Homes For Sale By Owner – Top Ten Secrets To Selling Your Home By Yourself

So you’ve decided to sell your house yourself! You can save many thousands of dollars if you are successful. I wrote this guide to help you. I’ve seen many FSBOs have unrealistic expectations and make mistakes along the way that ultimately prevent them from being successful. Did you know that 80% of FSBOs eventually list their home with a realtor? I hope these ideas will help you get to the other 20%.

Am I trying to bankrupt myself? No. Do I think everyone has the right to sell their house the way they want? Yes. If your circumstances change and you decide you want a professional to sell your home for you, call Gold Valley Realty. We are a full-service brokerage firm with a flexible commission structure that’s hard to beat.

Tip 1 * Plan your strategy

Firstly: when must your home be sold? Is nine months from now okay? Or are you unable to close your new home if your current home has not been sold within nine weeks? What are the consequences and financial consequences if your deadline is not met? Time is an FSBO’s friend.

As of October 2008, the average marketing time for a mid-price home listed by a real estate agent in the Tucson Multiple Listing Service (MLS) was 78 days. This time varies considerably by location and price range. Ask Gold Valley Realty what the average is for your neighborhood. In general, it takes about twice as long for an FSBO to sell their home as it does for a real estate agent with MLS access. In both cases, add the normal period of 30 days from contract negotiation and acceptance to final closing of the deal.

The name of the game in selling a home is getting as many qualified buyers through the door as possible. Who is a qualified buyer? Someone who can afford your house! Someone who demonstrably has the money or financing available to buy your home. Realtors quickly learn to qualify their buyers before spending a lot of time on their behalf. You should too.

Speaking of brokers, will you “work” with them? That is, if they bring the buyer who eventually buys your home, are you willing to pay them? If so, how much? The vast majority of homes listed in the MLS offer a three percent fee of the sale price to the buyer’s agent. In my experience, about 90% of FSBOs offer buyer agent compensation.

How do you plan to get qualified buyers through YOUR front door? Different methods are discussed in detail below.

What is your marketing budget? When and what will you spend it on?

Who will negotiate and draw up the contract for the sale of your home? Who will monitor escrow to quickly identify and resolve potential deal breakers?

Tip 2 * Price your home correctly.

This obvious step will have the biggest impact on the success or failure of your temporary career as a FSBO (For Sale By Owner). But for most FSBOs, this can also be one of the most challenging actions.

The market value of your home is what a willing and able buyer is willing to pay you for it.

How much a buyer is willing to pay for your home depends on his personal circumstances and motivation; available competitive properties in your area; and the prices of recently sold comparable homes in your area. Information on competing properties and recently sold “comps” is available from a variety of sources. We strongly recommend that you have a professional appraisal done on your property. That will cost you about $300. Having an objective appraisal has several benefits, not the least of which is that you can offer your buyer a highly defensible price that has been determined by an independent expert.

There are situations where it may be more important to you to sell your house quickly than to get every last dollar out of your house. In this case, you may want to price your home a few percent below its appraised value. However, if time is a serious consideration for you, it’s best to list your home with a realtor. One of the added benefits of a Gold Valley Realty listing is that we will reimburse you for the closing valuation! Even if you had the appraisal done while you were FSBO.

Tip 3 * Marketing material

By far the most effective marketing tool is the yard sign! Make yours look professional. Search for a sign company in your city. Buy one of the information tubes that hang under your garden sign and put brochures in it.

Your flyer should include at least one color photo and highlight the facts about your home, especially asking price, number of bedrooms, square footage, special features and schools.

See also  Why is my home insurance replacement cost higher than market value?

Ask if you can post your flyers at nearby supermarkets, churches, schools, apartments, health clubs, country clubs, golf courses, travel agencies, insurance companies, beauty salons, title companies, mortgage companies! Give some to your friends and neighbours, too.

Publish your home information on the worldwide web. More and more home buyers are using the internet as a valuable source of information.

Newspaper ads can be somewhat helpful, especially when used in conjunction with open houses.

Tip 4 * Furnish your home to show

As the old saying goes, you only have one chance to make a first impression! Make sure it’s a good one. Make sure your front yard looks good. Is the handle on your front door showing signs of age? Replace it. Make sure your home is clean and tidy. Open all curtains, blinds and shutters. Turn on every light in the house, day and night. A sparsely furnished room shows better than a cluttered room. If you’ve accumulated a lot of extra stuff over the years, put it away! You’re moving soon anyway. Does your house pass the sniff test? If you have pets or smoke, this may not be the case. In that case, replace your carpets or deodorize them professionally. If you have an open house, bake some bread or cookies to make your house smell great.

Tip 5 * Security & Show your home

You can show your property by appointment or by holding an open house. Making appointments can be difficult if you are not usually available to answer the phone number on your advertisements and fliers. You might consider using a voicemail or live answering service (starting at about $35 per month) to handle your ad calls instead of using your home phone. This also offers some security benefits.

It is unlikely, although unfortunately not impossible, that criminals will take this opportunity to steal your belongings or hurt your family. A little preparation can go a long way in minimizing that possibility.

Consider renting a locker to store your valuable jewelry, coins, guns, stamps, and memorabilia. Make a list and film the contents of your home and keep them in your safe or at work. You should also hide cash and prescription drugs in an unobtrusive place before showing your house.

Have your partner, friend or neighbor with you when you show them your house. If the “buyer” makes you nervous or acts suspicious, ask them to leave.

Tip 6 * Collaborate with purchase brokers

Virtually all homes listed for sale in the Tucson Multiple Listing Service (MLS) have a standing partnership offer for a commission of three percent (3.0%) or more to the real estate agent who ultimately procures the buyer. You may want to make the same offer to brokers who contact you. Why?

Most home buyers already work with a real estate agent, or will do so soon after their home search begins. Why? They can get professional representation for FREE, as the buyer’s brokerage commission is paid by the home seller. This means that a buyer can have an estate agent screen properties for him, make arrangements, accompany him to appointments, advise him on the market value of a property, write the offer, negotiate with the seller (or his estate agent), escrow, being there for inspections, resolving any issues, coordinating with the other companies involved (mortgage company, home inspectors, escrow, property insurance), reviewing final documents for contract compliance, and being present at closing, all FREE. So why would a buyer buy a house without a real estate agent working for him?

Tip 7 * Pre-qualify potential buyers

The buyer’s failure to qualify for a loan is the most common cause of an FSBO deal falling apart.

Brokers pre-qualify their buyers with a lender before spending a lot of time and effort on them. I will personally meet a buyer for an initial consultation whether or not they are pre-qualified, but I will not proceed until I know they can get financing or pay cash. I certainly recommend that you do not enter into a contract with a buyer until you have independent confirmation of their ability to obtain financing or pay cash. Ask for the name and phone number of their loan officer. Call the loan officer and explain the situation; ask him or her if the buyers can qualify for a mortgage sufficient to purchase your home.

Tip 8 * Use professional contracts

The contract used by nationwide brokers has evolved over time and covers almost all contingencies and disputes that have occurred in the past. I strongly recommend that you use this contract instead of a generic DIY real estate contract. Arizona has unique laws and customs about selling real estate. A contract that is useful in another state will not be optimized for use in Arizona. If you’ve found a buyer and want to draw up a contract, contact a local real estate agency and see if you can get a copy of a blank contract.

See also  Owner Operator Insurance - Non-Trucking, Bobtail & Unloaded liability definitions and impact

Tip 9 * Keep a close eye on Escrow

You are almost there! You found a buyer, negotiated and signed a contract and opened escrow with a reputable title company. Actually, there is still a lot to do before you sign the deed with the title company and collect your money.

The buyer is normally entitled to carry out any inspection they wish in the first 10 days or so after acceptance of the contract. If he finds problems with the house, the roof, appliances, heating, cooling, plumbing, etc., he can either cancel the contract or ask you to repair or replace the defects. This can be an annoying situation. As a seller, you may feel that the buyer is asking too much. This is something that can be negotiated, but it must be done diplomatically. Try not to let your pride and emotions get in the way of your ultimate goal of selling the house.

Receive written approval of a conditional loan (CLA) from the mortgage company within the first 10 days of contract acceptance. This is much stronger than a verbal “pre-qualification”, and means your deal is more likely to close. Contact the mortgage company about 5 business days before closing; make sure their documents are available to the escrow company at least one day before you need to sign the final paperwork.

Tip 10 * Close Escrow

One final note on closing. The closing of a home sale in Arizona is defined as the documents being registered with the County Recorder’s Office. After the buyer and seller have signed, the loan package must be returned to the mortgage lender for final inspection. The mortgage company will then actually transfer money to the escrow company. Only then can the escrow company send an agent to the County Recorder’s Office and record the sale. The bottom line is that you sign the paperwork the day before the actual closing.