For Sale By Owner Tips
All homes are for sale by owner. The title is held by the owner. Homes are offered by (1) agents who represent and advise the seller while marketing their home. Or homes are offered by (2) unrepresented sellers.
Many homeowners in Decatur, Alabama sell their house with the help of a Realtor; some homeowners prefer to handle it themselves. Selling without an agent can be a lengthy, complex process.
Parts of the job involve: Accurately pricing your house.
- Qualifying a buyer
- Basic real estate regulations and contracts
- Details of a closing.
The disadvantage is the demand on your time, financial risks and also the legal risk. Mistakes can cost you money you’re trying to save. Don’t become a statistic. Facts tell the average selling price of a home sold by an owner was almost 15% less than those who use a Realtor. Unrepresented sellers usually put less money in their pockets and are at more danger and risk to themselves.
However, if you’re trying to sell your home without an agent, here are a few guidelines:
Pricing Your Home
It is essential to price your house in Decatur properly from the start. The most common mistake is overpricing and some people will actually ask too little for their house! A good marketing campaign can only do so much. Pricing is the key in determining how quickly your property sells and if it sells.
If you need to sell in a hurry, you will likely need to price it at or below the market value. If time is not critical, then you can try to get above market value. If not priced competitively, it may not sell at all. Intimidated buyers might just walk away without bidding.
Are you adequately familiar with sales in your neighborhood to set the asking price? You need to find out the house’s accurate value. Accurate value is the highest price a ready able buyer will pay. You need to consider current market conditions, as well as the cost of financing and its availability and also comparable properties in your area
The biggest determinant of price is the location. Invest in an independent appraisal by a qualified appraiser. They have access to current market data and can be objective about what buyers would pay for your house. A professional appraisal will help validate your asking price.
Many homeowners in Decatur, Alabama price their home based on what another homeowner is asking down the street. Base the price on what the market will stand, not an inflated price that some neighbor might be asking. People will exaggerate when talking about the fantastic “deal” they pulled off. Work on facts, not fiction.
Don’t price your property based on your tax assessment. Tax assessments can be quite different from the true market value.
What you paid for your home – it has no significance to the present market. What you want or need in economic terms is irrelevant. Your home is only worth what someone is willing to pay for it, which in most cases will be the true market value.
Selling a home involves an familiar understanding of the real estate market. Agents will sell your home for the highest possible price in a reasonable amount of time.
Your Safety comes first
When selling your home by owner, safety is a huge concern. A “For-Sale-By-Owner” sign is an invitation for strangers to walk through your home. People will come to your home, for their own reasons, not all of which are honorable. Opening your door to a criminal is the last thing you need.
The majority are safe, honest people. However, security measures are necessary; it’s an unfortunate fact that there are creeps out there who target FSBO homes as easy marks for theft or worse. Just ask a police officer how often unrepresented sellers are robbed, attacked, or otherwise endangered by criminals disguised as home buyers.
- Showings should be by appointment only. Always get a name and number and call back to confirm. Simply say, “let me check with my husband (wife) for the best time and I will call you back,” Even if you are not married.
- Don’t be home alone when a stranger visits.
- Have people sign a guest book and ask to see identification. You are inviting strangers into your home and you have a right to know something about them.
- Place all valuables out of sight. Anything of value needs to be hidden. Hide ALL prescription drugs.
- Personal information, such as which schools children attend should be put away.
- Never leave a message telling callers that you are not home.
- Request that visitors enter and exit through one door. Have quick and easy access to all of your exits.
- . Keep a sensible space between you and your visitor. Never enter a bedroom, den or other room with a visitor. Stay in the doorway.
- Do not put information on flyers which would compromise security.
Beware of casual questions like “Do you have a security system?” If you feel uneasy, tell the person you have another appointment and show them to the door.
One scam in Dallas: A friendly couple makes an appointment to view your house. One of them asks to use the bathroom. While in the bathroom they search for prescription drugs. There is a big market for these.
Another scam: A nice woman comes to view your home and asks to take some digital photos so her husband can see the pictures. You have no objections. But the buyer has just taken pictures of your valuable possessions and documented the location of the rooms.
Weed out the ‘Window Shoppers’
Drawing potential buyers in Decatur, Alabama is the No. 1 problem encountered by unrepresented sellers. Attracting qualified buyers is even more difficult.
When the FSBO sign goes up, there will be unqualified curiosity-seekers. They will call and stop by at all hours of the day and night.
You need to regulate lookers from capable prospects. A good real estate agent confirms a buyer’s pre-approval status before showing the property. You can lose a lot of momentum by spending time with a buyer who is unable to pay the price.
It can be difficult for a seller to monitor qualify buyers comfortably. Will they confide in you about their financial status? They’re hoping to find a seller who will finance the deal.
One of the challenges of an unrepresented seller is dealing with low-ballers. Settling for a lowball bid is worse than paying an agent commission.
Make your home in Decatur, AL appealing. Cosmetic repairs are your best investment when it’s time to sell your home.
Most buyers are not flexible enough to look at the home when it is convenient for the seller. The seller must be willing to show their home 7 days a week. You may miss opportunities to sell if you are unavailable.
Be willing to do the things most folks don’t like: working weekends, answering the phone at all hours, and always being polite.
There’s a lot more to marketing a house than an ad in the paper, putting a sign in the yard, and waiting. You need to have a clear marketing plan that will appeal to the largest number of buyers.
Realtors use a range of promotional efforts to attract buyers. They include ads in newspapers and magazines, open houses, the Internet, signage, mailings, flyers, listings, referral organizations, agent contacts, company contacts, as well as past clients and customers.
Prepare flyers and hand them out to all your neighbors. You’ll want to plan some open houses. The cost of signs, flyers and advertising can add up. Use every advertising option you can think of.
Nearly 80% of today’s homebuyers in Decatur use the Internet to search for homes.
Great pictures of your home to show prospective buyers are a great investment. If your house looks good in pictures, people will want to see more.
Keep in mind that you’ll be missing out on relocating buyers. Most big companies use relocation companies to assist their transferring employees and these companies usually work only through approved real estate agents. There is not much you can do about that.
Always follow-up with potential buyers. They seldom buy on the first visit and it is up to you to keep their interest up. Don’t be too aggressive
Every home is different and there are different factors to consider that affect market values. Unless you are a real estate agent full- time, it is very difficult to keep up-to-date on market trends, houses in your neighborhood, and the people most likely to buy there.
Be ready to answer questions like “Why aren’t you using a real estate agent? Is there something wrong with this property?
Getting to the negotiation phase is a big accomplishment. Many sellers feel the stress of the whole process on reaching this point. They often then agree to terms of the buyer and give in to the buyer’s demands. Make sure you get the best deal and not just the fastest deal.
It’s important to emotionally detach yourself from your house. Try not to be affected by unkind remarks.
The vast majority of the qualified buyers are working with real estate agents. Be prepared for them to ask you to pay their “buyer’s agent” commission (usually 3%). This is traditionally the way I help a buyer purchase a FSBO home.
FSBO homes usually interest bargain hunters who often expect you to lower your price since they are looking to save money on commissions. While you’re trying to avoid paying commission, if the buyer doesn’t have a real estate agent, they are doing the same. These buyers will often deduct the commission from your asking price. But why would you want to do that? If you’re going to take a % off the price upfront for saved commission, you could have saved yourself all the hard work and just listed with an agent.
Financing will be required by most buyers. If attractive terms are available, the buyer can, and often will, pay an even higher price. The more knowledgeable you are about available financing, the better your chances of making a sale at the best price. Lenders can inform you with their underwriting guidelines so you can attempt to qualify the buyer financially before contracting with them.
Every seller not using a real estate agent should have an attorney or another qualified individual to preside over all agreements. Become familiar with inspectors and escrow companies. Have a plan for where to close, where to buy a title policy, where to keep a good faith deposit, etc.
Before you decide on the FSBO route, ask yourself: Can you get buyers to sign a purchase agreement? How do you pick a Title Company, and who is supposed to pay their fees? What if the Buyer backs out of the contract? What coverage do I have if the Buyer sues me a year after closing?
Stay legal in Very Important
Preparing the legal forms, disclosures etc. are your responsibility and you need to know everything that must be done to close the sale properly and legally.
Many home sales have been lost due to incomplete paperwork, lack of inspections or not meeting disclosure laws.
You must become educated about buyer’s contingencies. Texas is one of the most demanding states when it comes to selling real estate. Lacks of proper disclosures are often the cause of post-sale legal disputes.
Individual sellers aren’t subject to as many fair housing guidelines as real estate agents, but it’s smart to follow all fair housing laws, just to make sure you don’t encounter legal problems.
If you do not fully understand the legal complications and necessary steps required in selling a home, hire a real estate attorney. An attorney not familiar with real estate processes could cost you hundreds of dollars and delay the closing. Avoiding guidance from an attorney or Realtor will cost you money, not save it. Factor in the extra attorney cost when looking at your bottom line.
My sellers find that a Realtor representing them in Decatur is worth the money. There are so many details and fine print, creating countless dangers involving your life’s savings. Making even a small mistake can mean serious trouble.
Contact a real estate attorney and prepare a contract that you can have on hand. If you find a buyer, you will be ready to execute a contract without delay.
Put every aspect of your contract in writing and make sure that everyone involved signs the agreement. Once you’ve reached an agreement and arrive at the contract stage, you must be aware of any contingencies the buyer has added to their offer.
The contract should spell out what happens to the buyer’s earnest money, if the deal falls through. The earnest money is not yours until the house sells or the buyer breaks the contract in such a way that it becomes yours by previous agreement. It must be credited to the buyer’s funds on closing day and should be held in a trust account until then.
The final job involves organizing all the legal and technical details to complete the transaction. You need to follow-up persistently on necessary paperwork, including inspections, surveys, title insurance, notice of escrow and loan approval to ensure that there will be a successful closing.
When you’re ready…
For many unrepresented sellers, the financial savings become disappointing. They would have been better off to have paid the agent fee which would have included many charges up front. Many sellers say the time, paperwork and everyday responsibilities involved were not worth what money they saved.