| FSBO 101 | |
|
Selling Your Own Home - An Outline
Selling your own home can be a time-consuming and frustrating process. Though listing with an agent is probably the best plan, I won`t leave you do-it-yourselfers without some helpful information. In the right market, it may make sense to save the commission and do it yourself - if you know what you are doing. Use the outline here to do it right, and to avoid common mistakes. First Understand Home Value
It`s not what you think your house is worth, and it doesn`t matter how much you put into it. The value is only what it`s worth to potential buyers. See what they`ve paid for similar homes before you decide on a price. Do a market analysis - don`t just guess. Over-pricing can cost you as much as under-pricing.
Selling Your Own Home - The Rest Of The Story
Be objective. Get your most honest and open friend to walk through the house with you. He or she will see problems you didn`t even know were problems. "Sell" the home to him, telling him all the benefits of buying your house, and get his honest opinion of your sales technique.
Make a thorough plan. What will your kids say to those who call? Where will you close? Have you thought through your disclosures? Will an attorney prepare your documents? Plan well, and it will all go smoother.
Make a list. What needs to be repaired, cleaned, changed, or removed? Always do the most obvious things first.
Prepare the house for sale. Beyond the obvious cleaning up and repairing, look for easy improvements that will increase the value of the home.
Prepare your sales pitch. List any questions buyers might have, and be ready with answers. Prepare comparison sheets showing other home sales, so buyers can see the value in your home. Make a map showing nearby stores and libraries, etc. Sell the benefits, not the features. Never say "near stores." Instead, say "You can walk to the store in five minutes." Don`t just say "garage." Try "No chipping ice off the windshield in the morning."
Put crucial information your advertising. Include the square feet, the number of bedrooms and bathrooms, the address, your telephone number, and the price. If you leave out the price, some buyers just won`t call, plus you`ll waste time with others who shouldn`t be calling.
Listen to buyers. One mistake seller’s make talking to buyers is to get defensive about their home. Listen to the criticisms, and resolve them or ask how important the issue is to the buyer. In other words, try to learn a little about selling.
Have forms ready. You don`t want a buyer to say, "I love the house. I`ll get an offer form somewhere tomorrow and then I`ll be back." He might see another home he likes before then. Have copies of an "offer to purchase," or "purchase agreement" form ready. In real estate it is only legally binding if it is in writing. When you are selling your own home, you need to have ready the same tools that a Real Estate agent would have.
Have a clear sales agreement. Be sure it`s understood by both sides. What happens, and when? What if the buyer doesn`t get financing? What`s included with the sale? When will the buyer take possession? Who pays the closing fee and the transfer tax? Make closing easy. Choose a closing company before you even have an offer. Have documents ready to sign. Prepare answers to likely questions. This will probably be the largest financial transaction in your buyer`s life, so make him comfortable.
____________________________________________________________________________________________
Listing Your Property At The Top of the Market
In making the decision to sell, you do the research to find out what comparable homes in the area are selling for and how long it takes them to sell. You decide to list your property at the top of the market because you have serious upgrades and the research shows comparable homes are moving pretty quickly. While you may be willing to wait a bit for an offer, you run a risk of sabotaging yourself.
Time is a two way street in the real estate industry. While you are probably not particularly interested in waiting a long time to move the property, buyers are considering time as well. Specifically, they are wondering why so much time has passed since your home was first listed. Is it an indication that there is something wrong with the property? Many potential buyers will start to think so. If you price the property at the top of the comparable market, you run this risk and selling becomes very difficult.
One justification many sellers make for picking a high price is upgrades done to the property. In many scenarios, this is logical and makes practical sense. That being said, you may be in for a nasty surprise. Most buyers prefer to make the upgrades themselves, not pay a premium for what you have done. Ultimately, this means the higher price may find little interest because the potential buyers ignore the value of the upgrades. This can also lead to the frustrating situation wherein you realize you spent more money on upgrades than you will ever get out of the property. Ouch.
The final risk associated with pricing your property at the top of the market is the potential it will be ignored. The general rule in real estate for buyers is to purchase the lowest priced home in an area and then fix it up. With minor changes, appreciation gains can be significant. If your home is already at the top of the market, a buyer really cannot do this and will actually have to wait for other properties in the area to appreciate. Savvy or even moderately knowledgeable buyers will not take the bait. Pricing your property for sale is a trick issue. Figure out your market and make your own conclusions. To maximize profit, it is best to be in the middle of the market, but always below other homes that are superior to your property.
____________________________________________________________________________________________
Dealing with Negative Home Inspection Reports as a FSBO Seller
If you are selling your own home without a Real Estate Agent , you can run into situations that can be a bit complex. One such situation is a negative home inspection report.
Dealing with Negative Home Inspection Reports as a FSBO Seller
When the purchase of a home is made, one of the first steps during the escrow period is for the buyer to order a professional home inspect. A certified home inspector will come out to the property and spend a few hours investigating it. The inspection will cover everything from the condition of the roof to water leakage to drainage issues to…well, just about everything.
Once the inspection is done, the home inspector will kick out a report noting problems areas and needed fixes. In many cases, there will be a lot of recommended fixes. Most of these, however, are going to be very small and inexpensive in nature. Your best bet as the seller is typically to agree to fix them or provide money at the closing for the buyer to do the job. The money typically comes in the form of a discount from the actual amount the buyer pays you at settlement.
While this all sounds straightforward, things can occasionally go bad. Assume you receive and accept an offer on your home. Now assume a home inspection is done and a repair report kicked out. While there are a bunch of small items, the report also contains language indicating the roof needs to be replaced. This is not a small item! What do you do?
At this point, you have a few options. The first is to repair the roof. The second is to discount money out of the closing for the buyer to do it. The third is to walk away from the deal using the argument that the roof does not need to be replaced. Unless you are absolutely sure the roof is fine, your best option is to try to negotiate a compromise with the buyer. Your negotiating position should make it clear that you are willing to address the roof issues, but not pay for an upgrade to the current roof.
In many instances, this type of a problem will lead to the home falling out of escrow, to wit, the deal dies. If this occurs, you may think the first move is to put the home back on the market. This is false. The first move is to deal with the roof issue. If you run out and put the house back on the market, most states require you to provide the negative home inspection report to any subsequent buyers. Obviously, that is a problem.
If you are selling your own property, it is important to understand that the home inspection report is going to require some repairs. Just watch out for those major ones.
____________________________________________________________________________________________
Take These Steps To Make Buyers Remember Your Home
When selling a property, it is important to remember that most buyers are looking at a lot of listings. This means your goal is to make them remember your home.
Take These Steps To Make Buyers Remember Your Home
Some people get a bit conservative when it comes to selling their home. They tend to view it as a family heirloom. Instead of taking all possible steps to make it attractive to a seller, they get offended by even the remotest of suggestions that any such steps need be taken. The simple fact, my friend, is the moment you decide to sell, your property goes from a family residence to a product. If you fail to make this emotional leap, you are going to have problems selling it.
When you show your property to buyers, it is important to remember something. They did not jump into the car just to come see you. Nope, they are two, four and maybe even six timing you. By this, I mean they are most likely visiting multiple houses on the day in question. Put in practical terms, you are in a competition with those other mystery houses and you must make your stick in the mind of the buyer.
To “win the day”, you obviously need to have your home in good overall condition. This means the structure needs to be in acceptable shape. The paint should be perfect. The landscaping should be cut back to something less than a rainforest. Clutter should be removed. Basically, you should give the property the once over.
To really make your property standout, however, you need to take a few extra steps. First, emphasize comfort by playing some soft music. Second, bake something that smells nice, but is not to strong. If you can't cook, go to the baker and get a cake or something. Third, potpourri should be used in all bathrooms. Fourth, cut and put fresh flowers in various rooms that otherwise appear bland. Five, provide more detailed information on the home in a written form you can hand out. Six, if there is a particular reason you are moving, tell the sellers on said memo. I just want to cash out or the new neighbors are noisy, is not a good reason! If you take these steps, the buyers will remember you at the end of the day. If your property is one that fits what the buyers are looking for, an offer will soon follow.
_________________________________________________________________________________________________________
Seller Disclosures-When Selling a Home As Is
When you are all set to sell your home , it is essential to keep in mind that it is one of your legal and moral obligations to disclose all the problems affecting the desirability or the value of the property. Concealing major defects or problems fraudulently is considered illegal and could result in a lawsuit. California requires a proactive role from the sellers to produce written disclosures about the condition of their house. This rule is applied not just to the regular sellers selling new or repaired houses, but also to all those who are selling a house 'as-is'. Any seller failing to do so can face a legal claim that might cost them dearly.
A seller disclosure usually includes all the 'material' defects or problems existing in the property before presenting it to a potential buyer. Some of the primary items that must be added in a seller disclosure include the mention of electrical or plumbing defects and potential hazardous conditions hampering the safety concerns while staying in the house such as an asbestos insulation or an abandoned well. The sellers would also need to specifically mention about any encroachments or any alteration or addition done to the property without a building permit . If the house has fences that are placed beyond the property line, those also need to be mentioned in the seller disclosure document. Additionally, you may enquire about all legal aspects that need to be mentioned in the disclosure from your Real Estate Agent and include them accordingly. Some states also require mentioning of any acts of violence or crime that have taken place in the property.
Damage caused by any natural calamities in the past or susceptibility to any damage in the future should be mentioned in the disclosure. The list of registered sex offenders in the area is also included among the mandatory disclosures.
California state law includes the mention of deaths that have occurred within the last three years in the property, leaky roofs, and disturbing problems around the neighborhood such as dog barks during the night or blaring music from nearby houses. Residential Environmental Hazards must be included. While selling a house 'as-is', you need to mention all those items and fittings in the house that may need repairs or replacement.
It is usually not required to hire a home inspector to find out the problems; you can specify those that are within your personal knowledge. Nevertheless, you may hire a general contractor to help you in determining the major defects, which will help you in gaining the confidence of the buyers and assure them about the fairness of the deal.
It is important to note that California perceives it as your responsibility to find out the defects and not turn a blind eye on the possibilities of a potential problem. Although you may initially get away with it, once the buyer finds out and faces problems, you may end up settling the matter in the court, compensating the buyer for your lack of responsibility. It is advisable to put all the disclosures in a written format, even the smallest issue that you have discussed with the seller personally. In case of doubts and queries, ask your agent to help you with all the relevant information you need to provide in the disclosure form. Your agent can also help by providing you with a disclosure form. Disclosing the problems does not mean that you have to repair or mend them. It is just an honest confession on your part that may help in negotiating the prices and avoid future complications.
____________________________________________________________________________________________
Important Terms
Real Estate agents, escrow officers, loan officers and other professionals in the real estate industry use some strange words. Use this handy list to talk like the pros.
|
|
| IDX Search & Real Estate Website Design by YourMLSsearch.com © 2010. View our Privacy Policy. |