For those who don’t know, FSBO = For Sale By Owner. I’ve accomplished a lot in life by simply looking at who else is doing it and thinking, “if they can, I know I can”. And if that’s not enough encouragement, I like Charles Morse’s maxim, “What one man can do, another man can do.” I’m not talking about most FSBO sellers but about real estate agents, because I tend to professionalize the things I do (“if it’s worth doing, it’s worth doing as work”), and treat it like a business. Instead of just doing things, in other words, I prefer to do them like they’re my profession. Everyone makes it out to be such a big deal – selling a house. Well, it is a big deal in terms of the diversity of things actually required – some legal savvy, some marketing savvy, some mechanical savvy, and some financial savvy, but it’s not like designing a rocket. The big stuff isn’t the actually selling – it’s the remodel and the moving (sifting and donating or selling, then storing your stuff). The selling part is mainly about being rational and treating it like a business.
For me, among the biggest parts were supervising contractors and also the garage sales, but not the actual sales process. In fact, there’s a whole cottage industry that exists to simultaneously warn you against selling your own home and yet get paid commissions off the fact that home sellers typically pay out the buyer’s Realtor commission. In other words, you can readily pick up books that coach real estate agents on how to make big money off FSBOs, even as they’re warning you not to do a FSBO. Realtors are just in business, like the rest of us. They’re in sales, and if there’s money on the table, expect them to take it . I ran my garage sales the same way. I wanted whatever you had in your pocketses. A lot of Realtors even try to hit you for two commissions saying they’re really “working for two people” (so you end up paying the same as if you were represented by an agent and weren’t a FSBO). That line (and that concept) just doesn’t work on me. The whole point of doing a FSBO is that the homeowner does the marketing, preparation of contracts, etc. Who’s paying me for *my* labor, if I give an agent two full commissions? Not going to happen. I didn’t even offer full commission to the buyer’s agent. I turned it around. *I* am the one doing twice the work. 🙂 I offered 2%, not 3 (or the new attempt to push the tip up to 3.5) or, alternately, a discount on the sales price if the buyer didn’t bring an agent.
Like anything else, if a pro can do it, there’s a DIY (do it yourself) approach – from rocket building to selling or just about anything. Besides, I figured a marketing consultant who can’t market his own house, and a sales trainer who can’t sell it, isn’t up to snuff. What’s all that experience good for, if not for things like this? So I boned up on the process and requirements, built a killer property web site, hit the appropriate networks, and prepared the contract and disclosures as well as an explanation of the negotiation/contract/mortgage/closing process for the buyers. I treated it like a business, same as the garage sales which, incidentally, I ran just like a store – re-arranging inventory immediately after purchases, doing dynamic pricing, meet, greet, and salesmanship, and thorough pre-sale marketing – to great success.
To be fair, I had purchased a house in a hot neighborhood with climbing values, lots of surrounding development that constantly increased demand (Whole Foods and similar desirable places, proximity to several of the city’s biggest and most up and coming employers, with their corporate campuses, and some of the most coveted Roman Catholic schools, as well as close proximity to multiple arts and theatre districts, fashionable nightlife districts, and the Asian district – my Chinatown). So yes, I had an edge. Houses in my neighborhood go very quickly. It’s safe, quiet, there are strollers after dark, and it has multiple freeway access within a stone’s throw, so you can get anywhere relatively quickly. These reasons and potentials are the reason I picked the neighborhood in the first place. But of course, I had to market those facts (which I did, educating the buyers who weren’t familiar with the enclave) as well as highlighting the upgrades and remodel I had done.
I had a lot of people thinking I was just blowing smoke when I wasn’t gone a month or two after mentioning it. That time wasn’t idle. I was earning money, working like self-employed people do, but also overhauling or replacing just about everything in the house. New roof, siding, gutters, screens, picture window, central heat and air, water heater, front doors, texture and paint, granite, stainless, tile, etc. And I was also doing a life overhaul as well – life hacking in numerous venues. For one thing, I reduced my possessions to a) only enough to fit in one big room and b) nothing I can’t walk away from and be fine. I went virtual on everything – phones, banks, mail, anything that would tie us to only one location.
I had pegged Spring to pull the trigger on the sale, with a target of being on the market in early April. With the work on the house done, everything virtualized, and possessions down to an all time minimum, I looked around and there was nothing stopping me. It was my people’s Holy Week (which is generally a week off from Protestants/Roman Catholics), and I generally don’t take on new projects during that time. At the outset, I had built the property site, created a listing, but was waiting to hit the MLS (through a listing-only agent) until the culmination of the week. But when I saved the listing, it sent it out over some of the standard networks automatically, and I started getting calls within 5 hours of it hitting.
What ended up happening was I didn’t even have time to post to the MLS or put a sign in the lawn. The first family that contacted us contracted for the house. No agent for either party, I negotiated a reasonable price as honorable people on both sides, stayed in frequent contact throughout the process, and closed in thirty days. I had people and agents both calling (contrary to the common myth that no agents will show FSBOs to their clients), frustrated, because I didn’t even post a sign, or because they didn’t get a chance, telling us to let them know if it didn’t close. I heard of at least one agent telling his client it was a “fake” listing (she came to see the house anyway), and I built up some Realtor and purchaser contacts, but the buyers made their financing, the close went fairly smoothly, and I was out of the place before ‘the morning of’, in time for the final walkthrough.
Among the principles I decided to follow is going forward regardless of who says what until there’s a contract, and planning rapid redeployment in case buyer financing fails or it doesn’t close. I didn’t have to hedge, it turned out, but it was not only the correct rational approach, it was emotionally better too. One of the most interesting dilemmas I faced is when to sell the staging furniture. I kept a lot of inherited stuff I didn’t want or didn’t use, to stage the house. If you contract to close in 30 days, and the buyer’s don’t make financing, you might not find out until a week before closing. Meanwhile, if you’ve sold the staging furniture, you have to essentially buy replacements or re-list the house improperly staged and effectively empty. It’s a risk. Renting furniture from a traditional furniture rental place is no good, because the rental services want 30 days notice to pick up (yeah, it’s in the fine print) so you can’t ditch the stuff in a week, necessarily, and there are other gotchas in their contracts. There are professional staging companies, but it’s not a DIY budget item – it’s pricey. As it was, I sold all the small stuff right away – and then let the big stuff go before I had lender confirmation, because there was a constellation of buyers ready to pay and you act when there’s enough cash being waved around. If there’s anything else I took away, I think it’s that rationality, honesty, and honor are premium virtues in such a transaction, and buyers value it highly. I used the best stuff I had from being an independent professional and working on small projects, and it was quite rewarding.
This is, like most of the outcomes of my experiments, kind of an “I told you so” for some people. For those who said, “it’s harder than you think”, I’m guessing you don’t usually know what I think. For those who said, “you’d better not try it”, you should have known I try most things, in one way or another. To be fair, I have a significant amount of real estate background – I’m eclectic – I have background in a whole lot of things – I accumulate backgrounds much like I accumulate reading. Charles Morse, again, one of my heroes. But I didn’t use much knowledge that isn’t available easily on the web or in a book and available to anyone. In fact, I acquired some it partly because I knew I’d sell one day, aside from the business and professional reasons – I filed away mentally what I thought I might need.
For me, the life experiments I undertake have multiple purposes. The most important one is to understand what is real and what is possible, rather than simply accept what I’m told or go along with what I’m told I should do. They’re also important, though, because they reaffirm that I can continue to both govern myself and successfully operate within the world, using resourcefulness, creativity, rational thought and planning, and a degree of the expected (for those of us who have come to expect it) serendipity that I take to be the pillar of cloud in the desert, the providence that rains manna from the sky – all of this while remaining decidedly experimental – that is to say exceeding mere normalcy. This particular experiment rolls a lot of things into one. Sales and marketing, I mentioned. A lot of handy work that was self-taught, which I mentioned in other experiments, ranging from electrical to plumbing to tile work to roofing (yes, I did some initial roofing myself), to floor repair and more.
I remember being told as a kid I’d never be the guy that changes his own oil. I used to, but I’ve been too busy mixing grout and thinset or running security circuits. This experiment also rolls in other experiments at lifestyle change (mobility), ethics (reducing footprint), and in lifehacking in general. People sell their own homes every day – I’m not trying to make too big a deal out of it – but when you grew up hearing that there’s some general deficiency in yourself, so that you can’t do what others can do (the exact contradiction to Morse’s maxim), so that you’ll always be dependent on the good graces of others, or that if you do succeed at something it’s a product of accident or luck and not because you intended it or made smart decisions that you expect to have at least some kind of contributory effect even if you can’t yet see what it will be – when your rational and emotional efficacy has been systematically challenged, then every independent act is restorative. Every experiment, pass or fail, is a reaffirmation that you are capable of doing the unexpected, the un-dictated, and will come out better consistently and in general than if you went along. Your independence becomes then a sign of your strength – not of foolishness or immaturity. Even the accidents are often a signal that you’re going the right way. No one ever conducted an experiment who didn’t have the balls to fail at a few or spend a bit of something valuable to get an answer.
In the end, I decided to sell one week, sold the next, closed in 30, and were gone like the wind, with the help of some enthusiastic, willing, and decidedly sane buyers. Mission accomplished. While we’re not fans, anymore, of home ownership, and I never wish to own again [it isn’t because I couldn’t make my mortgage payment (I had a low, fixed rate), or because I can’t take care of myself financially (I was doing better than ever at the time), or because of some ‘failure’ – it’s because a house is a financially fruit loop way to invest capital if that’s your goal, and if you’re honest about all the math, and it radically alters lifestyle in ways I find incredibly culturally prohibitive, restrictive, and stifling], the house sale itself was a stunning success. I was more or less moved out by the time anyone realized I was gone (I like that). Suddenly the neighbors had new neighbors; I just evaporated. My footprint wasn’t there anymore. There was never even a moving van. Just a rented minivan for a day. And as a reaffirmation of the potential of social media networks, technology and the internet, for marketing, it was also a pretty cool event.
Experiment: Success! Here are some photos from the experience.