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61 Helpful Hint For Fsbo

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If you decide to go it alone, Here are some tips for you! Feel free to call or email with questions.

If you decide to go it alone, Here are some tips for you! Feel free to call or email with questions.

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    61 Helpful Hint For Fsbo 61 Helpful Hint For Fsbo Document Transcript

    • When a home is made available to the marketplace, there are six factors that will determine whether it will or will not sell. They are the asking price, the financing available to potential buyers, the condition of the home, its location, the marketing tools put in place to attract buyers and the market conditions in the area where the home is being sold. For a home to sell with the fewest inconveniences and for the best possible price, the majority of the above six factors must be in an advantageous position with regard to comparable properties available. If a home does not sell, the fault will lie with one or more of these six factors. In summary, these six determining factors are: PRICE / TERMS / CONDITION / LOCATION / MARKETING TOOLS / MARKET CONDITIONS When a homeowner makes the decision to sell a home, their goal is, of course, to do so with the fewest inconveniences and for the best possible price. To accomplish this goal, the homeowner should divide the process into eight phases. They are preparation, pricing, financing, marketing, display, contract, transaction closing and possession coordination. The following discussion will offer guidelines and helpful hints in each of these eight phases: PREPARATION: 1) Research: Selling a home should not be a process of experiencing first and learning later. Remember, experience is a tough teacher! First you get the test, then you get the lesson. For most of us, our home is our most valuable asset. Selling that asset should not be taken lightly. Take the time to learn the intricate, and often confusing, details of selling a home. Study the subject by reading books, exploring the Internet and attending seminars. 2) Schedule events: Take a few hours to put together a marketing plan. Decide what activities you will implement to expose your home to as many buyers as possible, and plan those activities on a calendar of events. Schedule open houses, advertising, direct marketing mailers, handouts, showing times, etc. Create an action plan and follow your plan. 3) Preparing your home: People buy a home based on its emotional appeal. If the buyer walks in and falls in love, they will most likely buy the home, and at a fair price. Spend some time walking through your home. Look at it from a buyer’s perspective. List the things that detract from its emotional appeal. Make the needed changes and repairs prior to putting the home on the market. (Call me for a copy of our Maximizing Your Home’s Appeal checklist) 4) Know your loan: Call your bank and find out what your mortgage payoff will be. Do you have a prepayment penalty? Is your loan assumable? If so, under what terms? Don’t forget, your mortgage interest is payable in arrears. If you were to close a transaction at the end of a month, your payoff would be
    • more than the balance owed. 5) Prepare yourself mentally: You will have unaccompanied strangers coming through your home. Be ready to have your private and quiet time interrupted. People viewing your home will read your unspoken language. Your attitude toward them will affect their interest in your home. Above all, please be careful! There is no guarantee that everyone entering your home will have honest intentions. 6) Understand the buyer’s mentality: Many buyers purchase a home being sold quot;By Ownerquot; because they think they will be able to buy it for less than they could if it were available through the real estate community. Because you are not paying a brokerage, they will expect to subtract at least an amount equal to a brokerage fee from the selling price. As you know, both the buyer and seller cannot save the cost of the brokerage fee. Prior to putting your home on the market, know how you will handle this concern when it becomes an issue. 7) Instruct your children: Please instruct your children never to allow anyone in to view the property, especially when they are home alone. 8) Personal safety: It is wise to show the property only when more than one adult is at home. FINANCING: Become a loan expert. Educate yourself regarding the various avenues of financing available to buyers. You will want to be able to pass this information on to a potential purchaser. A buyer’s decision to purchase or not to purchase a home, and the price they are willing to pay, are often dependent on the size of the payments and the required initial investment. Shop lenders and/or access various loan programs over the Internet. Know the buyer’s options. Put informational sheets in the house that will tell the buyer what his payments will be with various amounts of down payment. If you can find a way to make the down payment and monthly payments reasonable, a buyer may be willing to pay a premium price for your home. PRICING: This is one of the most important determinants of how quickly a home will sell and whether or not a seller will maximize his selling price. If a homeowner overprices his property, he will most likely end up selling the home for less than fair market value. The key to maximizing a home’s value is to price it correctly. Please, do your research when it comes to pricing. 1) Comparable sold properties: Find out how much homes comparable to yours have recently sold for in your neighborhood. (Be sure to verify the actual selling price. What you hear a home sold for is often inaccurate information.) How do the sold properties compare to your house with regard to amenities and condition? Become familiar with the types of financing that were used. 2) Competing properties available to buyers: Research the asking price of comparable properties currently competing with yours in the marketplace. Price your home to be competitive. 3) Expired properties: You will want to know the asking price of homes like yours that were on the market
    • and did not sell. These “expired” properties will give you an indication of what price would be asking too much for your home. Once again, avoid overpricing. Asking too much could cost you thousands of dollars. 4) The bidding factor: In a very active market, homes priced at the bottom of the marketplace, with proper exposure, often sell for more than those properties that are priced at maximum market value. This happens because low priced homes often attract so many buyers that the sellers receive multiple offers. Multiple offers can create a bidding war that results in a selling price far above the asking price. 5) Ask too much, receive too little: On average, properly priced homes that are on the market for four weeks or less actually sell for near or above full price. As the length of time a home is on the market increases, the difference between the asking price and the selling price also increases. A house that is on the market for four to 12 weeks sells for 5% less on average than the asking price. If a property is available for 13 to 24 weeks, the selling price is 6.5% less on average than the asking price. If a home is for sale for more than 24 weeks, the owner can expect to receive only 90% or less of his asking price. A homeowner who prices his property competitively at the beginning of the marketing process usually receives a greater net profit. A property owner who wants to start high to see what happens or to leave room for negotiating often receives less than the property’s actual market value. 6) The hazards of overpricing include: - Lower buyer response. - Lengthening of marketing time. - Minimization of offers. - Reduction of net profits. - Creation of a “reputationquot; problem. - Limited financing options. - Increased risk of appraisal problems. - Frustration and inconvenience. 7)Your property’s value: The value of a property is determined by the current marketplace, the competing properties available to buyers, available financing, the buyer’s perception of the home’s condition and appeal, the general economic conditions in the area, what buyers have been willing to pay for like properties, and its location. The value of your property is not determined by what you have invested in the home, what you need or want out of the property, a bank or tax appraisal, what you heard your neighbor’s home sold for, its insured value or the cost of the home you want to buy. In summary, homes that are priced correctly at the beginning of the marketing process usually sell for the best possible price and with the fewest inconveniences. MARKETING There is a direct correlation between the price at which a home sells and the number of buyers who view the property. Generally, the more buyers who view a seller's home, the higher the final sales price. If a seller wants to receive the highest possible sales price and endure the fewest inconveniences, he or she must initiate a marketing program designed to attract a maximum number of buyers. More buyers equal a higher sales
    • price and fewer inconveniences. The following are the most effective exposure tools available for marketing homes: 1)The Internet: Approximately 72% of home buyers make at least an initial inquiry on the Internet prior to purchasing a home, and that percentage is increasing daily. In the real estate community, Websites like HouseHunt.com have become incredibly powerful tools to attract buyers. Realtors are finding that Internet quot;leadsquot; are producing the most qualified and best-informed buyers in the marketplace. Market your home on as many Internet sites as possible. Be sure to use the most effective techniques available. Include in your advertisements virtual tours, home tours, open house dates, price, available financing including down and monthly payments, etc. Prepare and mail a marketing package to anyone who inquires about the home through the Internet. Be careful not to include on the site or in this package information that might compromise your safety. 2)TV and radio: These ad sources offer limited success in the private sector. Realtors find radio and TV ads to be effective because they have multiple properties to offer and, with a diversity of property types, they can generate leads. For the individual homeowner, with a single home advertised to create leads, the chances of finding a buyer are slim. However, if you do decide to advertise on TV, be sure to advertise on the real estate channel. 3)Direct mailers: By finding a group of existing homeowners who live in an area that would be considered one step below a seller’s price range and prestige level, and exposing his home to that group, the home seller can often generate buyer interest. This homeowner group would perceive the seller’s property to be a move-up residence. The most effective method of exposing a property under these circumstances is to do a direct mail campaign. The mailer should include a thorough home description, photos, financial details, price, a home tour and contact information. 4)Door knocking: Realtors find it tremendously effective to knock on doors to introduce the availability of a property to neighboring homeowners. A neighbor in the immediate area will often know of someone who would be interested in buying a house in the neighborhood. Talk to at least 50-100 of your neighbors about your home being available. Ask them if they know of someone who might be interested in your property. 5)Open houses: Only one percent of the houses held open actually sell to someone who was introduced to the property at the open house. For an open house to have any chance of being effective, signs must be placed from high traffic areas all the way to the property, the open house should be advertised, invitations should be delivered or mailed to potential buyers and neighbors should be encouraged to tell any one they know, who might be interested in the home, that the home is being held open. It also helps if the open house is unique in its presentation and held at a unique day and time. 6)Signs: For Sale signs are among the most powerful tools in a Realtor’s arsenal. The more signs a real estate company has in an area, the more the phone will ring with inquiring buyers. The same is true for a homeowner selling a property. Place For Sale signs in as many high traffic areas as possible with directional arrows leading interested parties to your home. Be sure your signs are very professional in
    • their quality and appearance. 7)Photo brochures: A professional photo brochure is an important tool for any home seller. These brochures should be very professional in appearance, very descriptive and very accurate. They work well when placed in a display box on the sign in front of the property for drive-bys. They should also be given to buyers who view the property and should be placed in all direct marketing handouts and mailers. 8)Written advertisements: To maximize price and minimize inconveniences, a seller should strive to access100% of the pool of available buyers. To do so requires that the home be exposed in all available printed ad mediums. Local newspapers, magazines (e.g. Homes and Land, etc.), convenience publications, newspaper real estate inserts, organizational and trade publications, etc. should all be used to expose the availability of a home. The ads should be very honest in their description, point out the property’s best features and offer a photo of the property. A lot of nuisance calls will be eliminated if the price is included in the ad. Design the ad to make the phone ring. 9)Walk-in, name recognition, repeat and referral traffic: These are tools available only to the real estate community. This limitation does restrict the For Sale By Owner to considerably less than 100% of the buyer pool. DISPLAY: Because people buy a home based on its emotional appeal, it is important to create an emotional environment when the home is being shown. There are several very important rules for showing a home. Those rules are: 1)Clutter: Remove as much clutter as possible. When a home is cluttered, or when it is packed full of furniture, itwill appear smaller and more cramped for space than it really is. 2)Excessnoise: The TV and radio should be turned off. Let the buyers talk free of disturbances. 3)Children and pets: Send children and pets outdoors to play. This will eliminate confusion and keep the prospect’s attention focused on your home. 4)Light: Leave all drapes open for light and airiness. All lights should be turned on to give the rooms a larger appearance and cheerful effect. 5)Scents: The way a home smells will either enhance or distract from its emotional appeal. To give a home an attractive smell, a homeowner can bake cookies, burn scented candles, heat cinnamon water or put vanilla on light bulbs. 6)What to say: Be courteous but don’t force conversation with the potential buyer. They want to inspect your house, not make a social call. Never try to oversell.
    • 7)Apologies: Never apologize for the condition of your home. 8)Emotions: Do not get emotional if a buyer says something negative about your home. If you get defensive or try to argue the point, only bad things will happen. 9)Features: Stay with the buyer but don’t point out every little feature of the home. Allow buyers to think their thoughts without being constantly interrupted. Have the property’s features written on a presentation sheet that can be handed to the buyer. 10)Questions: Answer questions honestly and briefly. 11)Don’t negotiate: Don’t discuss or negotiate price while the buyer is viewing the home. Let them decide if it is the right home -- the one they want to purchase -- before you begin negotiations. 12)Don’t seem over anxious: If you want to get horrible offers on your home, act like you can’t wait to get it sold. 13)Why you are selling: Buyers will ask why you are selling. Give the buyer an honest, but not too lengthy, answer. They are most likely trying to discover how anxious you are to sell the property. Their line of thinking is that if you are extremely motivated, you may accept a low-ball offer. 14)What you paid: While viewing your home, buyers will ask you what you paid for it. This is information the potential buyer doesn’t need because it has no effect on today’s value. NEGOTIATIONS ANDCONTRACT: The following are some basic rules regarding negotiations and contracts: 1)Emotions: Never allow emotions to get involved in the negotiation process. Once emotions are involved, the negotiating process usually comes to a screeching halt. 2)Pre-qualification: Do not start negotiations until the buyer has a written letter of pre-approval from a qualified lender. 3)Earnest money deposit: How much of an initial deposit is enough to make you feel comfortable with the buyer? If the buyer fails to complete the transaction, be specific as to what will happen to the deposit. 4)Forms: Be sure you have all the contracts, disclosures, forms and addendums required by your state and local governments. Understand well, and complete with extreme care, every one of these contracts, disclosures, forms and addendums. Because the amount of paperwork required to close a transaction has increased dramatically over recent years, a seller and buyer are wise to seek professional help in completing it. A few dollars spent at this stage of the selling process can save thousands of dollars in attorney’s fees later. 5)Contingency offers: Exercise care with contingency offers. If you accept a contingency offer, one
    • contingent on the sale and close of the buyer’s home, consider including a time-limited first right of refusal in the contract. 6)Contingencies in the offer: Consider time limits on all contingencies (e.g., transaction close is subject to the buyer’s approval of a home inspection). Be sure the contract is written to remove all contingencies in the shortest time possible. 7)Disclosures: Be thorough with all required disclosures in the contract (e.g., environmental hazards, non- permitted structures, zoning conflicts, HOA issues, flood and earthquake, geologic conditions, etc.). 8)Closing and possession: Being very specific in the agreement about the closing date and time of possession will eliminate many problems that can occur. 9)Closing costs: Be specific as to who is responsible for closing costs. 10)Limiting expenses: A seller would be wise to put a ceiling on the costs of required expenditures for corrective work that may result from the home inspection, pest control and other reports. 11) Disclosures: Be thorough, honest and accurate when completing all disclosure statements. 12) Home inspection: Consider having the buyer do a home inspection. It may eliminate, or at least lessen the severity of, a nasty lawsuit after the closing. 13) Final verification of condition: A buyer walk-thru just days prior to the close to verify the property’s condition is often advantageous. It should be worded so as not to be a contingency. 14) Exclusions: Any item in the home that maybe considered a fixture but will not be included in the sale should be excluded in writing in the contract. 15) Proration of property taxes and other items: Be specific in the contract as to what date items will be paid and how all items that need to be prorated will be handled. 16) Home warranty: A home warranty can be one of the most inexpensive, effective and tension-reducing insurance policies available anywhere. Consider providing a home warranty for the buyer. Be sure you and the buyer understand what coverage is provided by these policies. TRANSACTION CLOSING: Once a buyer has been found for the property and the contract is completed, the activity transitions from the marketing process to the more technical process of closing the transaction. Follow the closing process very closely. It will help you to avoid being involved in a transaction that takes the home off the market for an extended period of time and fails to close. Find and use the services of the best possible service people. They will make the transaction move smoothly to a successful transfer of title. 1)Loan approval: It is wise to call the lender periodically to assure that the loan is being processed
    • expeditiously and that all is going well. 2)Contingencies: Pay close attention to contingency removal dates. Are contingencies being removed on time? 3)Inspections: Are the needed inspections being done promptly? Are the inspection reports being provided on time and are you being kept abreast of any corrective work that may be required? Be sure the buyer is approving all inspections in writing unless silence deems his approval. 4)Closing agent: Call your closing agent at least weekly to assure that your file is progressing smoothly and that all required paperwork is being completed. Is the buyer completing and returning his paperwork promptly? If not, find out why he is not doing so. 5)Deposits: Has the buyer placed the required initial and other specified deposits into escrow? 6)Buyer remorse: It is very common for a buyer to suffer remorse after signing a home purchase agreement. Because of the nature of a real estate transaction, with 30 to 60 days often passing between the decision to buy and the actual closing, buyers have a lot of time to question whether or not they are doing the right thing by buying the home. A home seller needs to be aware of how common this problem is and have a plan to react to the potential problem. 7)Appraisal: If you did not price your property correctly, there is the possibility that it may not appraise at the value needed for the buyer to obtain the necessary financing. Encourage the lender to complete the appraisal process as quickly as possible. Have a list of comparable closed sales, ones that justify your selling price, on hand when the appraiser arrives. If the home does not appraise at the selling price, have a contingency plan in place to resolve the problem. POSSESSIONCOORDINATION: Be very specific as to when the seller is to vacate the property and possession is to be delivered to the buyer. SUMMARY: Hopefully, you have found the above information helpful. It is our goal to offer to you the finest service available in the real estate industry. Please keep in mind that six determining factors will cause a home to sell or not to sell. Once again, those factors are: Price, Terms, Condition, Location, Market Conditions, and Marketing. If a homeowner who wishes to sell focuses his attention on making each of these factors as attractive as possible, he should be successful in marketing his property. Thank you sincerely for giving me the opportunity to offer this service. If there is anything more I can do to help you sell your home, please call. I would very much appreciate having the opportunity to be your Realtor of choice.
    • Once again, I thank you. You are appreciated! The preceding is not to be considered legal advice. It is simply a group of helpful hints. Recipient accepts the same understanding that it in no way creates an obligation or responsibility on the part of the giver. Recipients should make their own determination as to whether or not the suggestions offered should be incorporated in their selling process. We strongly recommend that anyone who is selling a home, without the assistance of a real estate professional, seek the advice of a competent attorney. Presented by: Scott and Dana Carrier CRS,GRI,ABR Keller Williams Realty 901-219-8552 Cell 901-221-5100 Office www.CarrierTeamRealty.com scott@carrierteamrealty.com