Helpful Information for Selling Your Home by Owner
Most home sellers want to sell quickly and get top dollar for their property. Take the time to educate yourself and prepare your home before putting it on the market. If you are to be successful, you must understand the process and develop realistic expectations. Be unemotional about the sale. Your home has meant a lot to you over the years, but a buyer is not looking at the purchase through your eyes. Once you decide to sell your home, it simply becomes a business transaction, and you must take the emotion out of it.
Research the housing market in your area. Investigate the length of time homes in your area have been on the market. Be realistic or you can become disillusioned when you think your house should sell in a matter of days, when in fact the real estate market dictates that it will take four to five months. If you should sell sooner than expected, wonderful.
Price is the number one factor in determining how quickly a home sells. Price the home at its true market value, not what you just think it is worth. Pricing should be based on market conditions, not emotion.
Prepare to spend some money on advertising. You must let the market know your home is for sale.
Understand that you will spend time answering phone calls, setting appointments and showing the home. Your rewards are well worth it.
Be prepared to handle real estate agents. Know ahead of time whether or not, and to what extent, you will cooperate with agents. You may decide that you will want to offer a "half" commission (typically 2.5 -3.5%) to an agent if they bring a buyer to see your property who ultimately ends up purchasing it.
Recognize that the successful sale of your home depends on you. You must coordinate the process and see it through.
When selling by owner, you don't have to leave the house because an agent wants to show it, or clean it every morning before leaving "just in case". You know when people are coming, and can prepare accordingly. When a buyer makes an offer, there's not all that frustrating back-and-forth telephone tag between agents to reach an agreement. Your negotiating can be done in minutes, and end with a contract acceptable to both buyer and seller.
You Can "Sell" Your Home Better Than Anyone Else
Preparing to Sell
You know your home best. The schools, the neighborhood, what is special about the area and the house, as well as other details about the property. A well-maintained, fairly priced home virtually sells itself; your role is simply to provide additional information.
You Are in Control
Nobody is going to tell you what to do. You can advertise where and how you want to, schedule showings when it is convenient for you, talk directly with prospective buyers yourself and even take your house off the market for a while if you can't find your next home. You are not obligated to a 3, 6, or 12 month contract... you make your own rules.
More Money in Your Pocket
Obviously, this is the main reason that most FSBO home sellers are selling their home. You can save up to 7% commission by doing it yourself. On a $200,000 home, you may save up to $14,000. Here is another way of looking at it. Let’s say your home will sell for $200,000, and you owe $144,000 on the mortgage, leaving $56,000 in equity. If you pay $14,000 in real estate commissions, you have lost 25% of your equity! Sell it yourself… and you'll save a very large portion of your equity.
You Can Sell Faster
If you list your home at a full commission with a real estate agent, you will probably inflate the asking price to cover the cost of the commission. Four to five months later, you will come to the painful realization that no one is going to buy your home at that price, and you'll end up reducing the price (or accepting an offer) equal to the original amount you would have asked, if selling by owner. Do it right the first time, and avoid taking the loss.
Because you meet the prospective buyers, you have a much better idea how interested people are, what they like about the home, how serious they are about buying, and what their time frame and situation is. The direct feedback is easier to live with instead of wondering how things are going, or worse, why no one has made an offer yet.
Easy to Do
"If you can sell your own car, you can sell your own home... it's that simple," said one of our home sellers. And he is right, once you find a buyer... lenders, lawyers, or title companies take over guiding you through the process.
Establishing the correct sales price for your home is the most important step in selling your own property. You should begin by making a few phone calls.
Determine the asking price of similar homes in your area which are currently on the market, and find out how long they have been on the market. Also, find out the actual selling price of similar homes that have recently sold in your area. Many cities have companies that provide this service, usually called a "market analysis" or "comparable sales report"; it is an inexpensive way to get started. Many sellers will interview Realtors just to get opinions.
Now that you have an idea of value, hire a real estate appraiser. The cost of a third party professional opinion is money well spent, it is an accurate assessment of the market value of your home and excludes the emotion and wishful thinking of the home seller. Also, the appraisal can be a valuable marketing tool when buyers begin to question the sales price on the home. Buyers are aware; they have been looking and generally know what a property is worth. Buyers will not make an offer on an overpriced home. An appraisal takes the guesswork out of it for everyone.
Overpricing means you will spend time, money and effort and get nothing for it... except discouraged. It’s a given that your home will sit there, unsold, all because you did not establish a fair market price. Don’t forget that selling your own home gives you a tremendous pricing advantage.
More than likely the homes the appraiser used as comparables, and even the ones you have investigated, probably involved the costs of a real estate agent. In other words, even though a house sold for $200,000, the home seller netted $10,000 to $14,000 less because real estate commissions were paid. You can now price your appraised $200,000 home for $195,000, and probably sell it faster. More importantly, you'll walk away from the closing with more money because of the competitive price.
You have a house to sell and it is time to let the world know it. First, determine your budget and recognize that advertising costs money. Next, target your market. Answer the question: "Where do people find homes for sale in my price range?" Don’t waste time, effort and money advertising in a local shopping paper when you are trying to sell a $400,000 home... it's not where your buyer is looking.
First and foremost, have a professional, easy-to-read yard sign. The sign should clearly say that the home is For Sale By Owner and should have the owner's phone number in large bold print. The sign should also say that the home is shown "by appointment only." There are many reasons for this. You should always be prepared for a showing and setting appointments is the only way to be properly prepared. Some buyers find a home simply by riding around in the neighborhood where they would like to live. Many homes are sold as a result of signage alone and its value should not be underestimated.
Photo Flyers / Information Sheets
These are a must. They should be in a tube or box attached to your yard sign for prospective buyers driving in the area, as well as being available inside the home. Providing these can substantially eliminate unnecessary phone calls. Information sheets are inexpensive but vital. They should provide photographs and a complete description of the home.
Advertising your home on the Internet in today’s world is a necessity. Save 6 provides top-tier search engine placement, as well as automatic daily uploads of all listings to many other leading real estate websites. Save 6 provides easy-to-follow instructions and tips for each stage of the selling, and buying process.
This type of marketing can be very successful for a builder with a new subdivision but with existing, owner-occupied homes, it is questionable. If a prospect has driven by the home, viewed an Internet ad, or seen the home in a FSBO publication, chances are they would prefer a private tour. They already know the price and the amenities of the home. Now, they want to ask questions and get detailed responses. Also, private showings allow the seller to ask questions of your prospective buyer that you probably would not ask during an Open House. Last but not least, you can lose control in an Open House if too many people show up and start heading in different directions. Obtaining feedback is an important goal of an Open House.
It is interesting that throughout the country, Open Houses are viewed differently. In some major Midwest cities, for example, Open Houses are expected if you are going to sell but in similar size cities in the South, having an Open House is the exception rather than the rule. Therefore, you may need to adjust your marketing strategy to local custom. If having an Open House is expected in your market, then by all means do it.
A potential buyer should have a good first impression of your home. Chipped exterior paint, loose gutters, overgrown shrubs and lawn, marred interior walls, cluttered closets and counters, and stained or dirty carpets are simply unacceptable to home buyers. These are all examples of problems that are easily resolved with very little expense. The objective should be to get your home in good condition with minimal expense. Make the decision of what must be replaced or repaired and get it done. Think about painting some, or the entire interior. Fresh paint is clean, and clean is essential. Clutter must be eliminated because clutter, whether it is in the closet, on the counters or on the walls, closes-in space and will make any area appear smaller. In some situations, it can be advisable to even remove some furniture. The feeling someone should have when they enter your home is that it is well maintained, spacious and clean.
Staging, a term used in real estate, is the act of preparing a home before it is put on the market. The goal is to maximize attractive features and minimize flaws in your home. Your home will appear more attractive, both inside and outside to potential buyers through staging. Staging includes removing clutter, cleaning, rearranging furniture, and depersonalizing a home. A staged home tends to sell more quickly and for a higher price. You can either hire a professional stager or do some staging yourself.
Getting your home ready to market does not mean renovating. In fact, it is probably the worst thing you can do because most likely, you will not recoup your expenses. If you decide that remodeling a certain area of the home is absolutely necessary to achieve a sale, then make sure the job conforms to the home and the neighborhood... in other words, do not over-remodel. Homes that overachieve in their neighborhoods often under-perform on the resale market.
Once the phone starts ringing, you should be fully prepared. As a side note, make sure your phone is always answered when you are trying to sell your home. Answering services and machines are inexpensive and are necessary. The message on a machine can be as simple as, “You have reached 555-5555. I’m sorry we’re not available to take your call. If you are calling about the house for sale, please leave your name and number and we will call you back. Thank you.”
When buyers ask to see the home, make sure you get their name and phone number. If some emergency should arise that would prohibit you from keeping the appointment, be courteous and call them. This also allows you to keep a list of people who have toured the home and a way to contact them. While you have them on the phone, find out how they knew your house was available and ask them a few questions. Practice asking these questions beforehand. Find out if they are local or from out of town, do they have a home to sell before they can buy a new one and have they pre-qualified with a lender. Finally, be prepared for the ultimate question from a buyer, “Why are you moving?” Chances are you are moving for the same reasons they are moving. You have outgrown the house, the house is too big since the children grew up, the drive to work is too far, etc. Your response to the question should simply be, that your needs have changed.
Assuming your home is in a “state of readiness,” you can begin to set appointments and show your home. Make sure you set the right atmosphere for the showing; calm and relaxed. Some home sellers will bake bread or cookies while buyers are viewing the home because the aroma is warm and comforting. Fresh flowers, if possible, are a nice touch. The house should be well-lit, no dark halls or rooms. Children, when possible should go to a friend's house, or visit a neighbor. If children are in their room watching television, your buyer may feel intrusive and that is not what you want. Pets should be confined and for the most part, out of sight because they can be distracting.
Many sellers will let buyers simply roam the house, but most prefer a guided tour. This provides the seller an opportunity to point out the many qualities of the home. Try to remember what first attracted you to this house and convey this to your prospects. Talk about what has been updated or recently replaced and emphasize how well you have maintained the home. Discuss the advantages of the location, the neighborhood, close proximity to schools, churches, parks and shopping. You want your prospect to envision living in the home so be positive in all your comments.
Hopefully, you will hear back from buyers who have toured your home but don’t be discouraged if you do not hear from them. You may want to wait a couple of days and give them a call. Simply ask if they have decided on a home yet and if not, is yours one they are considering. This gives the buyer the opportunity to tell you why your home will or will not work for them.
When selling FSBO, be sure to hire an experienced Real Estate Attorney or Title Company to assist you with the legal components of the transaction. Contracts and closings vary by state and it is imperative that you are aware of your legal obligations. Take the time to review your documents several days before the closing. Be sure your forms are completed and that you have met your obligations. If the contract is properly prepared, your closing will go smoothly and both the Buyer and Seller will feel good about the transaction.
Many states require the seller to present the buyer with a "Disclosure Statement" prior to the closing. In this legal document, the seller must "disclose" the condition of the property that is being sold, along with any known defects. This document should be signed by both the Buyer and the Seller.
Inspect the property one last time before the closing. Verify that repairs have been made and that the property has been properly maintained.
Local custom dictates how real estate closings are handled. In many states closings are handled by a title company, while other states may have the custom of using a real estate attorney to handle the closing. Check with your real estate attorney or title company to find out the guidelines in your state.
When moving, first decide whether you are going to hire a professional moving company or be a "do-it-yourself" mover. Either way, you will find a wealth of information available from the moving company or truck rental company.
If you use a professional moving company, they are responsible for damages and will exert caution on items they pack. Be aware of the various insurance provisions and make sure you are properly covered.
If you are packing and moving yourself, it is critical to label the boxes. Often you will think, “I will remember what is in this box,” because it is heavy, light, big, little, etc. Wrong! When your new garage has three hundred boxes in it, you will be lucky to remember what was in the last box you packed, much less what it looks like.
Also, when you are moving yourself, you might use boxes from retailers, grocery stores, etc., which tend to have writing on them. To organize your boxes, you may find it helpful to buy packages of colored construction paper. Tape the same color of paper on at least two sides of a box. On the paper, write what the box contains and if the items are heavy, fragile, etc. Assign a color to each room of your new home. (You might want to tape a piece of the assigned color to each door.) When you are moving in, simply put the boxes in the corresponding room. For example, all the yellow-labeled boxes go in the room with the yellow paper on the door. You will find this very helpful when you have children, friends or relatives helping with the move.
Moving is not an easy task. It is one of the top ten stress factors of life. Planning and organizing in advance can help to simplify the job.