Selling Your Home Solo

It's not a go-go market for house sellers any more; times have changed. The Early Show financial advisor Ray Martin knows how you can improve your chances of making a profit on your home. Here's his report:

In many areas, home values are down, mortgage rates are up, and the supply of homes being listed for sale is hitting the highest levels seen in years.

If that wasn't enough, there's the commission you'll have to fork over to a real estate broker who appears to do nothing more than put your home on the Multiple Listing Service and when another agent sells your home, the listing agent collects half of the commission.

As home values continue to soften from high levels, home sellers will need to make every penny they can.

The cost of a broker's commission, which traditionally has been six percent of the selling price, is increasingly being challenged. And with home prices falling, there is less equity left over to pay that commission.

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For these reasons, For Sale By Owner - pronounced "fizbo" - is one option that seems to be gaining the attention of more home sellers.

It can be a good strategy when your home is in a hot location, at a price that is affordable to a lot of potential buyers, or where a home like yours is in short supply.

There are conflicting numbers on how many homeowners are selling their homes themselves, and some of the information reported is interesting. The National Association of Realtors, or NAR (not exactly an unbiased source), reported in a 2006 study that 13 percent of sellers conducted a transaction without the assistance of a real estate professional in 2005. According to REAL Trends, in 2006, 20 percent of sellers sold their homes themselves.

Know What The Buyers Are Doing

It's important to keep current with the trends and what works to sell a house. The National Association of Realtors Profile of Home Buyers and Sellers can be of some help to home sellers.

Many buyers go online to search for a home. According to the report, the use of the Internet to search for a home to buy has risen dramatically over the past few years, and now more than 77 percent of buyers reported using the Internet in their search.

According to the NAR report, here's how buyers learned about the home they ended up buying:

36 percent: Buyer's real estate agent
24 percent: Internet search
15 percent: Yard signs

Finally, a typical buyer visited nine homes in an eight-week search and bought a home an average of 12 miles from his or her previous residence.

This means it is vital to get your home listed on the Internet and to draw the attention of a large number of real estate agents in your local area.

There are many services where you can get your house listed on your local area Multiple Listing Service.

But while every home seller should try to save on commissions, being your own real estate broker is not for everyone. There are some potential pitfalls.

Set The Right Price

After getting a listing on the MLS, this continues to be the single most important factor in successfully selling a house. The housing market is constantly changing and you really need to have a good feel for it if you want to sell your home.

Not only is a home the biggest purchase most people make, it's also the biggest asset people have to sell; setting at the wrong price can cost you plenty. You don't want to leave money on the table by setting a price that's too low, and you don't want to scare buyers away by asking too much.

When setting the listing price for your house, use round numbers, in increments of $5,000. According to Kerwin Holloway, a broker at Reece & Nichols, buyers who use the Internet typically will search in increments of $5,000. So a listing at a price of $250,000 will turn up in more searches than a listing at $249,900.