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How to Do ‘For Sale By Owner’ the Right Way

By U.S. News & World Report

For those hoping to maximize profits on a home sale, posting a “for sale by owner” sign in the yard is an appealing option. Real estate brokers typically take 5 to 6 percent of the sale price, which could mean as much $12,000 is lost to commissions in the sale of $200,000 house.

However, saving money isn’t the only reason people decide to sell on their own. “Selling your home can be a very time-consuming process, especially when you have a broker representing the sale,” says Allen Shayanfekr, CEO of real estate investing platform Sharestates. While a broker will do much of the work, Shayanfekr says owners will find they have to coordinate schedules with their agent and work on their timeline, which some people might find inconvenient and frustrating.

[See: 10 Secrets to Selling Your Home Faster.]

Regardless of whether you want to sell your own home to walk away with more money or retain more control over the sales process, you need to do it the right way. That may involve spending a little extra money upfront to maximize the sale price and minimize any headaches.

Have your property appraised. “In a low-inventory market like we’re seeing today, pricing your home correctly is crucial,” says Emile L’Eplattenier, real estate analyst for FitSmallBusiness.com. Normally, a real estate agent provides a comparative market analysis to price your home appropriately. This analysis will look at the features and condition of your house and compare it to other recent sales in the area to determine the appropriate asking price.

If you don’t have an agent, you could do your own market analysis using free online resources such as Zillow and HouseCanary or by scouring local tax records for recent sales data. Some homeowners ask local agents to provide a free comparative market analysis even though they have no intention of listing their home with that broker, but paying for an appraisal may be the best way to get an accurate value while bypassing the ethical questions associated with this strategy.

Get serious about your listing. Once you know the right price for your home, it’s time to create a listing. Homeowners have options that run the gamut from posting free ads on Facebook sales groups and Craigslist to setting up a dedicated website to market the property. For a flat fee of around $400 to $500, you can have your property listed in the multiple listing service, known as MLS. This will post your home where real estate agents can easily find it. Paying for MLS inclusion can expand your potential customer base, but be aware you’ll likely need to pay a 2 to 3 percent commission to the buyer’s agent if they have one.

However, even an MLS listing may not get much attention if the photos are dark and the rooms cluttered. Clearing out the excess and improving lighting can go a long way toward making your home attractive to buyers. Other options would be to pay for a professional photographer or use a service like roOomy, which allows people to virtually stage their house by uploading photos of rooms, erasing old or unsightly furniture and replacing it with images of more stylish décor.

Remove emotion from the process. Homeowners undoubtedly have their favorite property features. There may be aspects of the home they love and naturally would like to emphasize. However, buyers may have other priorities, and focusing only on the things you love could be off-putting.

“The right buyer might be someone who is looking to completely redesign the property and while meeting, they might make comments that would, in a different setting, offend your taste,” Shayanfekr says. For the sales process, you need to shift your perception from selling your home to selling a house.

[Read: Should You Sell Your Home to a Startup?]

Approach your house sale like a professional. Removing emotion is only the first step toward selling your house like a pro. You also need to be ready to put in the time to show the house, respond to emails and calls promptly and provide thorough information.

People also need to be strategic about their marketing and take care not to share too much about defects upfront. “The ‘warts and all’ approach can and will backfire on you if your home is not priced carefully,” L’Eplattenier says. “Skilled salespeople downplay negative aspects of the home until they get their clients physically [inside] to talk them through their options.”

Hire a real estate attorney. Between the documentation needed for the mortgage, title transfer and other legal requirements, the paperwork for home sales is extensive. “There are two common hurdles we see related to the [for sale by owner] process,” says Craig Evans, an executive with Ally Home Mortgage. “The first is the accuracy of the purchase agreement. The second is related to aligning expectations on both sides of the purchase transaction.”

Evans says both problems can be addressed by having a real estate attorney review paperwork. A handful of states, such as New York and Georgia, have laws requiring all sales, even those in which the buyer and seller have agents, be overseen by a real estate attorney. Zillow estimates the cost for one to be between $500 and $1,500.

Don’t rule out an agent. L’Eplattenier says selling a house isn’t for everyone. Not only does it require a significant investment of time and energy, it may result in a lower sale price. In 2016, the median price of a home sold with an agent or broker was $245,000, while the median price of properties sold by the owner was $185,000, according to the National Association of Realtors. There is no hard data on whether “for sale by owner” properties are sold below market value, but L’Eplattenier says the homes that do sell this way tend to go quickly, which is an indication that they are underpriced.

[See: 10 Ways Millennials Are Changing Homebuying.]

For those who want to use an agent but can’t stomach paying the full commission, a discount real estate broker may be a good choice. Redfin is one example of a company promising full service but charging only a 1.5 percent fee. However, keep in mind you’ll still need to pay the customary 2 to 3 percent to the buyer’s agent.

Going the “for sale by owner” route can result in more cash in your pocket, but you need to be smart about how you approach the sale. Spending time and money on your listing and an attorney can help ensure you get the best price possible and that the transaction goes smoothly.

More from U.S. News

9 Easy Ways to Boost Your Home’s Curb Appeal

10 Unorthodox Ways Your Real Estate Agent May Market Your Home

10 Tips to Sell Your Home Fast

How to Do ‘For Sale By Owner’ the Right Way originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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