In the first segment, we looked at the good and the bad aspects of going For Sale By Owner or FSBO. This time we will talk about setting up your team, pricing your home properly, and attracting potential buyers.
Setting up your Team
Just because you have decided to sell your house on your own, doesn't mean that you should do everything yourself. It is important that you set up a team of experts to help you with the details. Here are a few people you should have on your team:
Title Company/Real Estate Attorney: You will want help preparing the sales contract and any disclosure documents pertaining to the sale of your home. You really want to get this part right to avoid any legal difficulties later. If you have a trusted friend who is an attorney, they can help. Also, most title companies prepare these documents several times each day, and may provide these services free or for a reduced fee, with the expectation that your will use their services for title and escrow, a good deal for both of you!
You may also find a real estate agent who will perform these services for you for a nominal fee. If you are staying in the local area, your buyer's agent may help you with the sale of your home, and with a little negotiating on your part may even do it for nothing, since they are going to be compensated on the purchase of your new home (which you won't be buying unless your current home sells).
Mortgage Lender: OK, I'll admit that I may be a little bit biased here, but a good lender can be one of the most valuable people on your expert team. A good loan officer can pre-approve any interested buyers for you, so you can weed out those who are just incapable of buying your home. A lender should also be willing to prepare a financing breakdown on your home, allowing buyers to compare different financing options.
You can also get pre-approved for the purchase of your new home! This can save you money and puts you in a stronger bargaining position compared to others who may be interested in your NEW home. I have seen this one item make and break a home purchase agreement.
Home Inspector: You may want to think about having your home inspected prior to putting it on the market. This will help you with your disclosure statements, and makes a very favorable impression on buyers!
Pricing your home to sell
How much should you sell your home for? It's simple... Just as much as you can get, and still sell in a reasonable time frame, right?
Absolutely! The problem is that most homeowners don't really have an accurate idea of the value of their home. How can we solve this dilemma?
The best way to value your home is to have an appraisal done. An appraiser will look at your house and compare it to other, similar houses (comps) and arrive at a fair market value.
You would then take this value and make any adjustments you feel are necessary. Do you need to sell quickly? You might want to lower the price a little. Have time and want top dollar? Then maybe you want to leave the price right at market, or even a little higher.
Don't want to pay for an appraisal? After all, they will cost several hundred dollars. You can get an idea, though not as accurate as an appraisal, by asking your title company (you did remember to set up your team already, didn't you?) or a real estate agent to "pull comps" for you. Just take what you see with a grain of salt, and remember to figure in whatever direction the market is moving. Remember, comps deal with past sales prices, not what they would sell for today.
Attracting potential buyers
There are numerous ways to lure prospective buyers to your home. Some of the most common are:
Signs: Probably the most important thing you can do to sell your house quickly is to put a professional looking FSBO sign in your front yard. This will tell everyone who drives by that your home is on the market, and will also make it much easier for potential buyers, who may be looking for your house, to find it.
Flyers: You will want to have flyers printed up that describe your house. Be sure to include such highlights as the number of bed and bathrooms, square footage, and any unique features that may not be obvious at first glance. Put a photo on the flyer (black and white is fine). An excellent idea is to put some financing options on the back of the flyer. Your lender can give you this information.
Classified Ads: You will probably want to put an ad in the classified section of the local paper. Keep it short and sweet (it's cheaper that way). If you are holding an open house, you will definitely want to place an ad in the real estate section the day before.
Neighbors: This is an often neglected source of buyers, by realtors and FSBOs alike. Tell all your neighbors, or send out a postcard, that you are selling, and ask them if they have any friends or relatives who would like to live in the neighborhood.
Internet: Think about listing your home on the net. Many people start their home search online, but most are just browsing, and you may wind up with less serious shoppers. Be sure to weigh the costs vs. the advantages. Craigslist is a free site that is getting more and more real estate traffic, check it out before spending money on an expensive listing service.
Showing your home
Oh No! There are people coming to look at your house. What do you do now?
Before hand, make sure you have your flyers printed. Now, go out and buy a few packages of ready-made chocolate chip cookie dough and some microwave kettle corn, you'll see why in a sec.
OK. It's the day of the showing. First, take a quick run through of your entire house. Make sure everything is clean and picked up. Remember, no clutter is best! Next, give the carpets a quick vacuum. Even a soiled carpet looks better when it has been recently vacuumed.
About a half hour before the home shoppers arrive, put a dozen of those chocolate chip cookies in the oven. They will make the house smell much more "homey," plus you can put the cookies on a plate to offer to your "guests." This is an old real estate agent's trick, that will work wonders... try it.
What if you are going to be getting home from work just a few minutes before the showing? Pop the kettle corn in the microwave. The scent reminds many people of apple pie, and that has to be a good thing, doesn't it?
RELAX!! The showing will go much better if you do. You are now better prepared than most of the people who have sold their houses. You'll do just fine.
Accepting the offer
When you receive an offer on your house, don't take it personally. Remember, many people will look at any FSBO home as an opportunity to make a "low-ball" offer. Take your time, and try to look at the offer objectively.
Have a professional help you with the purchase agreement. Once again, your buyer's agent may be willing to help you look over the offers on your home. It never hurts to ask (preferably when you are interviewing various agents). You will probably want to make a counter-offer, and there will likely be a time limit on the offer you received, so again, it is best to have your experts lined up ahead of time. From my own experience, I can tell you that "Good contracts make for good friends!"
Again, remember not to take the offer personally. After all, this is a business decision for you. If the numbers work, Great! If they don't, then don't feel like you have to take the offer, especially if it is the first one.
Finally, before accepting the offer, make certain that the potential buyers have the ability to qualify for the loan. If they have not been pre-approved (not just pre-qualified, there is a difference) your lender can help you make sure they can actually buy your home before you waste a lot of time, and possibly turn away other, qualified buyers.
I hope this helps you negotiate the pitfalls of selling your home For Sale By Owner. Good Luck!
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