Fsbo like a pro


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Learn how to sell your home by owner -- like a Realtor!

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Fsbo like a pro

  1. 1. FSBO Like A Pro
  2. 2. Contents - Introduction……….……. - Pricing………………..…… - Staging……………………. - Photography…….……… - Marketing………………… - Websites………………….. - Contracts…………………. - Negotiation……………… - Closing…………………..... Appendices - Using a Realtor……….… - Adjustments Guide..…. - Useful Websites………… - Examples of Flyers……. FSBO Like A Pro – Duncan Connor © 2009 About the Author Duncan Connor is a Realtor® who lives in Duluth, GA and works throughout the metro Atlanta area. You can find him on Facebook, Zillow, Linked-In and at his office in Duluth. When he’s not working, Duncan enjoys spending time with his wife, Jennifer, and their dog, Murphy. If you have any questions or comments, feel free to email Duncan at duncan@atlantalocalrealtor.com 3 5 13 15 17 19 20 22 23 24 25 26 27 Duncan Connor Realtor ® Findley Real Estate, Inc. 2862 Buford Highway Duluth, Georgia 30096 Business (770) 476-5238 Ext. 229 Cellular (678) 343-1061 Email duncan.connor@comcast.net www.atlantalocalrealtor.com Each Office Is Independently Owned and Operated FSBO Like A Pro
  3. 3. Okay, so you’ve decided to sell your home by yourself. You don’t need no stinking real estate agent, right? Well, before you make that decision, let me take a second to tell you what a real estate agent does to earn their money; and if you’re still committed to selling your home without one, at least you know what you’re going to have to do. FSBO Like A Pro – Duncan Connor © 2009
  4. 4. Let’s think about moms. They’re cooks, cleaners, nurses, teachers, gardeners, friends, dog groomers, and taxi drivers…and most of them also hold down a full-time job. The task ahead of your real estate agent – which in this case will be you – is a little bit similar. A real estate agent must be an appraiser, inspector, educator, interior designer, handyman, landscaper, graphic designer, publisher, tour guide, local historian, economist, financial manager, call center agent…you get the idea. The last thing to consider right now is that a real estate agent will usually do all the work to sell your home without getting a cent in return, until you get to the closing. If you plan to do all this work yourself, you should understand that a lot of it will hit you in the pocket. FSBO Like A Pro – Duncan Connor © 2009
  5. 5. <ul><li>Selling your home comes down to two main factors: </li></ul><ul><ul><ul><li>Price </li></ul></ul></ul><ul><ul><ul><li>Exposure </li></ul></ul></ul><ul><li>Those are two little words that make a huge difference. If your home is overpriced it may sell…eventually. Or it may not. And even if you get offers on your over-priced home, you are dependent on a property appraiser agreeing with your assessment so that potential buyers can get a loan. </li></ul><ul><li>Exposure is all about getting your home out in front of people who might be interested in buying it. Sure, you can stick a red and white FOR SALE sign in your yard, but then what? That sign is only visible to people who pass it. What you need is a sign that’s visible to people who aren’t standing in front of your house. </li></ul><ul><li>Remember, too, that many real estate agents won’t show homes to their clients if the seller is not offering to pay a commission to them. If you really want to sell, you should think about paying that 3% commission to the buyer’s agent. </li></ul>FSBO Like A Pro – Duncan Connor © 2009
  6. 6. Pricing Let’s say that you bought your house for $150,000 seven years ago, and you think that property values have increased by 20% since then – so your home must be worth $180,000 now, right? Maybe not. If you’re pricing your home, you need to think about the assumptions you make. For example, why do you think that the value has seen a 20% increase? On the next few pages I’ll show you the steps a realtor takes to value your home, and you can do the same thing. FSBO Like A Pro – Duncan Connor © 2009
  7. 7. <ul><li>Find comparable properties that have sold in the last six months. They need to be close to your home, be of similar size, and if you can find homes with the same number of bedrooms and bathrooms that will make things easier. </li></ul><ul><li>If the homes you have selected are very similar, take the average sale price as the basis price. If there are significant differences, take the middle sale price as your basis price. </li></ul><ul><li>Make a list of the major features – I’ve included a list at the back of this guide for you to use. If your home has something that one of the others doesn’t, add the estimated dollar amount for that feature. If one of the other homes has a feature that your home doesn’t, subtract the estimated dollar amount. </li></ul><ul><li>Add and subtract the dollar amounts from the basis price. That dollar amount is going to be close to the your list price. </li></ul>Pricing FSBO Like A Pro – Duncan Connor © 2009
  8. 8. As you can see, if the comparable property has something that is “better” than your home, you’re making a downwards monetary adjustment of that property. The idea is to adjust each property so that each feature is the same as yours or has an adjustment to compensate for the difference. Based on the information above, the average adjusted price of your home should be around $194,650. However, there is another important factor to consider… FSBO Like A Pro – Duncan Connor © 2009 Your Home Comp #1 Comp #2 Comp #3 Price TBD $ 189,750 $ 204,000 $ 196,200 Bedrooms 3 3 4 3 Bathrooms 2 2 2.5 2 Lot Size 0.14 0.14 0.2 0.2 Stories 1 1 1 2 Construction Hardiplank Wood Hardiplank Hardiplank Garage 2-car 2-car 2-car 1-car Fireplace 1 1 1 0 Your Home Comp #1 Comp #2 Comp #3 Price TBD $ 189,750 $ 204,000 $ 196,200 Bedrooms 3 $ - $ (8,000) $ - Bathrooms 2 $ - $ (3,000) $ - Lot Size 0.14 $ - $ (2,000) $ (2,000) Stories 1 $ - $ - $ (5,000) Construction Hardiplank $ 5,000 $ - $ - Garage 2-car $ - $ - $ 8,000 Fireplace 1 $ - $ - $ 1,000 Adjusted Price $ 194,650 $ 194,750 $ 191,000 $ 198,200
  9. 9. FSBO Like A Pro – Duncan Connor © 2009 The sale price of other homes is only part of the puzzle. With so many homes on the market, it’s important that you price your home to compete with everything. If your neighborhood has a lot of foreclosures that’s who your competition is. It doesn’t matter to a buyer if you’ve taken good care of your home and lived there for twenty years, while other homes need new carpets and paint, and the former owners lost their jobs. All that matters to buyers is: how much do I think this home is worth? If your home is priced at $15,000 more than a neighboring foreclosure, is your home really worth $15,000 more? I know it’s not fair, but when the supply of homes is so large, if your home is over-priced, buyers are more likely to decide that they can get something comparable at a better price for them – and you’ll lose the buyer. So in addition to sold homes, you need to take a look at the price of homes like yours which are currently for sale.
  10. 10. FSBO Like A Pro – Duncan Connor © 2009 When we looked at the sold comparable properties, we estimated that your home could sell for $194,650. However, that calculation is based on the past, and you’re selling your home now . Looking at the table above, you can see that Comp #5 is very similar to your home, and it’s on the market for $169,900. Maybe it’s a foreclosure, maybe the seller just needs to get out from under the mortgage…but it is still on the market, which means that for some reason, buyers are not prepared to pay even $169,900. Since you now know that, how likely is it that a buyer will pay $194,650 for your home? Not very likely, right? So to be competitive you need to decide how low you can go in order to sell. Remember that every month you stay in the property will cost you another mortgage payment and tax and utilities. If you pay $2,000 every month for those, wouldn’t it make sense to reduce your price by $5,000 to sell the property three months sooner than if you don’t drop the price? Your Home Comp #4 Comp #5 Comp #6 Price $ 194,650 $ 182,500 $ 169,900 $ 199,900 Bedrooms 3 3 3 4 Bathrooms 2 2 2 3 Lot Size 0.14 0.2 0.14 0.14 Stories 1 1 1 2 Construction Hardiplank Hardiplank Hardiplank Hardiplank Garage 2-car 2-Car Carport 2-car 2-car Fireplace 1 1 1 1
  11. 11. FSBO Like A Pro – Duncan Connor © 2009 A final note about pricing, for now, is that you need to cover your costs. That may sound like a great big “duh”, but if you find out that the price you can reasonably expect to get for you home is less than you owe, you have a big question to ask: Do I need to sell, or do I want to sell? If you need to sell due to some financial or other problems, you should call your mortgage lender first. They may have programs in place that can help you. If you want to sell your home, now may not be the best time. Unless you want to go to the closing and hand a check over to your mortgage lender, you might want to hold off until the market comes back up a little (or a lot). Costs you should take into account will include 3% to the real estate agent who finds you a buyer – they’ll expect to get paid for brokering the deal. You may also be expected to pay up to 6% of the sale price in closing costs assistance to the buyer. While you can add that 9% onto the price, remember that you have to remain competitive – adding $18,000 to a $200,000 house will just reduce the number of buyers who want to look at your house.
  12. 12. FSBO Like A Pro – Duncan Connor © 2009 Let’s say that you live in a cul-de-sac in the back of a nice subdivision. You decide to sell your home buy yourself and stick a FOR SALE sign in the yard. How many people do you think will see your sign? That’s right, just the people who live in your cul-de-sac, or people who got themselves lost in the subdivision. Next, ask yourself: how likely is it that one of my neighbors wants to buy my house? Or that they know someone who might want to buy my house? Those are some pretty long odds you’re playing. You need to get your home out in front of people who are looking for a home to buy, which means you need to put it on the internet. There is a headache-inducing number of real estate websites out there – from zillow to hotpads to kijiji to trulia to craigslist…to name only some of the most popular. If you decide to sell your home by yourself, you’re going to need accounts at all of these websites, and time to update them at least every other day. Oh yes…almost forgot. You’ll need an ad to post to them so buyers can see what it is you’re selling, and you need some photos, too.
  13. 13. FSBO Like A Pro – Duncan Connor © 2009 Staging If you’re thinking of selling your home you’ve probably seen a show or two on HGTV, or visited HGTV.com, that concerns itself with home staging. Georgia Interior Solutions are professional home stagers, and they have been nominated for Professional Stager of the Year for two years running. No, this service isn’t free, but for a reasonable investment you can get an experienced interior designer to advise you on how to show your home’s best features in a way that really grabs the attention. The photos below are provided courtesy of Georgia Interior Solutions.
  14. 14. FSBO Like A Pro – Duncan Connor © 2009 In 2005, StagedHomes.com published a report that revealed that staged homes sell for almost 7% more than homes that aren’t staged. There are many books available to help you, but there are a couple of approaches that most stagers adopt. One is to stage the whole house, which can be time consuming and potentially expensive; the other is to stage key areas, like the entrance and the living area. The idea of key staging is to create a positive first impression that draws buyers into the house. Most will also recommend that you depersonalize – remove personal pictures and knick-knacks. Since you’re selling your house it can probably be safely assumed that you plan to move. So pack those things away, you’re going to need to do it sooner or later.
  15. 15. FSBO Like A Pro – Duncan Connor © 2009 While it’s not necessary to stage your home, it is important to make sure it’s clean and uncluttered and lets in as much daylight as you can. If you can’t get a lot of daylight in, use multiple low-wattage lamps rather than a single bright light source. The goal is to enable you to take the best photographs possible, since those pictures will be prominently displayed on your flyers, and online in your ads. If you have a talent for digital image manipulation, you should know that panoramic pictures can be especially powerful. With panoramas, this picture can become… … this one
  16. 16. FSBO Like A Pro – Duncan Connor © 2009 The great thing about digital photography is that you can take tens, or hundreds, of photographs without spending a small fortune on processing costs. When you’re photographing your home, remember that buyers will expect that you have a tub, a potty and at least one closet – so unless they’re spectacularly interesting, you probably don’t need to photograph them. Additionally, people spend most of their time in the family room, the kitchen and the bedroom. Along with exterior photos, those rooms should be the focus of your photographs. For exteriors, bright, overcast days give you better light than very sunny days, and you should try to take pictures with the sun behind you. If your home faces east, photograph the front in the morning and the back of the house in the evening. This will ensure that the shadow of the property is cast behind the building as you take the photographs.
  17. 17. FSBO Like A Pro – Duncan Connor © 2009 <ul><li>Marketing </li></ul><ul><li>When you put that FOR SALE sign in your front yard you’re going to put a flyer box out there, too. Which means you need flyers. </li></ul><ul><li>Flyers do four things: </li></ul><ul><ul><li>Photographs to grab attention </li></ul></ul><ul><ul><li>Highlight the features of the home </li></ul></ul><ul><ul><li>Describe by this home is a great buy for the price </li></ul></ul><ul><ul><li>Let buyers know how to contact you </li></ul></ul>While your flyers are unlikely to produce a buyer, they’re good for buyers to take away if they drive by your home while touring the neighborhood. The thing that should send buyers to your neighborhood is a good web presence. There are many pieces of software you can use to create a flyer, but something like MS Publisher or PowerPoint are easy to use and produce great results. Examples of professional flyers can be found all around your neighborhood, but I’ve included some at the back of this book. If you plan to pay a commission to any realtor that brings a buyer, make sure you advertise that fact. Simply state: “3% Selling Realtor Commission Honored”.
  18. 18. FSBO Like A Pro – Duncan Connor © 2009 That means that once you have created a flyer, or an online ad, you should email it to everyone you know, and ask that those recipients send it to as everyone they know. There’s a good chance that your buyer will get one of those emails. In a 2008 study, the Georgia Association of Realtors found that half of FSBO homes were sold to someone that the seller already knew, or that the buyer was referred to the seller by a mutual friend.
  19. 19. FSBO Like A Pro – Duncan Connor © 2009 Websites There are some great sites you can post information on – too many to write individual how-to guides here. Some sites, such as vFlyer and postlets will provide HTML code for you to post your flyer to ad sites like craigslist and backpage . If you post your listing on craigslist, you can re-post it every 48 hours to keep it near the top of the ads. zillow , hotpads and trulia all allow you post information about your home which is available for buyers to view. Some sites provide traffic tracking statistics so you can see how many visitors have clicked on your ad. Once you have an online ad, it might be worthwhile purchasing a domain name like www.123mystreet.com, which you can use on flyers. Simply sign up with a company like GoDaddy and redirect users who go to 123mystreet.com to the URL for one of your online ads.
  20. 20. FSBO Like A Pro – Duncan Connor © 2009 <ul><li>Contracts At some point you’ll get an offer. Most probably it will be less than you want, but you’re going to need to understand what it is you’re looking at. </li></ul><ul><li>A contract has several key points to consider: </li></ul><ul><ul><li>Selling price </li></ul></ul><ul><ul><li>Closing date </li></ul></ul><ul><ul><li>Request for closing costs </li></ul></ul><ul><ul><li>Method of Financing </li></ul></ul>All of those things are important, but for you the most important thing is likely to be the dollar amount that you’re going to net. However, the method of financing needs your attention because it will tell you that the sale is contingent on the buyer obtaining financing with very specific terms. At the time of writing, the buyer is required to make a minimum down payment of 3.5% of the sale price, not including their share of closing costs; and that a seller can provide up to 6% of the sale price as a contribution towards buyer’s closing costs. It’s normal practice for a seller to expect the buyer to be able to produce a loan approval letter with the offer, since as a seller you’ll want to be sure that the buyer has the ability to secure financing for the purchase.
  21. 21. FSBO Like A Pro – Duncan Connor © 2009 <ul><li>Contracts A contract will generally include the following, though only the Purchase and Sale Agreement is the only required document: </li></ul><ul><ul><li>Purchase and Sale Agreement </li></ul></ul><ul><ul><li>Seller’s Property Disclosure, signed by the buyer </li></ul></ul><ul><ul><li>Financing Contingency </li></ul></ul><ul><ul><li>FHA Loan Exhibit (if the buyer is obtaining an FHA Loan) </li></ul></ul><ul><ul><li>Appraisal Contingency </li></ul></ul><ul><ul><li>Buyer Loan Pre-Approval Letter </li></ul></ul>
  22. 22. FSBO Like A Pro – Duncan Connor © 2009 Negotiation The key to negotiation isn’t that you get all your own way, or that the other guy doesn’t get what he wants - any good negotiation will end with both parties feeling like they got most, if not all, of what they wanted. Before you begin to negotiate you should know what the lowest amount you can accept is, and that if you don’t like the deal on the table, and the buyer isn’t working with you, you can end the negotiation. If you do end the negotiation, be aware that they buyer may not come back to you, and you may lose the deal for good. Chances are, you’re going to be asked for more than you want to give away, but remember that both you are working towards selling a house you want to sell to a buyer who wants to buy it. Finally, while you have years of great memories of living in your home, the buyer doesn’t. For them it’s just a purchase, the memories will come later; and if it’s not in the home you’re selling, it will be in a home someone else is selling. The buyer isn’t buying your memories, and you’re not selling them, so don’t take the negotiation process personally – it’s not, it’s business.
  23. 23. FSBO Like A Pro – Duncan Connor © 2009 Closing In almost all cases, you’re going to be in the office of an attorney or title company. If you recall from when you purchased the home you’re now about to sell, the bulk of the signing is done by the buyer – you’ll only have a few documents to add your signature to. There may be a delay while the financing institution completes the wire transfer to the attorney, and then the attorney will issue checks. Remember that if the buyer used a real estate agent you may have to pay a commission to them, usually that will be around 3%. At the closing you’ll also be expected to turn over any keys, garage door openers, warranty paperwork, transferable bonds…and let’s face it, you’re not going to need it when you leave the closing office.
  24. 24. FSBO Like A Pro – Duncan Connor © 2009 WHY USING A REALTOR® IS GOOD VALUE FOR MONEY Service FSBO &quot;FlatFee&quot; dotcom Realtor A FOR SALE sign in your yard Average 3% payment to a realtor who finds a buyer for your home Your listing on Atlanta's two multiple listing services, the first place realtors go to to find homes for their clients     Your home prominently advertised on 20+ other websites including realtor.com , zillow, trulia, and craigslist     Advertising to out-of-state buyers   The most photos on every website, plus a virtual tour on sites that allow them     Professional Comparative Market Analysis to help you determine your home's market value     Access to up-to-the-minute facts about home sales in your neighborhood and city     A security lockbox to allow your home to be shown while you're at work or on vacation     Professional flyers to market your home     A brochure box to put those flyers in     Targeted marketing to real estate professionals who are working with buyers interested in a home like yours right now     Filtering of unqualified buyers so you don't waste your time showing your home to someone who can't buy it     A skilled contract negotiator in your corner     Assistance with listing and contract paperwork, and an explanation of the closing process and costs     Proactive advice about changes to the market, related legislation and everything that affects the saleability of your home     Feeback from buyers about how desirable your home is, and how to make your property more attractive to buyers    
  25. 25. FSBO Like A Pro – Duncan Connor © 2009 Adjustments Guide This adjustment guide is just a guide. It’s not 100% accurate, but it does provide a reasonable rule of thumb for some popular features. The adjustment required will change with supply and demand – for example, if every home with a full basement was put on the market, the adjustment would decrease considerably. Your Home Comp #1 Comp #2 Comp #3 Adjust Price         Bedrooms         $ 8,000 per bedroom Bathrooms         $ 5,000 per full bathroom Lot Size         $ 12,000 per full acre Stories         $ 5,000 per full story Basement         $ 15,000 for full finished basement
  26. 26. FSBO Like A Pro – Duncan Connor © 2009 Contacts A list of companies and websites referenced in this document. Home Sales atlanta.craigslist.org www.hotpads.com www.trulia.com www.kijiji.com www.zillow.com www.georgiamls.com Staging Georgia Interior Solutions (678) 522-8392 www.homestagingatlanta.com [email_address] Organizations Georgia Association of Realtors (770) 451-1831 www.garealtor.com [email_address] Georgia Real Estate Commission (404) 656-3916 www.grec.state.ga.us Marketing www.vFlyer.com www.postlets.com This guide is copyright Duncan Connor. No portion of it may be reproduced without permission of the author, which will be freely given if you contact him. Look out for other books by Duncan Connor, which will be made available for download at http://publications.atlantalocalrealtor.com