advisors who can help with the sales process, including the closing. The basic MLS listing package is $395 for six months.
If you don’t get your home listed on the MLS, you’ll have to rely on classified newspaper ads, online sources such as Craigslist.org or luck to find a buyer.
3. Use Professional Signage
Listing your house on the MLS is the best way to get your property noticed by potential buyers. However, you also want to market your home well. According to McGillivray, posting a skimpy “For Sale” sign with a spot to add a phone number in your yard is “a recipe for disaster.”
Instead, the real estate pro recommends having a sign professionally made. Online services such as Owners.com and ForSaleByOwner.com provide each home seller with a sturdy sign as part of the MLS listing package.
4. Get an Appraisal
McGillivray suggests hiring an appraiser to evaluate your home before putting it on the market. Doing this will help you avoid any surprises when the buyer’s lender has the house appraised to determine how much to loan. Appraisers typically charge $300 to $400, according to Realtor.com, and the price is well worth it.
5. Don’t Overprice Your Home
One of the biggest mistakes home sellers make is overpricing their homes. “Everybody thinks their house is worth more than it is,” McGillivray said. “Your house is only worth what someone is willing to pay for it.”
If you set the price too high, you won’t get enough traffic. On the other hand, listing your house at a realistic value means you will get more offers sooner, according to McGillivray. Ultimately, pricing your home accurately will help you sell for a better rate.
In addition to securing an appraisal, you can take advantage of information that’s available for free from online real estate listing sites. Check the list prices of comparable homes in your area and see how long they’ve been on the market. Then, consider whether your home offers more or fewer amenities than competing properties.
6. Look for Anchor Properties in Your Neighborhood
When someone posts a house for sale and lists it too high, the home becomes what McGillivray calls an anchor property. Sellers will assume that other properties in the neighborhood are better deals, if they’re listed for less.
Not only can an anchor property drive more traffic to your home, but it can also allow you to list your home at a higher price than it is actually worth. For example, if your neighbor puts his house up for sale at $600,000, and you know your property is worth $525,000, you can list it for more because it will still look like a deal next to your neighbor’s house.
So, look for overpriced homes in your area and then list your house for less.
7. Depersonalize Your Home
Before you open your doors to potential buyers, you need to depersonalize your home so someone can see himself or herself living there. For best results, remove those family photos and collectibles that might be dear to you but a turnoff to others.
“You don’t want a picture of you and your dog wearing a tuxedo hanging on the wall,” said McGillivray, who actually saw this image in a house that was for sale. “Strip it down and make it appeal to 90 percent of the population, 90 percent of the time.”
8. Make Minor Repairs
You don’t have to spend a lot of money to remodel your home before you sell. However, you should at least clean the space thoroughly, make small repairs, replace worn carpets and add a fresh coat of paint to walls.
You want people to walk into a house that looks well maintained. If buyers see that you can’t take care of minor details, they’re going to assume you’ve let bigger problems escape your attention, too, McGillivray said.
9. Improve Curb Appeal
McGillivray revealed that some of the best deals he’s found were properties that looked bad from the road. “People do judge a book by the cover when it comes to real estate,” he said.
By the time potential buyers reach your front door, they’ve already formed opinions about your house. For best results, spend a day — and a few hundred dollars — painting your front door, hanging new house numbers and installing updated fixtures, he said. Additionally, sellers should clean up their yards by pulling weeds and trimming shrubs.
10. Stage Your House
You can stage your house on your own to make it look more appealing by searching for tips on sites such as HGTV.com. However, if you’re in a competitive housing market or selling a high-end property, you should consider spending some money to have your home staged by experts.
Professional stagers have been trained to make houses appeal to buyers by removing clutter, depersonalizing rooms, rearranging furniture and creating a “model home” feel. You can use the savings on real estate commissions to help pay for a stager so your home sells for more, faster.
11. Disclose Problems to Potential Buyers
Most states require sellers to disclose all of the home problems they’re aware of. These issues include past problems, like plumbing leaks that resulted in mold growth.
Don’t try to hide anything, or you could face a lawsuit if an issue is detected after the home is sold.
12. Be Ready to Negotiate
A home’s list price is a suggestion, not a rule. Said McGillivray, you shouldn’t be afraid to negotiate with buyers when they make offers on your home.
Because real estate negotiations are conducted on paper, sellers don’t have to worry about confronting buyers directly. You can also negotiate on both price and terms. If you don’t want to come down much in your asking price, be flexible with your terms, such as the closing date or appliances you are willing to leave in the home for the new owner.
Owners.com and other listing services of for-sale-by-owner properties connect home sellers with licensed real estate agents who can guide them through the negotiation process.
13. Don’t Make a Misstep at Closing
When you and your buyer are ready to sign on the dotted line, a mortgage lender will typically be involved. He or she will likely provide you with an escrow officer to walk you through the final steps of your home sale.
However, McGillivray recommends taking the time to understand the legal requirements of your home sale. You might want to hire a real estate attorney or, if you used a flat-fee listing service, request assistance for your closing.
About the Author
Cameron Huddleston is an award-winning journalist with nearly 14 years of experience writing about personal finance. Before joining GOBankingRates, she was a contributing editor for Kiplinger.com and wrote the popular Kip Tips column, which was syndicated in Tribune newspapers nationwide. Her work has appeared on Yahoo!, MSN, AOL Daily Finance and other online and print publications.