tips

TEN TIPS FOR FSBO SELLERS

Pricing Your Home to Sell
Preparing Your Home to Sell
Effectively Marketing your Property
Professionals You Should Consider
Holding an Open House
How to Tell if the Buyer is Financially Capable
Negotiating with Buyers
Who saves the commission fee
Issues to address before closing
Additional Insights

1. Pricing Your Home to Sell – A property is only worth what a ready, willing and able buyer is willing to pay. You can try to determine what your property is worth by looking at the sales price of other properties around you, how homes currently on the market are priced, and what comparable homes are selling for in your area.

There are Internet programs that will give you approximate values and others that will give you an on-line appraisal. RealEstate.com provides free assistance and Case Schiller & Weiss will sell you an appraisal on-line in minutes. Boston.com and the Banker & Tradesman provides a free level of assistance and for a fee, additional information can be purchased.

You may also engage a real estate agent to give you a free Comparative Market Analysis. Many will do this in hope of getting you to list with them. A better approach may be to pay a real estate professional to do the analysis for you. More and more real estate agents are offering specific services for a set fee.

Probably the best way to determine value is to hire a local appraiser who is on the approved list of several area lenders. This way you should get a professional, written analysis and most likely the buyer can have their lender use that same appraisal and spare them the cost. Remember, a home priced well will sell quickly.

2. Preparing Your Home to Sell - Dress Your House for Success is a paperback book that helps you look at your home from a buyer’s perspective. The authors talk about uncluttering, cleaning, repairing, neutralizing and dynamizing your home for maximum appeal.

Good curb appeal is a priority. You won’t get buyers inside your house if the outside turns them off. Imagine yourself as a buyer pulling up to the curb in front of your house. Imagine the front lawn as the showplace for your house and the garage as the showroom for a brand new car. Now what do you need to clean up, fix or paint? Give attention to the entry way and the front door. Ask for a friend or neighbor’s perspective.

Clutter makes a home seem smaller and it is harder for a buyer to see your house as their home. Uncluttering can uncover a world of space and charm while it better organizes you for a smooth move. Look at each item and make a decision to junk it, store it, sell it or give it away. The kitchen, bath and closets are the most overlooked clutter areas. By putting everything neatly away, you house shows buyers a place for everything and everything in its place. It’s a home where they could feel organized.

Squeaky clean is the measure you are looking for. Windows, drapes, floors, woodwork and doors all need careful attention. Most buyers see a clean house as a well maintained house. Check the caulking on the sinks, tub, and shower. Reasonable repairs should get you $2 back for every dollar spent.

3. Effectively Marketing your Property – Spend the money for an attractive lawn sign. Put a holder on it and fill it with handouts containing information about the property and financing possibilities. Better than half your calls will come from your sign.

Design a handout that uses a photo of the house and describes the features. Most lenders will provide free handouts with lending information on your specific property. Distribute the handouts to neighbors, relatives, and friends. Post them with tear-off slips in Supermarkets, Laundromats, Apartment Complexes, and anywhere else you can, including real estate offices.

Run classified ads in the Saturday and Sunday papers. Keep it brief, but tell the buyers what they want to know. How much is it? Where is it? How many bedrooms and baths are there? That you are Selling By Owner and have Financing Available are additional draws. The purpose of your ad is to get your phone to ring; not to tell them everything about your property. When they reach you , they can get all the details they want.

Use a recorded message to describe your house and the amenities. Many buyers would like to get more information before they talk to a seller directly. In a recorded message you can tell the buyer most of what they would like to know and how they can talk to you directly. Consider getting a second home line with caller ID and voice messaging or a monthly voice mail system from the local phone company. The FSBO Talking Ads provide similar service free of charge to owners in Northeastern Mass. Don’t forget to call every number captured by the caller ID and explore their interest. A pre-written script is helpful.

Take advantage of Internet advertising. You can have your own web page with photo and editing capabilities for about $35. Both owners.com and ForSaleByOwner.com provide Internet advertising anywhere from free to under $150. Eastern Mass FSBOs can use ForSaleByOwnerSearch including up to five photos for absolutely free. REBAC (The Real Estate Buyer’s Agent Council) allows FSBOs to register their home on their site and when there is a match they e-mail you and the Realtor who has the buyer.

4. Professionals You Should Consider – The five professionals you should consider putting on your selling team are an Attorney, Home Inspector , Appraiser, Lender, and Realtor. Let me explain.

An attorney can protect you with contract language in the purchase agreement. It is best to find a real estate attorney. Ask what they will charge and don’t be afraid to shop for a reasonable price. You need them to handle the Purchase and Sale agreement and you may want them present at the closing to represent you.

It is smart to have your home inspected prior to putting it on the market. A Home Inspection will turn up things that may need immediate repair. Make the repairs and show them to prospective buyers. Include radon, septic, water, and other tests that apply in your area. This makes your home more desirable to buyers who will save money and know what they’re getting into before they make an offer and it avoids renegotiating. It may also take less time to get to closing.

An appraiser will give you a written report with photos and information from comparable sales that help establish the value of your home. It convinces a buyer you are asking a fair price and many lenders will use the same appraisal, saving the buyer money.

A lender may be your best friend in selling your home. Most lenders will provide numerous free services for you because it is mutually beneficial for them. They can pre-qualify all your prospective buyers to make sure they can afford to purchase your home. They can provide listing sheets for you that describe your property and give financing alternatives. They are often willing to come to your open house and approve buyers on the spot. It is surprising that more FSBOs don't use the free help of lenders. Just call and tell them you are selling your house on your own and that you will be willing to send borrowers their direction if they are willing to help you.

Real Estate Agents who are willing to unbundle their services can be a tremendous asset to your team. They can help all the way from helping you to establish value to negotiating the sale for you. They and their associates may have a resource pool of potential buyers. Make sure Buyer Brokers know about your home. Buyers have hired them to find and negotiate a home purchase. Many agents will help you with an Open House as a way to contact buyers themselves. Some Realtors will provide free services such at the FSBO Talking Ads and others like List For Less will list your FSBO property in the MLS for a nominal fee.

5. Holding an Open House – This is your chance to showcase your home to potential buyers. Weekend days are usually best. You may want to alternate the times from 10-2 and 1-5 to accomodate buyers. You may decide that the weekly Open House is the only time you want to show your home. It’s not a bad idea to have multiple buyers looking at the same time. Each feels the other may scoop the house and it encourages highest and best offers.

A team approach is the best way to host an Open House. That way someone can go with each party as they go through the home. Don’t hover, don’t bore them with small talk, but keep them in your sight. Be on the lookout for potential burglars. Lock up your valuables and have a guest book for everyone to leave their names and phone numbers. Call each one later to ascertain their interest in your home.

Don’t forget to invite the neighbors. You’d be surprised at how many times a neighbor knows just the right buyer for your home. Send out postcards, advertise in the classifieds, and invite local real estate offices. A lender may very well help you advertise your Open House for free. Have them attend and pre qualify any potential buyers. Don’t forget a lawn sign and directional signs pointing to your Open House.

Sight, sound, and smell are crucial to the success of your Open House. A cluttered house with fussy children, a stinky diaper or smelly garbage will send a buyer running. On the other hand, fresh flowers, soft music, a lighted fireplace, and bread or cookies baking will make the buyers want to stay. You may even want to serve a snack.

Don’t keep pets in the house during a showing. It’s not wise to have children underfoot either. It can make the home seem smaller and break the buyers’ concentration. Have all lights on, including closets. Get as much light as possible into the home by opening shades, etc. Use our First Impressions check list.

Buyers like Open Houses because they can go to them on their own without a broker. Many buyers will tour several Open Houses on the same day. It provides them with the opportunity to educate themselves and become more familiar with the market. It may also be your opportunity to sell your home. The book, How to Sell your Home in 5 Days, boasts good success in selling a house after a Saturday and Sunday Open House with the home being sold Sunday night to the highest bidder.

6. How to Tell if the Buyer is Financially Capable – Most lenders will provide capable buyers with a letter of pre qualification or better yet, pre approval. The pre approval is much stronger because it entails a hard credit check on the borrower and means the only outstanding contingency is the bank appraisal.

Any serious buyer can provide you with evidence of their capability of buying your home. Even a cash buyer can deliver verification through a financial advisor, accountant, or bank. If you have made contact with a lender to help in your Open House and to provide information sheets for potential buyers it is a simple task for them to pre approve the buyer for you. The lender can also help you match the buyer with the best programs available for them.

Don’t be afraid of a low down payment if the buyers can evidence pre approval from a bank. As long as the total purchase price is guaranteed, it doesn’t matter where it comes from. More and more borrowers are getting their loans on-line. If the buyer of your home is using an on-line lender make certain you have some preliminary assurance from the lender and hold fast to the commitment letter date. E-loan is one of the largest and more experienced on-line lenders.

Don’t be shy about asking about asking qualifying questions. Capable buyers will answer your questions honestly. Be cautious of buyers who hedge or give vague answers. Why waste time with buyers who fall in love with your home and then can’t afford to buy it?

Find out if they need to sell their present home before they can buy. If so, is it on the market now and how many offers have they gotten. If they are already working with a lender ask for the lender’s name and phone. If not, offer to hook them up with a lender with whom you have established a relationship. Ask for an initial deposit to accompany the offer and second deposit to follow ten days later or when a final Purchase and Sale Agreement is signed.

7. Negotiating with Buyers – Give and take is a necessary part of any negotiations. A reasonable buyer will not want to nit-pick and gouge. Unlike a plaintiff and defendant, home buying does not need to be a win/lose transaction. Buyers are usually scared to death of paying too much for a home. Both parties need to feel that a fair price was paid for the home.

Unfortunately, not all home buyers are reasonable. If you have experience in negotiating and you’re a fair minded person you will probably do well. If negotiating is a weakness for you, then consider hiring a real estate agent or an attorney who will do it for you. A reasonable buyer usually makes a reasonable offer.

There are reasonable contingencies and unreasonable contingencies. You need to decide for yourself what is acceptable. Avoid nit-picking and beware of too many buyer escape clauses. It would seem that a home inspection clause and a financing clause are reasonable. Be cautious beyond that.

It is usually not advisable to negotiate items like a refrigerator, washer or dryer as part of the purchase price. Once you come to an agreement on price and terms, then you can add the items you want to include in the purchase price in the Purchase and Sale Agreement. Thousands of dollars are at stake. It doesn’t make sense to lose a sale over a $500 refrigerator. Come to an agreement on the purchase price first.

8. Who saves the commission fee - Since you are selling your home For Sale By Owner, many buyers are going to think you are saving a lot of money on commissions and will most likely offer you less as a result. Be aware of what the average commission structure is in your area. Then consider giving up half of that so the buyer feels they have gotten an advantage in buying a home For Sale By Owner.

The most important number is the net amount you will put into your pocket. While there is no standard commission amount, whatever commissions the market is currently bearing should be subtracted from the purchase price. For example: A $100,000 house may yield a $94,000 net to the seller.

Excellent tips on negotiating are found in Ilyce Glink’s book 100 Questions Every Home Seller Should Ask. She talks about the negotiating process, tips and strategies for a better price, multiple offers, kick-out clauses, financing options including seller financing, and how to deal with family or friends who may want to purchase your home.

Remember that the law requires that real estate contracts be in writing in order to be binding. It is best, therefore, not to accept a verbal offer. Ask the buyer to put the offer in writing and then review it with your agent or attorney. You may then accept, reject, or counter the offer.

9. Issues to address before closing – There are issues you will need to address before closing. They vary some from state to state, so know your own state laws and procedures. If you’ve agreed to any repairs or other contingencies, they must be met. If you haven’t called on a professional to this point, it may be time, particularly if you’re dealing with a cash buyer.

Since the buyers will own the home at the passing of papers and the recording of the deed, it is important that you have vacated the property prior to closing unless you have a specific, written agreement to the contrary. Make sure you have all necessary certificates including the municipal lien certificate and the smoke certificate.

The Real Estate Settlement Procedures Act requires that a copy of the HUD-1 Settlement Statement be given to both the buyer and the seller prior to closing. This is a financial summary of the entire transaction. It is wise to check all the numbers and raise questions before the closing. Mistakes are not uncommon.

You should be given a copy of everything you sign at the closing. Be sure to keep it on file for tax purposes. You will also be asked to produce a photo identification (drivers license) and to affirm that everything you sign is your free act and deed. The more closing documents you have read prior to the closing the smoother things will go at the closing table.

Typically, some of the things you will need at closing include the deed to the property, a title affidavit, bill of sale, lien certificate, receipt for paid real estate taxes, a property survey, keys to the house, a certificate of clear title, transfer stamps, certificates of compliance, paid water bills, etc.

10. Additional Insights – You may want to familiarize yourself with a Glossary of Real Estate Terms which will help explain most of what happens in real estate. Sometimes it is helpful to be familiar with the various abbreviations that are used in real estate and in the MLS descriptions.

Access to Real Estate Forms is essential if you do not have a professional working for you. Knowledge of contract law and real estate legislation in your state is important as well.

Pat Rioux has written and explained the ABCs of Home Selling. Assess the market, Broadcast your house sale, Check comparable sales, Disclose property defects, E-mail saves time, Find the deed and tax bill, Gather personal items, Highlight positive features, Invite agents in, Jump in the car and take a drive, Keep track of potential buyers, Locate warranties and repair bills, Make a to-do list, Negotiate in a business like manner, Online sites are helpful, Print a fact sheet, Query buyer’s financial capabiity, Raise the shades, Silence pets and children, Turn attention to curb appeal, Use bulletin boards, Validate all information, Weigh all offers, eXamine you net, Yield to small concessions, Zero in on the competition.

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