What price should be set? Too high will result in a long FSBO quest, too low will probably sell fast, but certainly is not in your best interest. The following tips may help determine the asking price for your property...
Do your homework:
Compare your home to neighboring homes that may be for sale around you. Determine what they're currently selling for and use it as a benchmark for your cost setting process.
Try to get information on recent home sales in your area. This information may be available at your local county registry of deeds. Sometimes chatting with neighbors is a good way to 'dig' insightful information on recent home sales.
Many Agent broker’s offer free home estimate services. Call them up and have a few of them conduct a market analysis. This is also a good opportunity to interview possible agents down the road; in case you decide to abort your private sale efforts.
You can hire a professional independent appraiser to put a value on your home.
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Setting the price:
Determine what you would like to clear from the sale.
Add up the cost of the sale (closing fees, advertising expenses, etc...) and factor them into your bottom line.
Decide if you would like to sell for the maximum realistic price.
Decide if you would like to sell for the fair market value.
Decide if you would like to sell for your absolute bottom line.
Eventually you'll come up with a price that is ready for listing. Try that price for a few months. If no interest, perhaps you should consider dropping it a bit. Otherwise, if you're not in big a hurry to sell, keep waiting, someone may come along; you just never know!
Preparing Your Home
This next series of tips help identifies some steps that can better prepare your home for the market. First impressions count! You'll get a much better response from buyers if your home has been properly prepared inside and outside for appearance appeal.
This is not a drive-by! Cross your street and take a good look at your home from an objective perception. Would you want to look at the inside of this home? The front of the house is usually what people associate with 'first impressions'. If they don't like what they see, they will keep on going!
Clean up the front of your home and make it 'clean' looking. Are there trees or shrubs hanging down? Is your yard full of toys?
Are there many obstructions blocking the view from the road? You may want to clear them out of the way. Your goal is to show your home, not hide it!
How about your lawn? Is it looking weedy and messy? Do you have a garden that needs a bit of tender loving care? May want to consider investing a few dollars to bring it back to life! Good tidy-looking landscaping can go a long way to attract prospective buyers.
How does your driveway look? If it’s paved, maybe a neat-looking reseal job is in order? If its gravel, maybe an inexpensive load of new gravel spread around would look nice.
What about your gutters and siding? Are they crooked or dirty? If so, fix them up!
What about your roof? Once of the first thing buyers look at is your roof. If its shingles are missing or sagging, leaks are suspect, and many buyers will run like hell away from your home! I know I would!!
If you've managed to impress them enough with the front of your house, congratulations! Your next goal will be to show off an appealing inside appearance.
Most buyers take a good look at the basement area. It is the building block for the house. Some problems buyers look out for include:
Cracks and poor drainage. Fix them! the cost will be minimal and play a huge factor in closing a sale.
Mildew smell! Could be a wet-leaky basement. They will run like hell! Open your windows (if any) to air out the smell.
Water-pipe condensation may also cause dampness. This kind or problem can easily be corrected using tape that can be purchased at your local hardware store.
Use a de-humidifier to help remove the dampness.
Hang a deodorizer to improve that musty smell.
Repainting the concrete floor can really brighten it up.
Tidy up or remove cluttered space. Keep it neat for appearance.
Main Living Area
If they've just seen your basement, and they still want to look at your upstairs, congratulations! Your next step is to impress them with a neat and tidy looking living area. Here are some thing s to look for:
NO CLUTTER!!! Remove all clutter. Your house will show much better!
Clean all windows and make them shine!
Touch up your walls with paint on areas that are 'dinged'!
May need to retouch wallpaper as well.
Floors and carpets should be clean.
Make sure all lights work.
Closets should be clean. Make sure they open and close properly. Buyers will test them out.
No dirty dishes in the sink!
Cupboards should be neat and organized.
Sink and Appliances should be sparkling clean.
Your bathrooms should be sparkling!
Buyers pay very close attention to the kitchen and bathrooms. Make sure those rooms are spotless. The overall goal is to give the impression that your home is in excellent condition. Buyers really do warm up to homes that have been properly taken care of. By the time your done preparing it for sale, you may decide not to sell at all!!
Tools to Succeed
In order to compete with homes listed by Agents, you need to equip yourself with tools to help your FSBO effort. There are many tools available to help you succeed. Choose which tools you think are a good fit for your campaign.
Information Sheets or Feature Sheets. This information will really help buyers evaluate your home. It should include data on all of the features your property has to offer, as well as some photos for buyers to take back with them when they leave. All of our members have a custom webpage listing that (for the most part) contains this type of information. All members have to do is print their custom webpage for an instant feature sheet that can be copied and handed out to visitors during showings. A free tool we offer to all of our members!
For Sale Signs. Even with Agent listings, depending on your property location, much of the interest on your home may very well be generated from 'drive-by' sign advertising. This is a crucial tool for private sale success.
Property Cards. These are like business cards and can be handed out as quick reference cards to prospective buyers. Hand some out to your friends and neighbors. They contain your contact info and a pointer to your Internet listing web address so the buyer can go home and check out your property online at their convenience.
Without a good marketing strategy, let's face it; no one will even know your property is for sale! You need to get the word out and let buyers know your property is on the market. Marketing involves a pro-active effort on your part to attract and find prospective buyers. The end result of a good marketing campaign is increased traffic from interested buyers and a better overall chance to succeed in private sale.
Build a network. Use your friends and neighbors and family members to help distribute information about your home and spread the word. Give them copies of your Feature Sheets and Property Cards.
Actively solicit Agents offering low commission if they can find a buyer for your home. They will be interested I assure you. This is a great opportunity to have them work for you, and you can still try to sell FSBO. Everyone wins. If you assume a 2 to 2.5% commission to a agent, you save on standard commission, the agent still gets their standard commission (normally they would have to split with another agent and still only get half of the standard 5%).
Always carry a supply of feature sheets and property cards with you wherever you go. You never know who you might run into.
Although only part of a good overall marketing campaign, it is a very useful and important step to success. Local newspaper Private Sale ads usually attract a dozen or so calls depending on the specifics of your property. Flyers on local bulletin boards can help as well.
Prepare a budget for advertising. Determine what you are willing to spend on advertising. A good rule of thumb is about 15% of your saved commission fee ($PRICE * .05 * .15 = $BUDGET).
Break down your budget by month or week. Divide the budget by the time in months you think it will take to sell your home. The average time for most homes on the market is about 3 months. You can then divide you budget by months or weeks to determine what funds you'll have available to conduct your campaign.
What media to use? Local newspapers are the obvious choice. Other options include local flyers for your community. Most communities have special publications. Advertising in your own area is a good way to spread the word to people who are already familiar with your neighborhood and may tell other family members and friends about your property listings.
Use your Internet listing. More and more people house hunt on the web every day. Your online listing can attract viewers by itself, or it can be used as a tool by you (in reference) inside your local newspaper or community flyer ads.
Determine the cost of placing your ads. Then plan a strategy to spread your budget around so that your property gets maximum consistent exposure.
Word your ads carefully. Target your buyers according to the type of home you have for sale. Bare minimum, your ad should contain information about the home style, location, 'by owner', and phone number. Always make reference to your Internet listing for more details. Don't forget to include your phone number (for those few readers that don't have access to the internet). Always include either PRIVATE SALE or BY OWNER somewhere in your ad! This will attract buyers as they may see potential for a good deal in that you are saving the Agent commission fees. Agents will no doubt approach you once they spot your private sale ad as well. Don’t let them discourage you with mis-information on private sale ventures. They will say whatever it takes to get you as a full signed-up listing. Use them as a tool if you like, but don't let them use you!
What to do when buyers call? Keep a logbook by your phone to record contact info from callers. Remember, your number one objective is to get them to your home for a viewing. Try to book them for an appointment.
No one said it would be easy! Why do you think your saving that 5% commission? You can't simply list your ad on the Internet and expect it to sell for you. You need to be pro-active and aggressively market your home for sale. Most FSBO quests fail because buyers just don't seem to understand what they need to do to be successful. You want to save commission? Of course you do, why else are you considering private sale? Then you have to earn it. Work hard, be smart, and you too will succeed in private sale!
Showing Your Home
No one else can show your home like you can. Most agents know very little about your property and usually they cannot answer most questions buyers may have about the specifics. For the most part, agents simply bring buyers to your house, and say very little as they walk through. Private sale is your opportunity to showoff the fine details of your home.
How to act
Be honest and sincere.
Don't be alarmed or startled by negative comments. Stay calm, try not to become defensive.
Take them through each room. Let the buyers have a bit of time to look around. Caution: never let viewers have unescorted access to your home. Keep an eye on them, just in case they get sticky fingers!! You never know!! Better to be safe then sorry!!
Never say negative comments about the home, always positive.
Try not to give away leverage by appearing desperate: divorce, relocation, etc...
Don't be pushy. Aggressive salespeople can kill a buyer’s interest very fast.
Handling phone calls
First get the callers name and number (call display helps) and ask how they heard of your ad (for tracking advertising effectiveness).
Answer the callers’ questions concisely with detail. If they ask if it has a garage, tell them how big it is as well. Add facts and additional information whenever you get a chance, without seeming pushy. Stay in context to the original question if possible.
If the caller has not yet seen your Internet listing, tell them about it and that it will contain photos and more details, in case they're interested.
If the caller appears interested at all, don't forget the BIG question: "When would you like to see it?". Your goal is to get bookings. This caller is a lead. If possible, you don’t want to lose the potential appointment.
Prepare for the showing
De-clutter your home an hour or so before the showing.
Tidy up both inside and outside.
Get your feature sheets ready to be handed out.
Make some coffee. Even if the buyers don't drink it, it will make the house smell great!
Control your pets. Cats and dogs should be secured. Do you have a stinky cat like me? We have two of them. Put that smelly cat outside and leave him there until they're gone! If you're really lucky the buyers may be cat lovers and you can negotiate them into the deal!!
If you're using a register book, get it in place and ready for use.
Take a mock tour of your house to make sure it looks great and is totally ready for viewing. You've worked hard to get this appointment, make the best of it.
Just before they arrive, open up all drapes and blinds, and turn on the lights. You want a bright atmosphere.
The fewer people in your house during the showing, the better.
If your showing is at night, and you have a wood stove or fireplace, light it up (staging effect).
You might want to light some scented candles as well.
When they arrive, greet them warmly and introduce yourself. Then hand them a feature sheet and begin the tour.
Always escort them during the entire tour. You'll need to describe the house and answer their questions. It is also wise not to let strangers walk around on their own, you never know what they're true intentions may be.
Point out the highlighted features of each room.
Listen to your clients. Only by listening can you better address their concerns and fully detail the benefits of your home.
Never get stressed by negative comments. Everyone has different ideas. Address them if you can, but avoid getting defensive. Offer possible solutions.
Avoid over-selling. Try not to mention all the work you personally did on the home and expose your sentimental attachment. A buyer is interested in the home, not you!
Try not to waste too much time with Lookers. Lookers are people that make more comments about the decor or other useless chat other than the home itself.
After the tour, ask them to sign your guest book. The guest book has multiple purposes. It secures their contact info for follow-up phone calls as well as protects your interests in the event that they return for a second showing with an agent. Your guest book proves that you first introduced the home to the buyers without their agent’s assistance.
When they've gone, update your registry with comments on the viewing noting anything you can remember that was not said and possibly anything that was said that you might not want repeated for the next showing. Sometimes a follow-up call after a day or so is a good idea to see if they’re still interested.
Simply put... don't bother! It's a very well known fact that open houses rarely sell homes. It is mostly provided to appease home owners (who think it will help), and to open leads to agent's for new potential buyers. Not very beneficial to you the seller. You'll get many curious 'Looker' types. It really is not worth the inconvenience or effort. You’re better off concentrating your campaign on other areas.
You can expect to receive phone calls and possibly emails from brokers the minute you list FSBO. Agents are trained to tap into this market and apply learned techniques to 'turn' private sale owners over to their side. You can expect them to call and offer their services, while at the same time offer discouraging information on 'by owner' selling. They will mention that most private sale attempts fail and that homes rarely sell on the Internet. The purpose is to put doubt in your mind so you'll have no confidence in your FSBO quest, and will simply sign up with the Agent for a better chance to sell your home. Private sale does in fact require an effort on your part to be successful. Let's face it; if you’re going to save that commission, you'll have to earn it. At least give your private sale campaign a chance for a few months. Then go with an agent if you think you're not generating enough interest. Our site, including this guide, is intended to give you the tools and knowledge to succeed. Most FSBO ventures that fail are simply due to lack of education on our to implement a solid private sale campaign. That doesn't have to be the case. You can sell your home FSBO by 'playing on the same level playing field' as the Big Boys!
You can expect agents to keep calling for a few weeks at the start. Some of the more aggressive ones will call more than once to follow-up on your progress. Here are some tips on handling the calls:
Let them know your selling your home FSBO.
Real Estate agents can be your allies, not an enemy.
Inform them that you would be happy to show your home (by appointment) to their clients, with the understanding that you are not listing with an agent.
You might even offer the agent a finder’s fee of 2% if they can locate a buyer for your home. This is called co-broking. You represent the selling agent. Have them work for you at low commission, while at the same time; your FSBO campaign continues to evolve.
Watch out for "I have a buyer waiting to view your home..." Of course it might even be true, in which case, you should query the agent on why they want your home, their ability to finance etc..., see if the agent is serious or bluffing.
If they do have a buyer for your home, offer to sign a contract for that specific buyer on a specific date only. If the buyer does in fact buy the home, you agree to co-broke the commission with the agent (usually about 2.5%, or half of the going rate in your area).
NEVER disclose your bottom line to any broker!
You will need to contact a real estate lawyer as soon as you receive your first offer to purchase from a buyer. It is usually the buyer who first contacts their lawyer to draw up the contract to purchase. When it is received, it may have conditional clauses that should be scrutinized for approval. You will need to have a lawyer involved at this stage. Laws change so often, and they are the specialists in real estate contract law. Here are some things to expect from your lawyer:
He will explain to you exactly what to expect from him.
He will review the preliminary offer made by your buyer.
He will handle an escrow account for transferring of the funds, if required.
He will handle all the paper work for you and provide copies of all transactions.
He will advise you of any unusual issues relating to your contract of sale.
He will protect your interests.
He will represent you in dealing with the buyer's bank.
He will arrange for a title search to be done.
He will prepare the necessary closing documents.
He will work with the buyer's attorney directly, as your legal representation.
He will handle the details for you.
The sale of property can be complicated and involved. You really do need the services of a good real estate lawyer to represent you, so that he can handle all of the details and protect your interest as you’re personal legal representative. It may be a good idea to contact your lawyer before starting to sell your home. Talk to him about what you plan to do. Get feedback on what to expect and when to contact him.
Well, that about ends our Seller's guide tutorial. You now have all the knowledge and wisdom needed to succeed in private sale. Keep in touch and let us know how you make out.
Best of luck in your quest!
May 25, 2012