Selling Your Own Home
Many sellers chose to sell the home themselves as a “For Sale By Owner” instead of choosing to work with a professional real estate agent. You will need to educate yourself on the market conditions and if possible obtain access to advertise the property on the Multiple Listing Service (MLS). “For Sale By Owner” involves a lot of work, and is not for all sellers. The following are just some of the issues to address before starting the process. Do you feel comfortable handling all aspects of the transaction? Do you have the time and energy necessary to commit to the project? Is it important to sell in a hurry? If any of these issues present a problem this option may not be right for you.
The following is a checklist to help walk you through the selling process:
Know the facts. Buyers will want to know the facts about your property such as property taxes, zoning, lot size, square footage, etc.
Research the sales market & disclosure laws in your area. How much are properties similar to yours selling for? What are the terms of the sales? What property disclosure laws do you need to take into consideration?
Set the price. It is important to set a realistic price. Even if a buyer agrees to pay more than the home would appraise for the lender would not approve the financing. Be sure you are priced in with the similar properties in your area.
Determine financing alternatives. Look at the terms of your existing loan. Determine what are the financing options available for your prospective buyer. Would you consider a real estate contract or carrying some of the down payment?
Inspect your property. Look at it from the perspective of both the prospective buyer and the inspector. Take notes on all items that need to be repaired or replaced. Things to consider include:
- Is the lawn & landscaping attractive and well kept?
- If it’s a condo, is the front door (and balcony, if there is one) appealing?
- Are the windows and doors in good repair?
- Is the roof in good shape?
- Check the “curb appeal” Is the house appealing from the street?
- Does it need a new coat of paint?
- Are the appliances in good working order?
- Are the plumbing and electrical systems in good repair?
- Are the carpets or other floor coverings clean & in good repair? Like the paint, attractive & well-kept floor coverings are worth paying for so that your home makes a good impression.
- Does the interior need touch up or a new coat of paint?
- Are the sinks, showers, and tubs in good condition?
- Is there good lighting and are the fixtures in good repair?
Make all repairs noted in your inspection.
Know your neighborhood. Most prospective buyers will want to know about the local schools, shopping, parks, transportation, etc. Be prepared so you can knowledgeably answer their questions.
Investigate the real estate sections of local newspapers and other publications. Which will get you the most “bang for your buck?” Are there “throwaway” (i.e., free) real estate publications in your area that accept ads from individual sellers? In the local paper(s), is it better (in your area) to run a text-only classified, or do they have “photo boxes” where you can run both text and a photo of your property? Don’t forget the Internet. See if you can get your home listed on a website that features local properties. Some newspapers automatically (or for an extra fee) offer Internet advertising tied in to their traditional print ads. Learn the rates and deadlines for each publication, and then decide which one (or more) is best for you and your market. Investigate services that will allow you to market the property through the MSL service.
Establish a marketing plan. Now that you know what advertising will cost, create a plan on how to best (within your budget) reach prospective buyers, both local & out of town. Since many people do relocate from a distance, be sure to include Internet advertising in your plan. If your town is large enough, the “local” newspaper might have a national edition that you want to place your ad in, at least periodically.
Write the text and/or design your ad. At the least, you will need a well written few sentences that will run as a classified ad or a photo box ad. In addition, you might decide to run a larger, custom-designed ad in the paper and/or to use as flyers to hand out at open houses (or anywhere else you might meet prospective buyers). Don’t skimp on this. A professional, well-crafted ad can attract buyers while a poorly designed and executed one can turn buyers off to your property.
Clear your schedule. Make arrangements so that you have free time to schedule appointments at the prospective buyer’s convenience, as well as for any “open houses” that you hold.
Purchase and install a “for sale” sign. This should be well designed, attractive and weatherproof. The sign must be placed where it can clearly be seen from the street.
Prepare a fact sheet. Design a single sheet description of your property listing the features and benefits that will draw in prospective buyers. This should be attractive and professional looking. Have enough copies on hand to give out at open house showings.
Purchase “open house” signs. Make sure that they include a place to write the address of your property and the date/time of the open house. In addition to one for the front yard, you’ll want to place several in conspicuous locations around the neighborhood, such as main streets leading to your house. For these, directional arrows can point prospective buyers to your house even if they don’t know the area. Make sure that you take these signs down as soon as the open house is over. You don’t want people showing up on your doorstep at all hours of the day and night.
Set up a schedule of open houses. While most are held on the weekend, this is not convenient for all buyers. Make sure that you coordinate your print advertising to include information about your next open house.
Keep a list of prospective buyers. As people come through during open houses, or as they call from reading your ads or seeing the sign out front, keep a list with their names & phone numbers. Concentrate your attention on those who seem serious about your property, as opposed to those who are just checking out the neighborhood or whiling away a Sunday afternoon. Make sure that you make follow up telephone calls to all those who seem seriously interested in your property.
Once you have an offer, it’s time to negotiate. Leave your emotions behind when you enter negotiations. You never want to get angry or give away the fact that you’re overly eager. Disclose to the buyer in the beginning any material issues with the property that may affect the buyers decision to purchase the home.
Get your forms in order. A number of forms are required for the legal sale of your property. In addition to the contract of purchase and any counteroffers, there are other forms that the seller is required to provide to the buyer. It is necessary to review the contract carefully to determine when these forms/documents are due and what the buyer’s rights are once they receive the document. The form and content of many of these documents are prescribed by state or federal law and must be adhered to in their entirety. The proper forms may be obtained from your local Board of Realtors.
Negotiate final terms of the sale. With the buyer(s), come to an agreement (in writing) regarding the following:
- Purchase Price
- Conditions and contingencies
- Financing terms
- Date of closing and possession
- Have an attorney review any and all contracts before the deal is finalized.
Obtain inspections requested by the buyer. The buyer normally requests a general inspection before opening escrow.
Open Escrow. Chose an escrow agent carefully. Escrow normally takes 30 to 60 days but can be delayed if the escrow agent is not on the ball. Deliver all necessary documents to the agent. Be sure the buyer also delivers all necessary documents to the agent on a timely basis. It is a good idea to deliver the good faith deposit to the escrow agent.
Arrange appointments for the appraisal and termite inspection. Almost all lenders with require that these be done prior to closing.
Obtain owner’s title insurance. The lender also normally requires this insurance. By choosing the same company that provided you with a lenders title insurance you can obtain a discount on the owners title insurance.
Final walk-through. When both the buyers and a witness can be present, schedule a final walk-through 3 days to 24 hours before you complete settlement in order to determine that the property being conveyed meets the expectations of all parties involved. Resolve any disputes before the transfer of title.
Close Escrow. The loan company will usually fund escrow the day after the buyer signs all the documents. The title company will prepare and record the deed.
Schedule your closing to your advantage if possible. You may be building or buying your new residence. If this is the case you will need to be the “buyer” for a new property while simultaneously being the “seller” for your current one. Remember you must move out before the new owners take possession.
If possible, schedule both transactions to close at the same time, or else close your purchase shortly before closing your sale. Sometimes the buyer will allow the seller to rent the home for a short period of time until the seller closes on their new home.