When you choose to go the For Sale by Owner (FSBO) route to sell your house quick, you decide to take on a lot of extra work. Hopefully the extra profit you'll pocket will be worth it. However, now not only will you need to be ready show your house at a moments notice, but you will also be in charge Marketing, Market Research, and Advertising.
Out of these, Market Research is the most important. The price you set on your house is the main determining factor on how quickly you will sell your FSBO. But how do you come up with the right price? Here are a few things you might want to consider.
Appraisals - Most people think that appraisals are the only way to determine the price of a house. However, appraisals cost around $300 - $500, and may still not give you the information you need. The best way to find out what your house is worth is by asking a Real Estate Agent (yes, you can ask an Agent, even if you are going the For Sale By Owner route).
Agents commonly provide what is called a CMA (Comparative Marketing Analysis). They use this as a sales proposal to solicit your listing. It is best to get a CMA from three different agents. Make sure you select agents you would want to work with in the future, in case you decide not to go the FSBO route.
The CMA should include information on: 1) Comps - What homes similar to yours have recently sold for; 2) Suggested listing price - If you talk to three agents, you may get three different prices. Usually, one will be high, one lower, and one in the mid-range. You should be able to get a good feel for the average with the three different opinions. 3) Marketing Strategy - because the Agent wants your listing, he or she should be able to tell you what types of marketing will be done to help the sale (example: Web site or Newspaper advertising, open houses for brokers and buyers, etc.).
You might have enough information to make your decision after speaking to these Agents, but you should also do a little research of your own by looking around your neighborhood and checking out prices of homes similar to yours to insure a quick sale.
After all of that, you may still be unsure if the price you have set is the best one for a quick sale, but here are a few things to calm your mind.
Your for sale by owner price may be too high if you do not immediately get agents asking to set up showings; you have not had one or two serious buyers in the first couple of weeks (serious buyers are those who have come back for a second look); or you have not received a valid offer within four to six weeks. In this case, you may want to consider lowering the price by 2 to 5 percent for two to three weeks and see what happens.
Don't worry too much about under-pricing the FSBO. If your price is right, you will get multiple offers, which, in the end, will raise the selling price.
Good Luck!
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