How to Sell a House by Owner In Detroit

Saving on commission fees in real estate by selling a house independently may seem attractive. That’s why some determined homeowners opt for the “for sale by owner” (FSBO) route. However, going solo requires significant effort compared to collaborating with an agent. Mental, emotional, and financial readiness is necessary.

To sell a home as FSBO, the owner must establish a reasonable price, present the property attractively, capture appealing photographs, advertise it effectively, organize all necessary paperwork, verify the buyer’s financial status, assess and negotiate offers, engage legal assistance, and complete the transaction.

How to Sell a House by Owner in Detroit

Although the process of listing a property for sale mirrors that of working with a real estate agent, there’s a notable distinction as the owner assumes full responsibility for all tasks.
If you want to learn all the nitty-gritty on how to sell a house by owner, here’s a detailed guide to get you started.

In real estate, ‘for sale by owner’ (FSBO) means the homeowner sells their property without a listing or real estate agent’s assistance.

Here are some situations where selling a house by owner is the ideal choice. 

  • The real estate market in the area is already hot and there’s no need for an agent to get bids
  • The property already has a buyer— maybe a relative or a friend of the owner
  • The owner wants to sell the house as-is to cash home buyers
  • The owner doesn’t really have a timeline for the sale and just wants to see what offers the property will receive
What is For Sale By Owner in Detroit

Usually, homeowners opt to sell their property FSBO mainly to avoid agent fees. However, they often overlook the need to compensate the buyer’s agent. Studies reveal that FSBO properties have lower selling rates compared to those sold through agents. Making a profit from a FSBO sale largely depends on individual circumstances. In reality, just 7% of real estate transactions in 2020 were FSBO, as reported by the National Association of Realtors (NAR). This suggests that unless the seller is an agent or the market conditions are highly favorable, FSBO can be challenging.

If you plan to sell your house FSBO, that means you have to market like a real estate agent. How can you do this? You must have a plan. Here’s how to sell a house by owner like a real estate professional.

Set a Realistic Price

Setting a realistic and appealing price when you put your home for sale is probably the most important step in FSBO. While it is natural to aim for a high return of investment, overpricing the property will scare potential buyers away. This can cause the house to sit on the market for too long.
To get your home’s value, you actually have three options.

Set a Realistic Price in Detroit

CMA

Real estate agents use Comparative Market Analysis (CMA) when choosing a good listing price. Basically, this means checking out similar homes in your area and finding out how much they are sold for. Since you do not have an agent, you must do “comps” independently.

Here are a few things to keep in mind when running comps for FSBO homes:

  • Use properties that are sold in the past three months, so you get an updated price.
  • Ensure that the comparable homes are really similar to your property in terms of quality, size, and location.
  • Pull comps within your neighborhood or an area near your home.
  • Don’t use the asking price of comparable homes since this is only the reflection of how much the seller expects their home to sell.
Comparative Market Analysis in Detroit

Real Estate Valuation Sites

You can also use real estate valuation sites to check out recently sold properties. Just be cautious since not all websites present up-to-date prices and the properties may be situated in areas with a different real estate market status.

Home Appraisal

Although expensive, hiring a professional appraiser to give you an accurate listing price when you put your home for sale is well worth the money if you can’t determine a price on your own. They’ll visit your home and consider comps and market trends before suggesting a value.

Stage the House for Sale

Whether you’re selling a property by yourself or not, getting your property ready for sale is necessary. Giving your property some attention can increase its value significantly. Here’s how to prepare your property before the for sale by owner (FSBO) process.

Indoors

Although expensive, hiring a professional appraiser to give you an accurate listing price when you put your home for sale is well worth the money if you can’t determine a price on your own. They’ll visit your home and consider comps and market trends before suggesting a value.

Outdoors

  • Give the exterior walls a fresh coat of paint if necessary.
  • Fix landscaping for added curb appeal. This may involve adding a walkway, some shrubs, or a flowerbed. 
  • Deal with grass and weeds. Make sure to mow the lawn before showings or open houses.
  • Fix any gates or garage doors since old-looking or damaged ones lessen the curb appeal of your property.

Photograph the Property

Most homebuyers today look for FSBO properties on the internet. So, it’s crucial to promote your home online with top-notch photos. The quality of these images significantly affects the buyer’s choice.

Invest in skilled photographers, particularly those experienced in real estate photography. Though it may cost a bit, you’ll receive outstanding photos.

If hiring a professional isn’t feasible, consider DIY options when listing your property. But keep these tips in mind:

  • Use a great camera, preferably with a wide-angle lens.
  • Use proper lighting.
  • Take a lot of pictures so you’ll have options.
  • Never miss a room.
  • Experiment with different house angles.
Photograph the Property in Detroit

Market Your Home

Once your home is staged for listing and you have taken professional photos, it’s time to market. Here are some ways to effectively market your for sale by owner property.

Market Your Home In Detroit

Craft an Appealing Listing

To improve the attractiveness of your property, you should create a detailed listing description to go along with the appealing photos. Make sure it covers all the important features of the houses and includes relevant keywords.

Here are some other things to include when you market your home through a listing:

  • Basic information like the square footage of the property, the number of rooms, bathrooms, kitchen, etc.
  • The features that give the house an edge like a marble countertop or a fireplace feature.
  • Details about the neighborhood, like if there is a nearby school or hospital.

List on Your Local Multiple Listing Service (MLS)

Your local Multiple Listing Service (MLS), the largest database of for-sale houses, is the perfect flat fee service to list and market your home.  Although this isn’t free, you have a high chance of selling your home here since this is the buyers’ first option when searching for homes.

Put a Physical Sign Outside the Property

Some people don’t realize the importance of a yard sign when selling their home without an agent. They overlook that many potential buyers cruise through the area they fancy living in. Invest in a top-notch custom yard sign instead of handcrafting one. But first, make sure to consult the local MLS. Some MLS don’t permit FSBO signs while the property is listed.

Post on Social Media

Social media packs a punch, making it a must for selling houses. Share top-notch property photos and a thorough description on Facebook, Instagram, Twitter, and more. Rally your friends and family to spread the word by sharing your post.

Consider a Print Ad

Publishing an ad in the local newspaper may also land you some offers, that is if a lot of people still read print in your area. This isn’t cheap, so make sure that your ad will be read.

Tell Your Circle

Usually, homes sold by their owners (FSBO) go quickly since they advertise them among their family, coworkers, and buddies. Even if your close group isn’t interested, they may know someone searching for a home.

Hold Open Houses

During an open house, potential buyers can view your property. To host one when selling your own home, follow these steps:

  • Post the details on social media.
  • Add the open house details to your DIY for sale by owner (FSBO) listing or to the flat fee MLS listing.
  • Place an open house sign in your yard or at nearby intersections.

To make open houses work well, your property needs to be in top shape. This means fixing, tidying, and setting it up nicely.

When visitors visit your property without an agent, give them a fact sheet with info about your property. And if possible, get their contact info to keep in touch.

Manage Showings

If you’ve effectively marketed your home, get ready for the busiest part of selling without an agent—handling showings! This is when many sellers reconsider doing it alone due to how showings affect their schedules.

To make showings successful, respond to buyers’ questions promptly. Also, set specific end times to accommodate multiple showings in a day. This creates a sense of urgency among buyers, making them feel like there’s competition for the property.

Furthermore, ensure all your valuable items are locked away. Since your home will be open to strangers, it’s essential to take precautions.

Here are some more tips for landing a buyer during showings:

  • Make sure that the house is really in great condition.
  • When the buyers enter, share some highlights of the property.
  • Don’t hover around the buyer all the time. Let them explore freely.
  • Answer the buyer’s questions in detail.
  • Follow up with the buyer.

Most buyers have their own real estate agents. If this is the case, the agent will typically point out everything they have observed around the house to their client.

Manage Showings in Detroit

Prepare All The Documents

When collaborating with a real estate agent, they’ll manage the majority of paperwork, a task also applicable to investors and cash buyers. However, as a homeowner selling independently, you must assemble various documents like the sales agreement, property survey, and title.

The paperwork required depends on your stage in the home-selling process. Specific documents are necessary before listing, at launch, during negotiations, prior to closing, and at the actual closing.

We have listed all this paperwork in a later part of this article, so be sure to check it out.

Prepare All The Documents in Detroit

Evaluate the Buyer’s Financials and Negotiate Offers

After receiving a promising offer while selling FSBO, ensure the potential buyer’s financial capability for your listed property. Request proof of funds or a mortgage pre-approval letter, with preference for the latter as it reveals the approved borrowing limit. In case of conditional loan approval, clarify the necessary conditions for final approval. Upon resolution, engage in negotiation with the buyer, presenting a counteroffer if the initial offer falls short.

Find a Real Estate Attorney and Close the Sale

When it’s time to finalize the home deal, either seal it at a title company or hire a real estate lawyer to assist with the paperwork. Having a lawyer’s guidance can reduce the risk in the real estate transaction, particularly if you’re unfamiliar with the legal aspects of selling a house independently.

The regulations governing home sales differ from one state to another—some mandate title companies, while others necessitate lawyers. Make sure to verify the regulations in your state before opting for FSBO (For Sale By Owner).

The process of selling for sale by owner (FSBO) can be challenging, and if you are inexperienced, there is a high chance of making some mistakes. Luckily, through a bit of research, you can avoid these pitfalls.

Here are the 10 most common mistakes made by homeowners when putting their home for sale by owner:

  1. Letting the house sit on the market for too long: If your house sits on the market for longer than the average time on market, potential buyers will assume it is in bad condition or something is wrong with it.
  2. Not listing your home on the MLS: A flat fee MLS service is the best place to list when selling a house by owner because it is the first platform buyers’ agents look when searching for homes for sale. Not posting your home on an MLS could mean missed opportunities to sell your house.
  3. Under- and over-pricing: Over-pricing is still the top reason why most houses don’t sell. If you want your property to attract buyers, set a realistic listing price. Also, you want to avoid underpricing your house to sell it quickly. Often buyers will wonder what’s wrong with the property if you price too low.
  4. Being too greedy: If you were offered close to full price, it’s usually best to accept unless your house has a lot of potential buyers. Often, thinking that you can get more if you wait leads to not selling your home at all.
  5. Selling during winter: Winter is a slow time for the real estate market because fewer buyers are searching for homes. With the weather being cold and a lot of holidays happening, your property may be listed for longer than average.
  6. Using low-quality photos: When you decide to sell an FSBO house, using poor-quality photos for your home listing can mean two things to potential buyers— you don’t really care much about the property, or the house is not that nice. Most successful sellers hire a professional photographer to avoid this mistake.
  7. Selling as-is: Not cleaning or fixing the house is one of the biggest mistakes of FSBO sellers. It would mean a lesser sale price or the property staying on the market longer.
  8. Failing to stage the home: Staging a home is expensive, but can attract buyers in both the listing pictures and in person. You don’t need to stage until the home is sold– you could stage for the only the first week if money is tight.
  9. Not accommodating potential buyers: Since you are selling your house independently, you have to make room for viewings on your schedule. Failing to do so because it can be an inconvenience to you could mean missed opportunities.
  10. Closing with an unqualified buyer: Not asking for proof of financials and signing with a buyer right away is very risky. Once they’ve signed the contract, they have an agreed number of days to get the funds and close. However, if a buyer fails to get approved by their lender, the closing may fall through and delay your sale by several weeks if not months.

Although many real estate experts disapprove of selling a house without a realtor, doing so can have advantages, especially if the seller knows what they’re doing and the housing market is thriving in the area. Here, we’ll delve into the perks and gains of selling your own home.

Avoid Paying Agent Commission Fees

Avoiding agent commission is the main reason why many home owners choose to sell for sale by owner. Closing costs are already expensive and agent fees are added on top. The average commission fee of a listing agent is 6%, but this can be avoided when the owner sells on his own.

Full Control of the Listing

Not working with a listing agent means having full control of the listing when sellers put their homes for sale. This means deciding on the listing price, marketing strategy, and listing details.

Flexible Showing Schedule

Managing private viewings for FSBO properties grants sellers flexibility, as they control the schedule. Despite numerous buyer inquiries, FSBO sellers remain prepared and in control during house tours.

Quicker Sale

Since there is no middleman when selling a home by owner, there can be fewer complications. The sale can be closed faster and both buyers and sellers can move on to their new lives. In fact, according to NAR, 73% of FSBO homes are sold in less than two weeks.

As with any huge real estate transaction, FSBO has pros and cons. Depending on the situation, the cons of selling FSBO may outweigh the benefits. To decide if you should really push through, review these cons of selling your house on your own.

Difficulty in Setting the Price

Real estate agents understand how to establish an attractive yet reasonable listing price. This can pose a challenge when homeowners opt to sell their property themselves, as emotions may sway the pricing unfavorably.
Homeowners may err by setting an overly ambitious sales price, deterring potential buyers.

Lower Sales Price

When homeowners choose to sell their property without hiring a real estate agent, they may dodge agent fees, but they could end up with a smaller profit. Selling FSBO often means lacking expertise in handling offers and negotiations, unlike professionals in the field. Additionally, it’s typical for the seller to cover the buyer’s agent costs at closing, which reduces the final sale amount.

Stressful Selling Process

The process of selling a house can be overwhelming especially if there are issues with the title company and buyer financing. Going FSBO and selling without an agent would mean that sellers have to deal with all these headaches by themselves.

Expensive Marketing

Real estate agents typically have access to MLS and connections to reach out to when they put a home on the market. However, most homeowners selling without an agent don’t have these resources. It’s important for FSBO sellers to allocate funds for marketing their properties independently.

Costs To Sell A Home By Owner

While opting to sell your property without an agent can trim down commission costs, it doesn’t imply that you won’t incur expenses in the process. When you tally up these costs, you may grasp the financial strain that selling by owner can entail.

Costs of selling your home for sale by owner

  • Survey and Home Inspection: When selling, homeowners would need to present the exact lot area of the property to the buyer. Thus, sellers would have to pay for a land survey. Similarly, home sellers would need someone to inspect their home so they know what to repair or improve before listing. Survey and home inspection can incur $200 to $400.
  • Home Repairs: If the home inspector discovers major issues in the house like bad plumbing or damaged roofing, the lender required repairs will set the sellers back financially. On average, this can cost $1,000 to $10,000 depending on how bad the problem is.
  • Appraisal: To decide on a realistic price for a property, home sellers may need to hire a professional appraiser. The appraiser would visit the home and give the seller its fair market value based on their inspection, comps on recently sold houses, and other factors. The fee of most appraisers is between $350 to $400.
  • Photography: Professional photos are necessary to complete a listing and market a home effectively. If the sellers do not have great photography skills, they would need to hire a professional photographer which can cost around $110 to $300.
  • Marketing: Marketing a property is not only labor-intensive but also financially demanding. Expect to pay anywhere from $50 to $2,000 for flat fee listings, signages, print ads, social media ads, etc. Of course, this depends on how much the sellers need to market their property.
  • Real Estate Attorney/Sales Contract: Sellers who need guidance when closing a home deal would find themselves hiring a real estate attorney. This legal professional can also draft the sales contract when one chooses to sell by owner. Usually, their rate is per hour, averaging between $150 and $350.
  • Home Warranty: Although a home warranty can be expensive, it will offer the buyer peace of mind. Home warranties are required in most states and they often cover septic, roofing, etc. Sellers should expect to pay $300 to $600 for a home warranty.
  • Closing Costs: Closing costs include an assortment of fees such as title insurance, homeowner fees, transfer tax, escrow fee, etc. These costs may vary, but typically, this is 8% to 10% of the home’s sales price. If the buyer has an agent, the seller typically pays that fee, which is 2.5 to 3 percent. If the seller wants to skip all of these expenses and fees, contacting a cash home buyer is a great option because they buy homes as-is and cover the closing costs.

Paperwork For Selling A House By Owner

Since selling a house is a big real estate deal, be ready for tons of paperwork. Here, you’ll get the lowdown on all the legal papers you need when selling your own place, starting from before you even list it to when you seal the deal. We suggest teaming up with a nearby lawyer in your area to make sure you’ve got all the right state-specific real estate forms.

Before Listing

Generally, the documents you need before the listing are those that can give you information about your house and the upgrades you’ve made since you moved in.

  • The Title: A house title is a document that lists all the legal owners of the property. Most buyers ask for this to ensure that there are no other legal claims against the house.
  • Original Sales Contract: The original sales contract proves the current and previous ownership of the house. It details all the disclosures regarding the property before the original sale.
  • Property Survey: Also called the plat survey, this details the exact boundaries of the property. If in case you do not have a copy, the buyer would have to get a copy from your local housing authority.
  • Professional Appraisal: You need to provide the original professional appraisal of the property or any subsequent appraisals in case of house improvements or refinancing.
  • Floor Plan or Blueprint: To help with the inspection, preparing the blueprint or floor plan is necessary. This also allows the buyer to see the changes made to the property since it was built.
  • Homeowners Insurance Record: The Homeowners Insurance Record proves that the house is insured and shows the claims since the house was bought. This is needed for added transparency and the protection of both buyers and FSBO sellers.
  • Mortgage Statement: You’ll need this when you sell your house before paying the whole mortgage. Aside from this, you may also need to provide a statement of the payoff amount. 
  • Records of Repair and Maintenance: These records may include receipts of major repairs, appliance warranties, records of annual upkeep like gutter cleaning and painting, and utility maps of gas and electrical lines.
  • Homeowners Association (HOA) Documents: If your home is a townhouse or condominium, you would need to provide HOA documents. This will inform the buyer about some fees, rules and regulations, or even voting privileges.
  • Manuals and Warranties: If you’re selling the house with all the appliances in it, you should give all the manuals and warranties to the buyer. This is especially necessary for large items.
  • Capital Improvement Receipts Plus Permits: These documents detail and validate the improvements or upgrades you made to the property. 
  • Utility Bills: Some buyers want to see the cost of running the house so they can set an operating budget. Provide at least a year of bills so expense increases are seen. 

While Listed

When you decide to sell by owner, these documents are needed in listing your house on the real estate market.

  • Comparative Market Analysis (CMA): CMA compares sold homes in your area that are similar to yours. This will help you set a good and realistic price.
  • Net Sheet: This is a worksheet that computes how much you’ll pocket for each offer when deductions for taxes, remaining mortgage, and other fees are made.
  • Pre-inspection Report: This document will give you a checklist of what you need to repair or update in the house before listing.
  • Prelim Report: This report summarizes existing liens, taxes owed, and all other financial claims against the house.
  • Mandatory Disclosures: This document lists all the hazards that affect the house such as environmental issues, neighborhood nuisances, defects in heating, etc.

When There is an Offer

The following documents are essential when negotiating sales prices. Note that the negotiation begins when you receive your first offer.

  • Offer and Counteroffer Forms: These forms are crucial to documenting negotiations. The purchase offer form is submitted by the buyer and if the seller wants to make a counteroffer, he would need to use a separate form.
  • Final Purchase and Sale Agreement: When the seller and the buyer already agreed on a price, these legal documents are written. Details such as the sale price, terms, and closing date are included in these documents.

Before Closing

The documents below are all part of the sale. Mostly, they detail the current state of the house.

  • Home Appraisal Report: This comprehensive report shows the considerations before arriving at the sale price.
  • Home Inspection Report: This detailed report should also be shown to the buyers so they’ll be aware of any issues with the house. Often, buyers use this to negotiate the sale price, especially if the property is in a bad condition.

Closing

The majority of these documents ensure that the right dollars go to the right people when selling a home.

  • The Deed: This is a legal document that transfers ownership of the property from the FSBO seller to the buyer. Both parties are identified in the deed and the property is thoroughly described.
  • The Closing Statement: This shows the closing costs and other fees related to the home sale. This is usually done by a real estate attorney in for sale by owner.
  • Recent Tax Statement: This is provided to calculate how much outstanding tax needs to be paid during closing. This will also give the buyer an idea of how much tax they will owe once they own the property.
  • Exclusion v. 1099-S Tax Form: This form is required in reporting the sale of the house. This is essential whether or not your house qualifies for tax exclusion.

Should You Sell A Home Without A Realtor?

Deciding to sell a house without a real estate agent depends on many things. If you’re lucky enough to have a friend or family member interested in buying your property, then selling it yourself makes sense.

However, if the property is very old, requires extensive repairs, or the local real estate market isn’t very active, it’s better to work with an agent or a cash buyer.

Even though selling on your own may seem appealing because you won’t have to pay agent fees, it can also be stressful. It’s important to carefully consider the advantages and disadvantages before making a decision.

Should You Sell A Home Without A Realtor in Detroit

Since most buyers use an agent, even if you sell your property yourself, you may still end up paying some commission.

We only recommend selling without an agent and choosing the for sale by owner route if you have a good understanding of the real estate industry and if you’re in a competitive market with many potential buyers.

If you don’t have the time, skills, and energy to take the for sale by owner (FSBO) path, there are 3 alternatives that you can choose instead. 

Asking the Help of a Real Estate Agent

In real estate, partnering with an agent can ease the process of selling your home. Many documents are involved, and if it’s not your forte, going FSBO could be risky.

Hiring an agent may lead to a higher home sale. Their negotiation expertise often results in a better price compared to DIY attempts.

An agent’s impartiality is beneficial. They can set a fair asking price and handle negotiations objectively, unlike selling on your own.

Requesting an Offer from an iBuyer

iBuyers or instant buyers are tech-driven companies that can determine your home’s value through an automated valuation model (AVM) and give you an offer within 48 hours. 

This is for you if you want to sell your home fast and you value convenience. There are several types of iBuying that you can choose and they are the following:

  • Traditional iBuying: Traditional iBuying means asking for an offer from an iBuying company and receiving cash payment in a matter of days or weeks.
  • Trade-in: This works for people who want to buy another property while selling a home. The iBuying company will make a cash offer on the house you’re eyeing and when you move in, they’ll sell your old house to pay for the costs of your new house.
  • Bridge Financing: Bridge financing works for homeowners who want to maximize their profit. Similar to trade-in, the iBuyer would make a cash offer on the house you want and after you move in, they will lease it to you. You then proceed to selling your house in the traditional real estate market to earn more from it. If it isn’t sold in a given time, the iBuyer will purchase it at a pre-agreed sale price.

Getting an Offer from a Cash Home Buyer

Cash home buyers are exactly that— they buy houses for cash! This option is highly recommended if you want to sell an inheritance or a distressed property.

Selling your home to a cash home buyer means there is no need to prepare your home or make repairs. You can also expect a fast closing because they do not work with mortgage lenders. Often, they also cover closing costs!

Cash home buyers will buy any property including FSBO homes with odd layouts. Usually, these FSBO homes sit on the market for too long because they turn off retail buyers. But with a cash home buyer, the process is fast and you can skip all the stress of marketing an odd home.

How To Sell A House By Owner in Detroit

Selling a property alone can be tough and stressful. Before you go it alone, carefully consider the advantages and disadvantages many times. If you’re ready to sell or your property is already listed, have patience. Don’t accept the initial offer if it’s too low or decline a good offer due to greed. You can also sell quickly to a cash buyer if you need immediate funds! At We Buy Houses in Metro Detroit, we’ll simplify your For Sale By Owner process by providing a fair offer and handling all expenses for you! Reach out to us at (313) 710-7744 for more information.

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We Buy Houses AS-IS In Detroit

Our fast home sale service gives you advantages that pay off in profits to you. We are a local company that buys houses and land as professional cash home buyers, not agents or brokers. You can sell your house for cash in Detroit. Our goal is to serve homeowners with a simple selling experience and provides a financial solution for sellers. You can start to sell your house in Detroit and surrounding areas by calling us or filling in the online form. Within days, you can schedule a closing date and get cash for your house.

The Easiest Way To Sell Your House Fast In Detroit

You’re in the driver’s seat when you accept our cash offer for your house. We make the process simple, fast, and easy to follow when working with us. You have no obligation to accept our cash offer for your home when contacting us for a fair cash offer for your home. No matter the reason you want to sell your house, we want to buy your home as is. Remember that you get many benefits that include no real estate agent commissions, no cleaning, no improvements, and no stress. Our cash offer for your as-is house assures you of fast cash payment at closing with a reputable Title company. You can count on our company to give you a fair cash offer for your home! If you’re still thinking, “I need to sell my house fast”, calling us could be your best decision all day. 🙂

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Gagan Saini

Author: Saini

My name is Saini, and I founded the We Buy Houses in Metro Detroit team with years of experience in the real estate industry. I have assisted numerous sellers in selling their homes quickly, “AS-IS”, and for a fair price.

He’s been featured in multiple publications including Yahoo Finance, GoBankingRates, LegalZoom, The Mortgage Report, Apartment Therapy, US News and World Report, and SuperMoney among others.

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