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For Sale by Owner Guide

Guide for Sellers

Sell all Seller Guide topics

Prepare Your Home for Sale

Do You Need a Pre-Sale Inspection?

Before you ready your home for market, it's a good idea to really get to know it by obtaining a professional home inspection. A general home inspection is a lot like taking a car to a mechanic to check it out before you drive it off the lot. With a house, the investment is much larger, making the inspection even more prudent. The buyer is generally obligated to contract most inspections so s/he knows the home's physical condition before putting down a deposit and signing off on a commitment to buy.

The seller, however, also has a stake in knowing the home's condition.

In many states, laws dictate that you disclose known defects that could affect the value or salability of your home. There are rules for disclosing the general condition of the home as well as seismic hazards, geological hazards, environmental hazards (such as lead e.g., asbestos and radon), structural pest damage, and a host of others.

Certainly, what you don't know can't make you liable, but it can hurt you. Why take a chance that the deal will fall through because you or the buyer discovers something you overlooked?

A general home inspection will let you know well in advance what the buyer may attempt to negotiate, and it will help you spot items inside and outside that need your attention in your effort to make your home as marketable as possible in a competitive market.

As the seller, you won't be surprised by a buyer's inspection that could turn up thousands of dollars of necessary repairs - and at the very least delay the sale. If the report is clean, on the other hand, it can be a positive sales tool to reassure prospective buyers of the home's condition. Some real estate experts say the $200 to $500 or so spent for a general home inspection every once in a while is money well invested to keep you on top of maintenance that your untrained eye may not notice. Local laws, your home's condition, location, type, age and other factors will dictate what additional inspections are in order.

Home Improvement


Look at your home as a buyer would. Be critical!


Make a list of everything that will convey (stay) with the house (appliances, etc). If chandeliers or other attached objects will not convey, either put a 'does not convey' tag on them or better yet, remove them and replace them with new - before you show the house.

To get top dollar and sell quickly, you must put your house in the best possible shape. Generally, this includes some painting, landscaping, deep cleaning and small repairs. A major improvement in the look of your property can frequently be accomplished with minimal cost and effort. Think twice about making extensive or expensive repairs unless absolutely necessary since you won’t usually get the investment back in your sales price.

The minimum you should do:

  • Trim bushes, plant annuals, keep grass green and manicured - in Winter, de-ice the sidewalks and driveway.
  • Unclutter the house - remove all extra furniture and clutter. All rooms and closets should look roomy and orderly.
  • Clean relentlessly - especially the kitchen and bathrooms.
  • Have the carpets cleaned.
  • Repair small items such as leaky faucets, running toilets and torn screens.

The Exterior

"Curb appeal," the impression the exterior of your home conveys, is the first thing a prospective buyer sees.

Studies show that 50 percent of purchase decisions are actually made during the first 60 seconds, while the buyer is coming up the walk. Consider having a few real estate salespeople come over before your open house to make some expert suggestions about improving your home's curb appeal. If you've got to scrimp somewhere on getting your home ready for market, pinch pennies inside. You want to be sure a buyer's first impression compels him or her to take a further look inside.

The Interior

The inspections are in and you've spruced up the outside, but you can't open the doors for an open house until you've put what's inside your home in order.

It's time to take care of all deferred maintenance and repairs, you must organize with military precision and render your home spotless.

Remember, when you conduct your open house, not only will you compete with homes on the resale market, you'll also be up against homes in new home communities.

There are many variables to consider when selling your home, but with just a little bit of thought and planning you can have a successful and financially beneficial sale.

Price Your Home

Pricing your home properly is possibly the most important thing you can do to sell it quickly and easily. Overpricing is one of the most frequent reasons by owner sellers fail. In fact, many times when a by owner seller gives up and lists their house with a real estate agent, the house sells because the agent convinces the seller to reduce the price.

Since you will not have a real estate agent involved to provide this "reality check" for you, you must perform the check yourself. Be realistic and do your homework. Keep in mind one of the reasons buyers are interested in by owner properties is because they think they will share in the savings of the real estate commission. If you are not offering to share any of the savings, it is possible that buyers will simply move on to traditionally listed properties. Pricing a house is one of the areas in by owner selling where spending a little money up front to get the necessary information is very helpful.


There are many tools and methods to help you price your home:

  • The common means of valuing real estate for all appraisers, lenders and real estate agents is to base the value on comparables, also called comps. The best comps are similar homes that have sold in the immediate area within the past six months. Once you receive the comps, you will have to assess the relative quality of the location, condition and features of your house as compared to the comps. You should be able to get a good sense of this from the comp report. For instance, if a 3 bedroom home right around the corner sold for $5,000 less than a nearby 4 bedroom, the approximate value of the extra bedroom is $5,000.
  • After you have a comp report that shows what has sold in your neighborhood, spend a couple weekends visiting open houses in your area. Go to neighborhoods that are very much like yours, with houses of similar style and size and approximate price range. Although appraisals are based on SOLD comps, it is useful to see what is for sale now to get a sense of the current real estate market. For instance, if listing prices are lower than what you think your home is worth, that is an indication that house prices may be falling in your area. Conversely, if listing prices are higher than the sold comps indicate, that is an indication of prices moving upward.
  • Have a "desk appraisal" done which indicates a range of value. A desk appraisal means the appraiser will not visit your home, but rather will pull comparables from closed sales (they may well have more recent comps available than you can obtain from any source) and assign a range of value. Where you price your home within the range is up to you. The cost of this option is about $60, and you will have a formal document with which to justify your price to prospective buyers. Appraisers can be located through the Yellow Pages in your area.
  • Have a formal appraisal completed by a licensed appraiser. The appraiser will come to your home, measure it, inspect it, take pictures and assign an actual market value. The cost of this option is about $300. A professional appraiser will provide you with a formal document that you can use to justify your price to buyers. Keep in mind that your prospective purchaser’s lender will have to order another appraisal and will probably not be able to use yours. Appraisers can be located through the Yellow Pages in your area.
  • Another alternative is to ask a real estate agent in your area to do a Comparative Market Analysis (CMA) for you. You probably receive cards in the mail from real estate agents who cover your neighborhood or know of agents in the area. Obviously, you should tell the agent that you intend to sell the house by owner, before they put in any time on your behalf. The agent will then make the decision whether to help you or not. Most agents will help because they want your listing eventually. Undoubtedly, an agent will try to talk you out of selling yourself. Listen to all the information and then make up your own mind.

Once you've got a range of value or an independent appraisal of the property, you will still have to arrive at an asking price. Unless you are in a very fast market (houses sell within 30-45 days), you should assume that you will get an offer for less than your asking price. Generally speaking, most houses sell within 10% of a reasonable asking price. Set your price at the high end of the reasonable range if your house is in excellent condition compared to other houses for sale in your area, and if the market is fast. Set your price at the lower end of the reasonable range if your house needs work, doesn’t show as well as it could, or if the market is slow.

Prepare Your Seller Disclosure

In many states sellers are required to disclose known defects about the property. Even if not required by law, it is always good policy to disclose known defects. Some states, most notably California, require the seller to provide environmental disclosure. As a seller, it is your responsibility to understand legal requirements for your jurisdiction. We suggest you hire a real estate attorney who can help you meet your legal requirements and negotiate your purchase agreement when the time comes.

Areas of Disclosure for Which You May Be Responsible

  1. Earthquake Fault Zone
    A seller must disclose that a property is located within an Earthquake Fault Zone if the maps or information contained in the maps are reasonably available; i.e., available at county offices (Public Resources Code Section 2621.9).
  2. Seismic Hazard Zone
    A seller must disclose that a property is located within a Seismic Hazard Zone if the maps or information contained in the maps are reasonably available; i.e., available at county offices (Public Resources Code Section 2694).
  3. State Fire Responsibility Area
    A seller must disclose that a property is located within a State Fire Responsibility Area if seller has actual knowledge or when a map is provided to county assessor (Public Resources Code Section 4136).
  4. Mello-Roos Community Facilities District
    If property is within a Mello-Roos Community Facilities District (CFD), seller must make a good faith effort to obtain and deliver disclosure notice to the buyer from the levying agency (Civil Code Section 1102.6b and Government Code Section 53340.2).
  5. Flood Hazard Area
    Federal law requires federally regulated lending institutions making any loan secured by real estate to notify the purchaser (or obtain satisfactory assurances that the seller has notified the purchaser), in writing that the property for sale is located within a Flood Hazard Area. Although federal law only requires lenders to make this disclosure, common law principles of disclosure may impose a duty on the seller to make this disclosure as well (42 United States Code Section 4104a; 12 Code of Federal Regulations Section 339.6).

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