Think you possess the knowledge and expertise to sell your home yourself? According to the National Association of Realtors, most For Sale by Owner listings or FSBO’s, end up being turned over to a real estate agent. There are two schools of thought as to why this happens. One explanation is that buyers work with agents and expect sellers to do the same. The other is that owners feel that since they are saving on the price of a listing agent’s commission, they can figure that amount into the asking price, which often causes FSBO’s to be unreasonably priced. For today’s competitive buyer’s market, here are a few helpful hints for anyone considering selling a home on their own.
The Total Package
Attracting potential buyers will mean taking the necessary steps to upgrade and update your property so it is a contender in the current flooded market. That means, cleaning the home inside and out, plus the yard and garden areas. Consider hiring a home stager to come in and assess what aspects of your home should be addressed. Formica countertops, dated furniture, tired fixtures, broken bathroom tiles, questionable paint colors, old appliances, and textured ceilings are on the list of no-no’s. Be aware that removing 90% of the home’s contents is a common practice when staging.
Now is also good time to bring in a home inspector, before you list the house. That way, you can take care of any issues and feel good about the property you are offering. Establishing that everything is in order can also be helpful when formulating your asking price.
Price Your Home
Avoid the common overpricing pitfall of many FSBO sellers and hire a professional real estate appraiser. They can use data on the local market along with an analysis of comparable property, square foot costs, and likely help you determine a reasonable asking price. Heed this advice of www.forsalebyowner.com: “Remember: the home selling market dictates the price, not what you think it should be worth”. After all your mortgage broker or lender is only going to based their lending decisions upon recent sales comparables in your area.
Market the Package
Next; reach house hunters through an active marketing campaign, and from local and out of state FSBO publications to the MLS, leave no stone unturned. Is a large company from another state headquartered in your area? Find out where they bring in employees from and post an ad there! Online ads are some of the best, especially when a virtual video tour is included. Hire a professional real estate photographer to assist with a color flyer or brochure, and then place them in a brochure box/for sale sign in your front yard. Place directional signs around the neighborhood that will direct buyers to your home. Consider holding several open houses and if you do, have all of the home’s pertinent information handy, such as the blue print, inspection report, and any before and after photos that show major upgrades such as additions or improvements.
Hire a Real Estate Attorney
Unless you are a real estate pro or attorney yourself, spending the extra money to hire a real estate attorney is a must. Their help will be vital in a variety of aspects, such as complex offers, an escrow account, contracts, and the closing process. Having legal advice will also give you piece of mind and help avoid any disclosure issues.
When you receive an offer, you’ll want to consult with your attorney. You and the buyer may want to go through the 3-day “Attorney Review Period”, which is when both parties can make changes or amendments to the tentative contract. After that time, the contract becomes a binding, legal document. Be cautious about contingency requests, such as one that allows their home sale before closing on yours. Before agreeing to the buyer’s terms, you may also ask that they receive preapproval from their lender.
Ball in the Buyer’s Court
The buyer’s mortgage lender will require an appraisal of your home to ensure they are not agreeing to a price that’s more than the home is worth. Next, a survey and title search is conducted and is the responsibility of the buyer. The buyer’s mortgage company will then issue a “commitment”, at which time the buyer must complete the conditions of the mortgage commitment.
A “walk through” is conducted by the buyer on the day of the closing. This ensures that all agreed upon repairs are complete and that the home is in the same condition as it was at the time of the offer. If there are any issues, which need to be taken care of, funds from the seller’s escrow account are used. At the closing, which is usually from 30 to 45 days after the contract signing, all monies are collected, any liens are paid, the deed is transferred, and the insurance is issued establishing that the title is free & clear. Sellers usually receive the payment from the sale within two business days.