TIPS FOR FSBO SELLERS 1. Price Your Home to Sell – A property is worth what a ready and able buyer is willing to pay. You can determine your property's value by comparing the current sales price of other properties in your immediate neighborhood and analyze what those homes have sold for. It is always best to get an appraisal. Internet programs are available that will give you approximate values and some will give you an on-line estimated appraisal. Most Realtors will provide a free professional market analysis. The best way to determine your home's value is to hire a qualified local appraiser. With a professional appraisal, you will receive a written analysis based on sold homes in your neighborhood. Most of the time, the buyer's lender will order an appraisal of your home should you open escrow. The buyer can however, have their lender use your appraisal and spare them the cost. Remember, a home priced correctly will sell faster.
2. Staging Your Home to Sell - Look at your home from a buyer’s perspective. Remove clutter, clean, repair, and neutralize your home for maximum appeal. Curb appeal is essential! You won’t get buyers inside your house if the outside is unattractive. Imagine yourself as a bu yer pulling up to the curb in front of your home. Picture the front lawn as the showplace for your house and the garage as the showroom for a brand new car. What do you need to clean up, fix or paint? Give close attention to the entry and the front door. Ask for a friend or neighbor’s opinion. Clutter makes a home seem smaller and it is harder for a buyer to imagine your house as theirs. Removing clutter uncovers space and creates charm while it better readys you for a smoother move. Look all your stuff and make a decision to junk it, store it, sell it or give it away. The kitchen, bathrooms and closets are the most overlooked cluttered areas. Put everything away. You want your home sparkling clean at all times! Windows, drapes, floors, woodwork and doors all need careful attention. Most buyers see a clean house as a well maintained house. Check little things like the caulking on the sinks, tub, and shower. Reasonable repairs should get you $2 back for every dollar spent. 3. Effectively Market your Property – Spend the money for an attractive lawn sign. Put  a holder on it and place a container on it with flyers containing information about your home such as approximate square footage, lot size, number a bedrooms and bathrooms, etc. More than half your calls will come from your sign! Design a flyer that uses a photo of the house and describes the features. Most lenders will provide free flyers with lending information on your specific property. Distribute the flyers to neighbors, relatives, and friends. Post them with tear-off slips in grocery stores, laundromats, apartment complexes, and anywhere else you can, including real estate offices. Run classified ads in the Saturday and Sunday newspapers. Keep them brief and tell the buyers what they want to know. How much is it? Where is it? How many bedrooms and baths? Disclose you are Selling By Owner and have financing available. The purpose of your ad is to get calls and not tell them everything about your property. When theycall you, then they can get all the details they need. Take advantage of the Interne. You can have your listng with photo and effective marketing on this website free of charge. Provide Gail the pictures and information and she will be happy to list your property for sale by owner. Both owners.com and ForSaleByOwner.com provide Internet advertising anywhere from free to under $150. 4. Professionals to Consider – The five professionals you should consider putting on your selling team are an Attorney, Home Inspector , Appraiser, Lender, and Realtor. 
An attorney can protect you with contract language in the purchase agreement. It is best to find a real estate attorney. Ask what their fees are and don’t be afraid to shop for a reasonable price. You need an attorney to handle the Purchase and Sale agreement and you want the attorney to be present at the offer and the closing so you can be well represented. It is wise to hire a property inspector to have your home inspected prior to putting it on the market. A Home Inspection will reveal things that may need immediate repair. Make the recommended repairs and show them to prospective buyers. Include radon, septic, water, and other tests that apply in your area. This will make your home more desirable to buyer because they will know the condition if your home before making an offer. 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. 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. 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. Many agents will help you with an Open House as a way to contact buyers themselves. 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 10:00 AM to 2:00 PM and 1:00 PM to 5:00 PM to accomodate buyers. 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. It is a good idea to have two or more people working your Open House. This way someone can go with each party as they walk through your 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 neighbors.You will be surprised at how many times a neighbor knows a possible buyer for your home. Mail 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. Obtain 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, smelly garbage or tobacco odors will send a buyer running. On the other hand, fresh flowers, soft music, a burning fireplace, and the smell of bread or cookies baking will make the buyers want to stay. Serve a snack or small bottles of cold water especially if it is a hot day. Don not keep pets in the house during a showing or have children underfoot. Have all lights on, including closets. Get as much light as possible into the home by opening shades, etc. Buyers like Open Houses because they can go on their own without a broker. Many buyers will tour several Open Houses on the same day. It provides them the opportunity to become more familiar with the market and with the neighborhoods they are interested. It may also be your opportunity to sell your home.  6. How to Tell if the Buyer is Financially Capable – Most lenders will provide able 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 which means the only outstanding contingency is the bank appraisal.
Any serious buyer can provide you with evidence of their ability to buy 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 with your Open House and provide information sheets for potential buyers, it is easy 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. Ask about asking qualifying questions. Capable buyers will answer your questions honestly. Be cautious of buyers who hedge or give vague answers. Don't waste time with buyers who fall in love with your home but 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 received? Are already working with a lender? If so, ask for the lender’s name and phone. If not, offer to recommend a lender with whom you have established a relationship. 7. Negotiating with Buyers – Give and take is a necessary part of any negotiation. A reasonable buyer will not nit-pick or gouge. 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 has been negotiated. Unfortunately, not all home buyers are reasonable. If you have experience negotiating and you are an objective person, you will probably do well. If negotiating is a weakness for you, 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 and unreasonable contingencies. 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, but cautious beyond that. It is not advisable to negotiate personal property items like a refrigerator, washer or dryer as part of the purchase price. 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 home's purchase price first then add the personal property items you want included in a separate written agreement. Most underwriters will not allow chattel to be included in the home's purchase agreement.
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. 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. There is no standard commission amount, but 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. Remember, 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 before closing – There are issues you will need to address before closing. They may vary some from state to state, so know your own state's laws and procedures. If you have agreed on repairs or other contingencies, they must be met. If you have not called on a professional at this point, it may be time, especially if you are dealing with a cash buyer. You must vacate the property on the date of recording unless you have a specific, written agreement to the contrary. 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 closing. Be sure to keep it on file for tax purposes. Some of the paperwork required at closing include the deed to the property, a title affidavit, 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, etc.
10. Additional Insights – 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 extremely important. |