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Your home / Real estate

Sell it yourself and save

If you prep, price, and market your home the right way, you can find a buyer – even in this gloomy real estate environment.

How to sell your home yourself (Illustration by Katy Lemay)
By Elizabeth Gehrman
October 24, 2010

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When Linda Reifler-Alessi put her Hyde Park three-bedroom, two-bath stick Victorian on the market in April, “it never occurred to me to use a realtor up front,” she says. “We’re just do-it-yourselfers, and I felt I could do a really good job.”

According to the National Association of Realtors, only about 11 percent of sellers nationwide and 5 percent in Massachusetts sold their houses in 2009 with no assistance from a realtor. Yet new technology gives everyone easy access to information that was previously available only to agents, and tools from video sharing to social media can get your house seen by more potential buyers than you could have imagined just a few years ago. Today’s competitive market, however, means homeowners need to know much more than they did back when properties were being snapped up like dresses at the Running of the Brides; still, the savings can be worth the effort.

Reifler-Alessi and husband Warren Alessi were both artists, but Reifler-Alessi, in a midlife career switch, trained as a research librarian. In March, when she was offered a job at a library in St. Petersburg, Florida, where the couple now live, she wasted no time putting her new training to good use, learning about decluttering, staging, pricing, inspections, contracts, and more in two short weeks. “I just read and read and read,” she says. The couple had a contractor come in and do some work – re-grouting the bathroom tiles, painting the back hallway, replacing rotting wood on the porch – and on April 1 they put the house on the market through owners.com. Despite the recession, says Reifler-Alessi, “we sold it on the first weekend.”

What did the couple do right? And what do you need to know to replicate their success?

Price It Right

One of the main jobs of real estate agents is to inform sellers of the market. “I have what’s called a market snapshot for all my sellers,” says Stephen Bremis of Bremis Realty in Somerville. “It looks at houses that were sold, houses that are pending, and houses that are for sale, how long they were on the market, and how much prices were negotiated.” Bremis subscribes to a service that gathers all that information for him, but there’s no reason you can’t find it yourself, now that sites like Zillow and Trulia not only make public-record stats easy to find but also offer charts and graphs regarding communities’ demographics, school districts, crime rates, and more. The information on these sites is sometimes out of date, but it provides a good starting point.

Conventional wisdom among realtors is that chasing the market by dropping your price once, twice, or more can make your house seem undesirable. It’s far better to price it correctly from the beginning. In Boston, according to a nationwide study released by Trulia in September, the average price reduction on a house on the market is 7 percent – not a huge amount, but it adds up if your home is in, say, the $500,000 range.

Do your online research, but don’t hesitate to spend a few hundred dollars on an appraisal before you list your property. “The money you saved on the commission, and then some, is gone if your buyer gets an appraisal that comes in too low,” says Bremis, noting that banks won’t lend more than the appraiser says your house is worth.

And he adds, “Just because you’re not going to use an agent doesn’t mean you can’t consult with one.” Often, he points out, for-sale-by-owner (FSBO) properties end up with an agent after a month or two, so it may be worth an agent’s time in the end to give you a consultation.

Entice Buyers’ Brokers

Courting buyers’ brokers makes sense because often they’re the ones bringing buyers to your house. If a buyer’s broker has a choice between a listing that will offer him a commission and one that won’t, which do you think he’ll steer his client to?

Typically, sellers’ agents charge a commission of 6 percent of the selling price and then give half or one-third of that to any realtor who brings a buyer to their deal. “If the average in your area is 2.5 percent,” says Steve Udelson, CEO of owners.com, based in San Francisco, “give the buyer’s broker 3 percent. This is a tactic I’ve seen builders use – they pay above-market commissions to buyers’ brokers to get the property sold. You want to make sure buyers’ brokers are motivated to show your home.” You’re still saving at least 3 percent on your end, and if a buyer who’s not working with an agent should happen to make an offer, you’ll pay no commission at all.

Get Professional Help

“Even with a buyer’s broker fee,” Udelson continues, “you’re saving half the commission. The question is, how do you use that extra money to increase your chances of selling?” One way is to spruce up your home. Reifler-Alessi, for example, paid her contractor about $10,000 to “finish every last detail we never finished in 30 years.” Though that’s a significant up-front cost, she adds, since the house sold for $400,000, “percentage-wise, I didn’t think $10,000 was that much to get it looking perfect.” Zillow spokeswoman Katie Curnutte says most buyers don’t want to do substantial renovations, even if it means saving money on a fixer-upper, so sellers should “try to make the house stand out as someplace they can move into right now. They want to be able to walk in and see themselves living there.”

In addition to doing repairs and improvements, experts recommend hiring a stager and a cleaning service. Reifler-Alessi spent $800 getting her house cleaned “within an inch of its life,” she says. “It wasn’t a house where the buyer would have to do nothing, but it looked like a house where they’d have to do nothing.”

Bremis, who is an accredited stager, says hiring a second pair of eyes is key. When he tried to act as his own agent a few years ago, he didn’t see the clutter until agents at his open houses pointed it out to him. A stager can deliver a report with recommendations for as little as $100.

Another professional to bring in early is a photographer. With 90 percent of home buyers starting their search online, having lots of good photos to post is crucial. Research done by Trulia in 2009 found that listings with six or more photos were viewed twice as often as those with fewer, and a professional photographer can help you avoid common pitfalls, such as bad lighting, focusing on a piece of furniture rather than the room as a whole, and taking pictures that make the house look cluttered.

Finally, it’s important to have good legal representation from the beginning. Some boilerplate forms – such as purchase and sale agreements – are available online, but a real estate attorney can help you vet these and assist with negotiations, the title search, and disclosures, and answer questions from the buyer’s lender.

Yes, hiring outside help will cut into your bottom line, but it can also mean the difference between selling your house and not. “The median sale price now is $263,800 in the Northeast,” says Joanne Cleaver, senior content manager at forsalebyowner.com, based in Chicago. “Six percent commission on that is $15,828; 3 percent is $7,914.” So even if you offered a competitive buyers’ broker fee, deduct $300 for the appraisal, $300 for the photographer, and $600 for the lawyer, and add $1,000 for upgrades such as a virtual tour, “you can still save almost $6,000.”

Put Your Listing Where Buyers Will Find It

The multiple listing service, or MLS, is an electronic database that displays photos of a home and lists its key features – number of bedrooms, bathrooms, and fireplaces and square footage, for example – along with information such as taxes, nearby schools, area amenities, and a description written by the realtor. In decades past, only homeowners selling through an agent had access to the MLS, but today some brokers and websites offer a “listing only” service; that is, for a small fee, they’ll put your property on the MLS for you.

Some FSBO websites charge a fee to list with them and an additional fee to add your property to the MLS; others, such as owners.com, list your house on their site for free and charge you only for the MLS listing. Either way, because the MLS is the largest and most comprehensive listing service in any given region, and the one realtors use exclusively, you need to make sure your house appears on it from the start – not only to bring in buyers’ brokers but also to ensure your listing gets the widest exposure possible. Many popular sites get their content from the MLS, including, in the Boston area, realtor.com, Zillow, Yahoo!, Trulia, and boston.com. “Don’t monkey around by posting your house on Craigslist or FSBO websites only,” says Udelson.

Once your listing is on the MLS, expand its reach even further by networking, both in person and online. Pass out fliers at your book club or block party, and post them on any public bulletin boards in your neighborhood. “I’ve heard people say they don’t want their neighbors to know all their business,” says Tara-Nicholle Nelson, consumer educator at Trulia, “but the neighbors often know people who want to live in that neighborhood. You have to cast a wide net.”

And consider social media like Facebook, MySpace, and Twitter. “I do think social media have and will continue to change the way people connect with each other around their house hunts,” Nelson says. The exposure you’ll get from social media depends, of course, on how extensive your network is to begin with, but “you can’t underestimate the power of word of mouth,” says Zillow’s Curnutte.

In her real estate blog, Ask Tara @Trulia, Nelson goes a step beyond social media by recommending you “post a video love letter about your home on YouTube.” If you don’t already have one, get an inexpensive video camera and walk through your house and your neighborhood, she advises, telling prospective buyers not only what your family adores about the house but also showing them your favorite park or coffee shop. “It helps them visualize living a great life there, too,” she writes.

Step Into Your Salesman Shoes

Selling your house can be an emotional endeavor. Even Bremis, the Somerville real estate agent, admits he felt out of his element when he tried to market his own home. “Even though I do this for a living,” he says, “an agent will come in with an unbiased eye.” The trick is to view your own property with the same kind of dispassion and objectivity that a real estate agent would bring to it. “It can be stressful to have a potential buyer criticize your decorating,” says forsalebyowner.com’s Cleaver. “That’s just part of the dynamic of this transaction. A house is a really personal thing; it’s a reflection of who you are. Part of the process of selling is decoupling your identity from the house.”

When showing your home, Reifler-Alessi recommends, let people look around on their own; it keeps them from feeling pressured. “My husband hovers and tells his own stories,” she says. “I asked him to make himself scarce. I greeted them at the door, said, ‘Please come in, you’re welcome to look around,’ and then made myself look busy.” You don’t want to bond so much with potential buyers that you find yourself overloading them with irrelevant information or, worse, anecdotes that have a whiff of “ick” – such as the time your cat gave birth to kittens in the closet.

Cleaver encourages sellers to make a booklet that people can take with them as they tour the house and hang onto when they leave. “There’s no reason to trail them like a stalker,” she says, “but they do need a little interpretation – otherwise how would they know the central air was updated in 2003?” She even recommends putting tags or “talkers” throughout a room, tidy slips of paper saying, for example, “Kids’ bathroom was renovated in 1996.”

And be honest even when your answer is less than positive. It makes you seem more trustworthy and is a good way to prepare people for that disclosure statement they’ll be asking for if they decide to make an offer – the one that tells them if the roof needs to be redone, if there’s a school going in that will block the view next year, or if the fence isn’t situated quite right along the property line. “Disclosures are a massive area of liability for sellers,” says Trulia’s Nelson, a former attorney. “My advice is to disclose anything that could make a difference in a reasonable buyer’s decision making.”

Be Patient

Gregg and Dinara Daniels of Weymouth put their four-bedroom, two-bath house in the Wollaston Beach area of Quincy on the market themselves in January of last year, after having already bought a new home. It didn’t sell for eight months. The whole time, they were paying two mortgages, doing the maintenance on both houses, and shuttling back and forth for open houses and showings. Still, they never got to the point, Gregg says, of “complete panic.” “Unless you’ve got the steal of the century, you’ve got to be really patient,” he adds, “especially in this market.”

“People start doubting themselves,” says Dennis Craig, president of isoldmyhouse.com in Marlborough. “Sometimes people will buy [an online FSBO] package on a Friday and if the house isn’t sold by Sunday, they’re anxious. But you have to give it 60 to 90 days.” If someone calls the website and says they’ve had no action, an isoldmyhouse.com employee will go through the listing with the seller to try to determine if the price is too high, if the pictures aren’t as good as they could be, or if there are any other marketing problems. Some sellers try the recommended tweaks and stay the course, while others decide to hire an agent.

Gregg Daniels, who listed with Craig’s site, is glad he didn’t take the second option: “At the end of the day, I saved $11,000 and didn’t do $11,000 worth of work.”

Help the Deal Go Smoothly

Even with all this effort, getting people interested in your house is often the easy part. There are still negotiations to be conducted and paperwork to be done.

“FSBO sales and open houses tend to attract more unapproved buyers,” says Joseph McBreen, a loan officer with Mortgage Master in Belmont. Experts say it’s especially important to make sure buyers are preapproved in today’s economic climate, where it’s much tougher to secure a mortgage.

Bremis points out that a good part of a realtor’s job is to make sure the preapproval is solid. He objects when a buyer comes to him with a preapproval from a bank in another state or from an online lender. “I question whether their appraiser is going to be knowledgeable,” he says, “and how the bank is going to view the property from Florida.” He prefers dealing with lenders he’s acquainted with; he has known others to drag their heels, holding up a deal while the seller continues to pay the mortgage.

This is part of the reason, Bremis says, you should make sure your purchase and sale agreement includes deadlines – for the inspection, the mortgage application, the mortgage commitment, and so forth. This contract, he says, is “the nuts and bolts of the deal. It sets the framework for the transaction.” In addition to a general inspection, separate inspections can be done for mold, pests, lead, and radon; make sure the buyer gets any of these he wants done in a timely manner. “Otherwise he could do it a month later,” Bremis says.

Another way to help keep the deal on track is to gather up all the relevant paperwork – receipts for improvements, evidence of special assessments, homeowners’ association papers, and anything you might have to give the IRS at tax time – and make a set for the appraiser, buyer, and buyer’s lender. “Make it easy on your buyer by giving them all the documentation they need to support the sale price, to help make the deal close,” says Cleaver.

And don’t take the house off the market too soon. “If you just have the preapproval,” says Udelson, “definitely continue to solicit interest in your house. When you get a formal offer and it works and you accept it, when you have a date for closing and an escrow deposit, that’s when you can change your MLS status to ‘pending.’ ”

If the deal doesn’t come together but your buyer is still interested, Cleaver recommends considering a lease-to-own arrangement. “Typically, you put a portion of every month’s rent toward a down payment,” she says, “and at the end of a year the buyer can make another run at a conventional loan and try to complete the sale. It’s a fallback position for both parties, but both achieve their short-term goal: The seller is out, and the buyer is in.”

Elizabeth Gehrman is a freelance writer in East Boston. Send comments to magazine@globe.com.

  • October 24, 2010 cover
  • Your Home: Do-it-yourself