How To Sell Your Home By Owner and Save Money

How To Sell Your Home By Owner And Save Money!

Introduction

I am a licensed Broker, REALTOR with a large national chain. I have sold real estate for nine years and have had a ton of satisfied customers. That is because I am a straight-shooter and tell it like it is. It's also because I get my clients' homes sold for the best possible price, in the shortest amount of time, with the least inconvenience to them. That's what I hope to teach you to do in this article.

Many people try to sell their homes by owner and approximately 90% of them are unsuccessful for one reason or another. The remaining 10% usually have a property that is so hot it doesn't need an agent to market it; these are homes located in very popular areas that have multiple potential buyers and bidding wars. These sales are also in jeopardy because most people have little or no experience selling real estate, and marketing and getting a contract on a property are only the beginning. If you're reading this article, you're probably one of them. In nine years I have listed or sold over 50 properties. I have been in just about any real estate situation you could imagine. Finding a solution to problems and getting results is my forte. Read on to learn how to get your home sold. Just keep in mind that it's really work. Realtors don't get paid for just sticking a listing in the MLS and letting it sit there until it sells. Those are the listings that very often expire and end up going to another agent who's a go-getter and willing to knuckle down and work to get it sold. If you're willing to put forth the effort and able to devote the time, you just need the knowledge. Let's get started.

Chapter 1:

Getting Your Home Ready For Sale

Getting your home ready to put on the market isn't rocket science. Fix things that are broken, especially if they are a safety issue such as furnace problems, etc. Keep everything clean, clean, clean! I know what you're thinking: but we have kids (or pets or whatever) and there's no way I can keep my house perfectly clean ALL THE TIME! The way you live in your home the rest of the time and the way you live in it while you're showing it to potential buyers are two different things. Your motivation to keep it clean is the knowledge that if you do everything right you will very shortly move on to your next home (or adventure, or whatever).

As far as the exterior of your house is concerned, keep the grass mowed in summer and the driveway and walks clear of snow and ice in the winter. Pick up anything lying around outside such as lawn tools, toys and newspapers. Sweep your front walkway to make it inviting for buyers. For the interior, pick up toys and shoes, MAKE YOUR BEDS, and put clothes away. I can't tell you how many times I showed one house after another that had unmade beds and clothes strewn all over the bedroom and bathroom floors, and the buyers never made offers on those properties. Realtors have a habit of showing pig-sty's first and homes in pristine condition last. The buyers are so relieved at the sight of cleanliness and order that they often make offers on one of the last homes they see.

Make sure your bathrooms are perfect. No one wants to see toothpaste in the sink and hard water deposits on the faucet. God forbid someone should look in the toilet and see anything there except clear water. You should set out guest towels and soaps. They make the bathroom smell great and give the buyer the impression anyone could drop by anytime and the house would be ready. Try to dust every day. I know, I'm crazy but the more you get in the habit of doing every day, the less likely a short-notice showing appointment will have to be denied because the house isn't in order. And the way to get your home sold for the most amount of money in the shortest amount of time, which usually spells less inconvenience for you, is to get as many people as humanly possible to see it.

We might as well cover this now rather than later. Husbands are expected to chip in and help out with all this extra work. We all know that women, especially working mothers, have very little time as it is. Adding this extra work to their schedules won't make them your friend. If you want to really impress your wife, do some of this extra work without being asked. Someday when she has time she'll show you how much she appreciates it. It's always good to store up a little goodwill for when you may need it in the future.

While you're dusting everyday, try to vacuum and straighten rugs too. Try not to put anything in your wastebaskets. That way you won't need to empty them. We all know what wastebaskets are for but I have seen a large number of buyers peer into bathroom or office wastebaskets to see what's inside. If it's empty they think you're really on the ball.

You could set your table with place settings but I personally feel this is a little too contrived. A vase of pretty (not dead or dying) flowers will do. A chess game (or something to that effect) out on a table gives a buyer a feeling of hominess.

Open your shades and let in as much light as possible. Turn on all the lights, even in the basement, for showings. During good weather open windows to freshen rooms. Keep the TV off and play soft background music. Set the thermostat comfortably. If a buyer thinks you're cheap on the heat, they'll possibly think you're cheap everywhere else, even regular maintenance of the home. Keep pets out of the house if possible. Make certain all pet areas are clean and free of odor.

Keep jewelry, cash, prescription medications and other valuables in a safe place. I've never had a buyer steal anything but it's better to be safe than sorry. We always recommend you leave while your house is being shown, but you are going to be acting as your own agent here and you shouldn't leave anyone alone in your home unattended. Anyone you let into your home should have been pre-qualified by a lender and have told you a good story about their situation. It's nice to believe in the goodness of people, but keep in mind someone may be acting like a buyer to get into your house for a variety of not-so-nice reasons. Anyone who creeps you out or whose story just doesn't jive, don't let them in. Follow your gut instinct. Make sure you have complete information on people before they enter your house, such as name, current address, home phone number, mortgage lender. It couldn't hurt to glance at the license plate on their car either. Sounds extreme but you never know today.

The question you need to ask yourself is would you buy your own home in the condition it's in? Having buyers' eyes will help you spot anything that seems out of place. We all tend to live in our homes day-in and day-out, not paying too much attention to them. Buyers notice EVERYTHING and try to use that information to drive down the price. Head them off at the pass.

Chapter 2:

Pricing Your Property

You've cleaned the daylights out of your home and now it's time to put a price on it. You should start with checking out the Internet, specifically www.Realtor.com. There you can find a wealth of information regarding schools in your area, home sales, active properties for sale (your competition) and much more. Buyers engage in comparison shopping. They will not pay more for one property than they could pay for another, similar one. It's always amazing to me what buyers find important. It's subjective and different for every one. Realistic prices attract buyers' attention. The price your house is marketed at must attract enough attention among buyers to generate showings and offers. Realtors use a rough formula to help determine if a price on a listing is too high. No showings at all and it's way too high. Some showings but nothing spectacular and it's somewhat high. Tons of showings and an offer and it's perfectly priced. Rudimentary I know, but it works for us.

Look for information that reveals what buyers have actually paid for similar homes in your area. Homes that are currently for sale are competing for buyers' attention right now. Homes that did not sell demonstrate what buyers have not been willing to pay under current market conditions. Determine whether your area is a buyers' or sellers' market. This will affect your marketing campaign.

There are several risks to overpricing your home. These include losing potential buyers, missing peak selling activity and buyers failing to obtain financing. The higher the price above realistic market value, the fewer buyers willing to consider your property. Pricing your property competitively will help attract the greatest number of potential buyers. Missing peak selling activity means that a property generates the most interest among buyers when it first goes on the market, and the number of showings are greatest during this time-if it is priced at realistic market value. Starting too high and dropping the price later misses the excitement and fails to generate as much activity. It may even become necessary to drop the price below market value to compete with new, well-priced listings. Lastly, even if a buyer can be found who is willing to pay more than fair market value, it may be impossible for that buyer to obtain financing. Mortgages are based on fair market value. Lenders look at fair market value, not the sales price, to determine the amount they are willing to lend on a property. Lenders rely on independent fee appraisers to verify that the sales price is at a fair market value. When a property fails to appraise, the buyer must make up the difference in cash or the deal will fall apart.

Now I will address an area of pricing that can be somewhat tricky. Some people (and you may have already thought of this yourself) bring in a Realtor to give them a Competitive Market Analysis of their home. In most areas of the country this service is free. We consider it the price we pay to try to get your listing. But if you already know you are going to sell By Owner it is unethical to take advantage of an agent in this way. The only way you can justify it is if you set a timeframe to sell By Owner and after that time passes, if your house hasn't sold, you agree to list it with that agent. What you ultimately do is, of course, up to you, but taking advantage of someone just to save money is generally not a good idea. Off my soapbox now and on to the next subject which is: Marketing

Chapter 3:

Marketing

Since you just created a market analysis for yourself and have determined how you will price your house, we can move to Marketing. Marketing your house By Owner consists of a calendar of marketing events you set up for yourself. These include advertising (including signage), direct marketing, website listings and open houses.

Advertising

You need a great sign for your front yard, not some flimsy piece of junk from the local hardware store. Try looking online for one and then install it prominently in your front yard to catch people's eye as they drive by. Putting By Owner signs at busy intersections around your house can't hurt either, but remember to write VERY LARGE on these signs, as cars are usually driving by and people can't read that fast. You also need to identify the best local paper you have and write an ad to appear in that paper's property section. Sunday is usually the best day and generates the most response. Your area may have additional venues to advertise in that may be appropriate. Just remember that all this advertising costs money month after month and the longer your house takes to sell the more expenses you incur. Agents usually incur those expenses when you list with them. You don't want to advertise it forever and have nothing to show for it. I recommend a four-month timeframe. If your house hasn't sold in four months your price is too high or the condition isn't great.

Direct Marketing

Direct Marketing can consist of postcards that are mailed to the 100 or so homes closest to you geographically. Most people can create a Word document on their computer and print the cards out on Avery perforated postcards. Include the address of the property and a way to reach you if they know of a potential buyer. Many people have friends or family that say "If you know of any houses in your area that become available, let us know." Hand-write them if you don't have access to a computer. I believe postcards currently mail for $.24. Twenty-four bucks isn't bad, especially if it spurs phone calls, showings and offers. You also have the option of sending out additional direct marketing cards to certain profiles of financial ability and lifestyle needs. For example, if you have a ranch perfect for empty-nesters, market to areas that you know contain older people. Just be careful that you never, in any communication of any kind, require a certain type of buyer. Discrimination on any basis is against the law, and it's just as unlawful to say it as it is to write it. Whoever has the means and inclination to purchase your home must be allowed to do so. But you can focus on specific buyer groups (retiree, first-time home buyer, equestrian, resort, etc.) who are likely prospects for your property.

Website Listings

Website Listings are necessary since you won't be listed in the MLS. You need a website like BuyOwner.com or one of the many clones. You provide a picture (make sure it's good) and a description. Search the web for additional sites. Just keep track of your expenses. Again, I recommend committing to nothing longer than four months.

Open Houses

As an agent I rarely hold Open Houses because they usually don't sell houses. But since I can't guarantee that your home won't sell through an Open House and since you also need the extra exposure, I say do them. Find out what time agents in your area hold their Opens and hold yours at the same time. Make sure you advertise it and put out a lot of signs, especially in your front yard. Flags are helpful, too. Some areas have rules regarding when you can post Open House signs so check with your municipality. I once had three signs stolen 10 minutes after I put them up, so check to make sure they're still there the next day, and have spares available just in case.

Chapter 4:

Offers, Negotiating and Contracts

Usually, when you receive an offer to purchase your home, it will come from an attorney since you and the buyer won't be working with agents. Agents use offer forms approved by our local Association of Realtors or attorney board. These are broad offers that cover many types of property but also spell everything out. When you receive an offer, it's just that, an offer. You usually have the option of accepting the offer as is, rejecting it or countering it. 90% of offers are countered. Just about any part of the offer can be countered, including the price, closing date, earnest money, points, etc. After you counter, the buyer also has the same three options, usually with a set amount of time to respond. Please keep in mind each offer form may have different timeframes for different parts of the form. Countering can go back and forth until you both have a meeting of the minds. At that point, both the seller and buyer need to sign the offer and date it, and it becomes a contract when you both have completed signed copies in your possession. Work with your attorney to determine what your seller expenses will be. Many areas require transfer tax stamps to be purchased, proof of utility bills paid, property taxes prorated to the day of closing, etc. He or she should be able to provide you with a net proceeds of sale. They will also fill out the appropriate paperwork that you will need to sign at closing.

Keep in mind that many people will have a home to sell in order to purchase yours. Very few people today buy homes non-contingent. You need to decide whether you will accept this contingency and, if you do, for how long. Every area's paperwork regarding this is different so consult a good real estate attorney. I have never worked with anyone who did not have an attorney representing them in a real estate transaction. Many people hate lawyers, but isn't $300-$500 a small price to pay for legal assistance in the largest financial transaction you will probably ever participate in? If you do accept a sale contingency, keep in mind that you can continue to show and market the house as long as the contingency offer says this in writing. If you continue to show it and come up with another buyer, you can negotiate with that person but they can't take first position in the deal until the original buyers drop their contingency or drop their contract. Consult your attorney for more specific information.

Chapter 5:

Miscellaneous Information You May Find Useful

Where buyers first learned about a home they purchased:

49% Real Estate Agent

15% Yard Sign

8% News Ad

8% Friend/Neighbor/Relative

4% Builder

4% Internet

3% Home Book/Magazine

3% Knew the Seller

2% Open House

4% Other

(Source: The 2000 National Association of Realtors Profile of Home Buyers and Sellers).

A Word of Caution

In order to maintain the strongest negotiating position, I recommend that you do not discuss the following information with buyers or anyone else.

Reason for selling

Urgency to sell

Willingness to consider an offer less than listing price

Financing terms you would accept

Personal property you might be willing to include

Any other confidential information

A Few Facts About Selling Your Home or The Last Word on Selling Your Home

Price is the determining factor in the sale of any commodity.

Sellers and Realtors are not appraisers - buyers are...and they buy only by comparison - as you will when you purchase your next home. Condition and price are the only criteria.

Banish emotion and anxiety from your mind. Sellers speak of value, amount invested and how much they need to net. Buyers consider only price, condition and OTHER PROPERTIES OFFERED. Sellers sell homes - their past experience - while buyers buy houses - their future concern.

Your home will sell only because it is better than its competition - not because it is yours.

Overpricing causes your home to become "Market Dated" Buyers begin to wonder what is wrong with it. Why hasn't it sold?

Much fiction occurs regarding the price your neighbor received.

Your present total investment has no effect on what your buyer is being offered elsewhere.

Any house not sold after 120 days on the market was overpriced for its condition, on today's market. Our present market may be weak or strong, but it's today's market...the only one available.

Fairy tales and overly optimistic self-assurance won't sell your home. Effort will. Just a sign in your yard won't sell your home. Proper counseling will. If you are placing you r home on the marketing be certain it is on the market. If you want your home listed for sale, overprice it. If you want it listed to SELL, price it correctly.

(Source: Mike Ferry materials)

Conclusion

Please keep in mind that every location and market is different and this article is intended to provide consultative services and is in no way to be construed as legal advice.

I hope you have found this information to be helpful. Selling a home can be a roller-coaster ride, but it can also be rewarding. If done correctly it can be short-lived and save you money! Good Luck!