Selling your home is a significant undertaking, and for some homeowners in Ohio, the idea of selling “For Sale By Owner” (FSBO) is an appealing prospect. In this comprehensive guide, we’ll explore the process of selling a house by owner in Ohio, covering essential steps, potential challenges, and tips to help you navigate this journey successfully.
Understanding FSBO in Ohio
Before diving into the specifics, it’s crucial to understand what FSBO means. FSBO stands for “For Sale By Owner,” a method of selling a home without the involvement of a listing agent. In an FSBO scenario, the seller assumes the responsibilities typically handled by a real estate agent, such as pricing the home, arranging showings, and negotiating the deal.
One of the primary motivations for choosing FSBO is to avoid paying the listing agent’s commission, which usually amounts to around 3% of the sale price. However, it’s important to note that in most cases, you may still need to offer a commission to the buyer’s agent, typically around 3% as well.
The Role of Legal and Professional Assistance
While FSBO allows you to save on the listing agent’s commission, it doesn’t mean you can completely bypass professional assistance. Here are some essential considerations regarding legal and professional help when selling your home in Ohio:
1. Mandatory Disclosures: In Ohio, sellers are required to provide a Residential Property Disclosure form, disclosing any known problems with the property, including issues like leaks, electrical problems, and pest infestations. Failing to meet this requirement can leave you vulnerable to legal issues.
2. Legal Oversight: While not mandatory, hiring a real estate attorney is highly recommended during an FSBO sale. An attorney can help you navigate the legal complexities, review and prepare essential documents, and ensure compliance with Ohio’s real estate laws.
3. Local Regulations: Be aware that specific regions in Ohio may have their own laws regarding signage for FSBO listings. Before putting up any signs, research and understand the local regulations to avoid potential fines.
4. Document Preparation: Many FSBO sellers in Ohio choose to hire an attorney to review and prepare key documents, including the seller’s disclosures. This step is crucial to protect your interests and minimize legal risks.
What to Disclose When Selling a House in Ohio
Ohio law requires sellers to make a good faith effort to disclose specific details about the property’s physical condition. These details include:
- The presence of hazardous substances (e.g., asbestos or lead paint).
- Information about the water source and the condition of the sewer system.
- The overall condition of the property’s structure, including the foundation and roof.
- Any past or present issues with major mechanical systems.
- Damage from water, fire, or smoke.
- Damage from wood-destroying insects.
- Violations of codes, zoning laws, or nonconforming uses.
- Recent or proposed assessments, fees, or abatements.
- Known boundary disputes.
- Any other material defects that are known.
Why Sell a House by Owner in Ohio?
The decision to sell a house by owner often revolves around the desire to save on commission fees. According to data from the National Association of Realtors (NAR), the top three reasons people choose FSBO in Ohio and elsewhere are:
- Avoiding Commission Fees: Many sellers are motivated by the desire to keep more of the sale proceeds by avoiding the typical 6% commission split between the listing agent and the buyer’s agent.
- Selling to a Known Party: Some FSBO sales occur when homeowners sell to relatives, friends, or neighbors, eliminating the need for agent involvement.
- Direct Buyer Contact: In some cases, buyers reach out directly to the seller, simplifying the sales process.
However, it’s essential to understand that while FSBO may appear financially advantageous, data suggests that FSBO homes often sell for less than agent-assisted sales. According to NAR data, FSBO homes had a median sale price of $225,000, significantly lower than agent-assisted homes at $345,000. Independent studies have also shown that FSBO homes tend to sell for an average of 5.5% less than agent-marketed sales.
The Pros and Cons of Selling a House by Owner
Before embarking on an FSBO journey, it’s crucial to weigh the advantages and disadvantages:
Pros of FSBO:
- Save on Commission Fees: You can potentially save on the listing agent’s commission, usually around 3% of the sale price.
- Control: You have full control over the sales process, negotiations, and decisions.
- Direct Communication: You can communicate directly with buyers, eliminating any intermediaries.
Cons of FSBO:
- Lower Sale Price: FSBO listings often sell for less than agent-assisted sales, which can offset the savings from avoiding the listing agent’s commission.
- Extended Time on Market: Homes listed as FSBO may take longer to sell, as they have limited exposure compared to agent-listed properties.
- Complex Negotiations: Negotiating without the help of an experienced agent can be challenging and may lead to leaving money on the table.
- Pricing Challenges: Determining the right listing price can be challenging, potentially leading to overpricing or underpricing, both of which can have negative consequences.
- Marketing Effort: Marketing your home effectively requires time and effort, including creating compelling listings, taking high-quality photos, and reaching potential buyers.
Steps to Sell a House by Owner in Ohio
Now that you understand the basics of FSBO in Ohio, let’s delve into the step-by-step process of selling your home on your own:
1. Prepare Your House for Sale
Whether you choose FSBO or work with an agent, preparing your home for sale is crucial. Some key tasks include:
- Decluttering and depersonalizing your space.
- Making necessary repairs and updates.
- Deep cleaning to ensure your home is in the best possible condition.
- Enhancing curb appeal with landscaping, fresh paint, and other improvements.
2. Determine a Competitive Price
Setting the right price for your home is critical. While you won’t have access to a full Comparative Market Analysis (CMA) as an agent would, you can conduct your own research:
- Start with online home value estimators like HomeLight’s Home Value Estimator or other reputable tools.
- Narrowly filter your search for comparable properties (comps) in your area, considering factors like square footage, the number of bedrooms and bathrooms, and home type.
- Use multiple real estate websites to gather data on recent home sales in your neighborhood.
- Consider investing in a professional appraisal for a more accurate assessment of your home’s value.
3. Photograph Your Home
High-quality photos are essential for attracting potential buyers. Consider hiring a professional real estate photographer to capture your home’s best features. If you choose to take photos yourself, use a good camera, pay attention to lighting, and capture every room from various angles.
4. Craft an Engaging Description
Your listing description should be more than just a dry list of facts. It should tell a story about your Ohio house. Highlight its unique and desirable features, such as a breakfast nook or sunroom, and emphasize functional spaces like kitchens, which are often considered the heart of a home. Mention recent upgrades, high-end appliances or finishes, and any outdoor features like pools or patios. Don’t forget to talk about neighborhood amenities, nearby parks, restaurants, and attractions. In today’s telecommuting age, having a separate workspace is also a valuable asset, so be sure to include this if your home has one.
5. Highlight Surrounding Area
In addition to describing your property, mention the benefits of the surrounding area. Talk about easy access to freeways, local parks, popular restaurants, and any other selling points nearby. Consider using an aerial view photograph to showcase your home’s proximity to local attractions and amenities.
6. Provide Detailed Property Information
Include all relevant property details, such as the age of the home, square footage, architectural style, included appliances, exterior materials, flooring types, HOA fees, school zone information, and lot size. Many buyers and real estate agents pay attention to these details, so accuracy is key.
7. Manage showings
If your marketing is successful, your next step will be to show the home to prospective buyers. Welcome to the busiest phase of the home sale process. According to Breeckner, a major reason some FSBO sellers switch to an agent is that they underestimated the time, energy, and expertise needed to manage this crucial step.
“As an agent, part of my job is to get as many people as possible into your home to see it,” he says. “It can be exhausting for a FSBO to make their property that accessible, a real challenge.”
To manage the logistics of showings:
- Respond to inquiries ASAP.
- Set end times if you need to fit many showings in one day. This will also create a sense of demand and urgency for buyers to place offers.
- Remove or secure valuables.
- Make sure the home is clean and tidy for showings.
- Follow up with buyers’ agents after showings to get their feedback.
Wall adds that one thing to look out for at this stage is the presence of real estate investors. “If you get four or five offers early on after listing your home on the market, and you’re noticing a majority of them are investors, be careful,” he cautions. “Investors can’t pay retail price. They’re buying at 60 or 70 cents on the dollar. So not being able to discern investment offers from traditional buyer offers could literally cost you tens of thousands of dollars.”
Should you be present for showings? If you’d rather not be present for every showing, consider using a lockbox with a code to let buyers’ agents enter the house. This is standard industry practice among agents. To ensure you’re working with someone legitimate, use Google or sites like arello.com to check their real estate license number.
With unrepresented buyers, plan to be on the property for the showing. During a showing, we recommend you:
- Point out a few highlights of the house.
- Let buyers look without hovering.
- Be prepared to answer questions.
- Avoid the temptation to tell all — let the house and listing do the talking.
8. Evaluate offers and negotiate a deal
You’ve got your first offer — congratulations! Before signing anything, Breeckner says it’s vital to do your due diligence.
“Negotiating a deal is another place where working with an experienced agent is key — there’s really no getting around that,” he says. But that said, he urges FSBO sellers to ensure that prospective buyers have pre-approval and proof of funds. Otherwise, you risk getting burnt.
“You want to make absolutely sure that the buyer you’re dealing with is financially backed and able to purchase your property,” Breeckner says.
According to Wall, letting in unqualified buyers is one of the biggest errors he sees FSBOs grappling with.
“I talk to FSBOs all the time, and it’s typically the same story,” he says. “Because they don’t have experience qualifying people before they come through their home, they let in unqualified buyers.”
The result? “They’re really beat up and tired from showing the property to tire kickers.” He says asking for pre-approval letters is key.
Here are key considerations when considering an offer on your Ohio home:
- Vet potential buyers by requiring a mortgage pre-approval letter or proof of funds.
- Require everything in writing.
- Remember you can counter-offer and negotiate.
- Look for a good real estate attorney. (See the next step!)
9. Close the sale — with professional help
Time to button up that deal.
Wall recommends every FSBO seller in Ohio hire an attorney to minimize risk and settle the legal documents. “If you don’t have some form of representation from a real estate agent, then you definitely need a real estate attorney to look over documents.”
He also notes that while attorneys aren’t required across the state, some jurisdictions do require attorneys for closing, so you’ll need to know the laws particular to your property’s location.
Real estate attorney fees can vary depending on location and how much help you want or need. In Ohio, real estate attorneys charge an average fee of $251 per hour — well worth it for professional guidance in closing one of life’s largest legal transactions.
“One of the most common mistakes a seller might make is talking too much about other activity they’ve had during showings. Whether it’s good or bad, you have to be very careful about what kind of dialogue you have with buyers. Be selective about what you say — or you could end up talking yourself out of a sale.”
FSBO mistakes to avoid in Ohio
On your FSBO journey, watch out for these major pitfalls:
- Missing out on the MLS.
- Forgetting or refusing to pay the buyer’s agent commission.
- Over- or under-pricing.
- Letting your house sit on the market too long. According to Wall, lack of activity is a common reason FSBO sellers come to him for help.
- Forgetting you have leverage. “Even in a shifting market, sellers still have all the leverage for now,” Walls says. So keep negotiating, and include contingencies that work for you, such as a replacement contingency to allow you to find a new home before you commit to selling yours.
- “One of the most common mistakes a seller might make is talking too much about other activity they’ve had during showings,” Breeckner says. “Whether it’s good or bad, you have to be very careful about what kind of dialogue you have with buyers. Be selective about what you say — or you could end up talking yourself out of a sale.”
Wall says his advice for FSBOs is to do some more research before they decide to go this route. “Understand that you’re not saving as much money as you think you are — interview good agents who’ve sold lots of properties in your area and really ask them questions.”
Ultimately, he says that while it might seem like a good way to save money, a FSBO sale can be rife with pitfalls. “It’s the biggest financial transaction in many people’s lives,” he adds. “It’s a massive undertaking — even with the help of a professional.”
- Use a Custom Yard Sign: Invest in a custom yard sign with your contact information. It’s more professional than a generic sign and can cost as little as $25 plus shipping.
- Leverage Social Media: Share your home listing on social media platforms, and encourage your friends to do the same. Social media can help you reach a wider audience.
- Hold an Open House: Plan and promote open house events. Use social media, update your MLS listing (if possible), place signs at nearby intersections, tidy up your home, and provide information sheets to visitors.
Remember, while selling your home as a FSBO can save you on agent commissions, effective marketing and presentation are key to attracting the right buyers and achieving the best possible sale price.
If you want to seek any help from Real Estate Professional, you can reach out to Ron Dahlhofer.