1. Setting an appropriate price for your home is crucial when selling it yourself. By setting your price too low, you risk selling your home for an inferior price, but by setting your price to high you will waste valuable advertising dollars for a home that may never sell for the price your asking. Being objective is critical; your price should not reflect any emotional attachment that you have to your home. Remember buyers will be indifferent to special memories, and instead of justifying your price, they will be comparing it to other homes that are on the market. You should compare what other homes have sold for recently in your area not what is currently on the market.
Be careful placing value when it comes to upgrades. As a rule of thumb most upgrades do not far exceed the cost of the upgrade in fact some upgrades diminish the value of your home because they are not the norm. Also be prepared that many buyers will discount your price as compared to buying from a professional. Many realize your potential savings and expect it to be passed on to them.
2. You should obtain and familiarize yourself with all necessary legal documents. Real Estate professionals face more litigation than most other professions, so be careful that you are very sure of what you are doing.
This is a sample checklist.
1. Correct legal contract.
2. Deposit Receipt
3. Disclosure of no representation.
4. Pre-approval letter.
5. Appropriate addendums.
6. Lead paint, radon, clean air, mold, other appropriate disclosures.
7. Association disclosures, documents, articles of incorporation, restrictions, year end financial statement, application.
8. Personal property exclusion.
9. Survey.
10. Title Search.
11. Mortgage Payoff.
12. Sellers’ disclosure
13. Inspection report and acknowledgement to correct.
14. Loan application.
15. Buyer fact sheet.
16. Closing & Settlement
Usage of terms is also very important in negotiation. Prospective buyers may also request a buyers net sheet to convey who is expected to pay which closing cost. Be sure that respective closing cost are spelled out very clearly in the contract.
A mistake in one of these forms could diminish your extra proceeds or be potential grounds for future litigation.
Carefully budget your selling costs and prepare a net proceeds sheet to calculate your best estimate of what you will take away from your home sale.
3. You should also determine a marketing plan for your home that will extend well beyond a sign in your front yard. Before attempting this step you should first be sure that you have placed a fair market price for your home. If you set your price to high, much of your marketing efforts will be in vain. Marketing your home can be a tedious and expensive task that should thought out and executed by your plan. You need to diversify as much as budget will allow because you are not simply marketing in competition with other For Sale By Owners but with Realtors as well. Consider newspapers, magazines, television, internet, mailings, signage, flyers, and marketing your property potential out of buyers as well. Because the majority of buyers are working with a Realtor in some capacity you may want market to Realtors as well offering them a co-broke of your property if they bring you a buyer. Also be sure that you are readily available to answer all calls received from your marketing efforts. Also please note to make your advertising as professional as possible to comfort a potential buyer as many buyers are weary buying from an individual.
4. The first impression is a potential buyer has of your home is crucial. Be sure your home makes a positive statement by having an objective party carefully inspect all details viewing it through the objective eyes of a buyer. Make your home stands out favorably from the competition. Please refer to preparing your home report.
5. Do not become emotional or defensive while showing your home try to stay as objective as possible. Try to illustrate the upsides that your home has as opposed to defending the negatives, but try not to overemphasis your point or potential buyers may feel bullied. If they dwell on a particular negative, try to just let them speak their mind instead of justifying your price. Instead, tell them that you considered all negatives and positives before determining an appropriate price for your home. Agreeing with someone on a point instead of defending your opinion will aid to deflate an objection. Remember a buyer is trying to get you come down off your price from the start. Their objection may actually only be arising to get you to come down. Chances are unless they bring something up several times it is not significant.
6. Your knowledge of a potential buyer is critical to knowing their goals and motivations i.e. their timeframe, needs, wants, and their ability to afford you home. You should require a prequaling letter from the buyers intended lender before accepting a contract. If you do not, you have know idea whether or not they can actually obtain a loan to purchase your property. Do not wait until the day of closing before you are sure that they can afford it.
7. Negotiate Effectively & Knowledgeably
Before you can knowledgably and effectively write a contract for the sale of your property you should be have a detailed knowledge of all pertinent documents pertaining to the sale of your home because you will need to explain these details to your respective buyer. Be sure to have a real estate attorney to examine your documents for correctness before taking them to your buyer for signing. Having to make a correction could cost you the deal. Also be sure to keep emotions aside and again be objective. Buyers can be very fragile during this time. Remember that this is a stressful negotiation for both parties especially for the buyer if they are forgoing using the knowledge of a professional. Be sensitive to their needs.
8. You also should take a minute to examine your motivation for selling you property yourself. Weigh this against the time, effort, and money that you will need to market your property successfully. Your goal will help you solidify your marketing strategy. A likely motivation is to save the commission you would pay a Realtor in turn for your efforts. Be sure you understand the process entirely and are committed to giving it the time, money, and effort that it will take to do this successfully. The National Association of Realtors reports that more than 85% of all FSBOs eventually list with a Realtor. Please note this figure does not state that the remaining 15% saved money by selling the home themselves.
Consider these following making the decision to undertake the sale of your home:
1. Because sellers pay the commission to both real estate parties i.e. 1/2 to the listing side and 1/2 to the buyers’ side, most buyers choose to work with a Realtor because it doe not cost them anything.
2. Knowing this many speculator buyers looking for a investment bargain go after FSBO in hopes of having a lowball offer accepted. This type of buyer will most likely net you less in the long run.
3. Consider your advertising budget. If you doubt you will have the patience, time, or funds to advertise for your home, you may be wasting money if you think you might list your home in the near future. If you think you might give up, you probably will.
4. Research, be knowledgeable, prepare yourself for all negotiations, evaluations, showings and legalities.
5. Prepare a net sheet:
All cost and time expense for all documentation, fees, marketing expenses – a discounted priced that you might receive.
Vs.
Price an experience agent might receive – their commission
