Sell your own home and pocket the profits
Do you want to sell your own home? You may want to save money on a commission that would be paid to a broker. Perhaps you are one of those people who believe that selling a home is a simple process because it seems so easy on television. I understand that it is probably not as difficult as having a root canal on yourself, but if you try it without preparation, it may seem like you tried the above.
The first thing to consider when selling your own home is determining what the current market is like in your local area. This doesn’t mean you should buy a copy of the Wall Street Journal and try to extrapolate what your local market is like based on national or worse, international trends. Some markets never experienced a big rise or fall during the last decade despite what was happening elsewhere. So how can you find information relevant to the local area? One way is to contact a local real estate agent and ask, but that can create unwanted pressure to list with them instead; which I actually suggest for the vast majority of homeowners. Another way is to check local newspapers which may reveal certain statistics, such as average days on the market, a comparison of selling prices with listing prices (they are rarely the same, except perhaps in a hot market) and rates of sale. local interest. Now what do you do with all this information? Keep it for now, as we’ll use it to help price your home.
Once we’ve collected some basic data, the next step is to start finding some comparable properties. A comparative market analysis is the most accurate way to price a “normal” home. It may not be the best way to assess the value of a new home, historic home, income property, or commercial property. What you will want to do is gather the SOLD price of at least SIX comparable homes, which have been sold in the last 6 months. If you use home sales prior to that, you run the risk that the comparison is not very accurate. Comparable homes should be as similar to your home as possible, but they don’t have to be identical. These homes should be in the same school district, zip code and, if possible, in the same housing complex if applicable. Explaining exactly how to do this process can be very detailed, so what I will say is that for an amateur analysis, make sure your home is priced less than houses that offer more amenities and size and larger than houses that offer less. size or not so up to date. . Knowing exactly how these differences affect the price of your home from comparisons requires knowledge of the market that most homeowners do not have. Remember that money spent on renovations is not 100% correlated with an increase in value.
Okay, now we have an idea about the list price. The next thing we need to do is go back to what is happening in the local market. If the houses are selling fast, I suggest you stay close to your estimated price for a quick sale of your house. If homes are selling at an average rate of 3-6 months (again, the average is different based on location), you would consider keeping your estimated list price or up to ten percent less if you expect a quick sale. If homes do not sell on average in less than 120 days, such as for sale by owner, it will have to be listed well below 10% or more of the competition. My reasoning for this is that highly marketed homes are not selling, where your home will have a fraction of the hype compared to those listed with a broker. You will need an advantage to beat the competition.
Well, we accomplished step one; price of our house. Actually, this is one of the easiest tasks that we will have to do. The second step will be to determine our budget to market the house. This is actually the main reason I suggest hiring a broker, as advertising, if done randomly, can cost MORE than hiring an agent. You can now advertise on sites that are tailored for sale by owners, but honestly, the traffic they generate is just pathetic compared to many of the more popular sites. If you are serious about it, I suggest listing it on a reputable site. When it comes to advertising in the local newspaper, it certainly doesn’t hurt, but keep in mind that more buyers find their home online than through the local newspaper. However, the local newspaper appeals to older generations and can help with an intergenerational marketing campaign. Another consideration is that, according to the National Association of REALTORS, 89% of homebuyers surveyed in 2011 used an agent to buy. That means that whether you want to or not, you will probably have to deal with or pay an agent. Like for sale by owner, you can offer to pay an agent to bring you a buyer. This can help you save some money compared to having an agent listed as well. A good number to start with is offering a 2-3% commission to any buyer’s agents. This will ensure that 89% of buyers who search for a home with the help of an agent do not totally avoid their home. Another marketing tool that you can use is a garden sign. These can be obtained relatively inexpensively from a local printer or online. If you are brave enough to let strangers roam your house, you can also organize an open house. It is estimated that almost 5% of home purchases are made on impulse, so it cannot affect your sales effort. I would like you to consider that bringing strangers into your home can be dangerous, so please proceed with caution.
Very good, we are moving towards the sale of our house. We have a price, we know how we are going to market it and we are ready to list, right? No, I’m sorry we still have work to do. The next thing we need to do is fill out a seller disclosure form to give out to potential buyers. This form can be obtained from a local housing authority or online. Additionally, we must provide potential buyers with a lead-based paint disclosure law if your home was built in 1978 or earlier, thanks to a 1992 law. Also, this is the time to neutralize your home, fix peeling paint (trust me, fix peeling paint) and complete any other little maintenance that needs to be done.
Okay, now we can go ahead and list the house. The easy part is done, we are moving into the more difficult parts of selling a home. Now if you included it yourself, I suggest you buy a landline number to use for advertising purposes. There are many places where you can find a cheap one. When your first prospect calls, greet them politely and share whatever information they need. As tempting as it may be, before inviting them to see the house, make sure they have been pre-approved, or at least pre-qualified for a loan; ask them to bring their pre-approval letter. People have no problem wasting time. If they refuse to bring those documents, skip the visit because they probably aren’t that interested in your home anyway. In fact, they can’t even make an actual offer right now. Show buyers that you have met the prerequisites, but avoid insisting on anything custom within the home as they are likely envisioning how they can change your home to suit your needs. If you are interested in making an offer, do not engage in a verbal price negotiation. First, your offer cannot be legally enforced by the fraud statute, and back-and-forth negotiations can elicit an emotional response from you. Instead, insist on a written offer and a binding contract. They will likely work with an agent, so this is usually a point of silence. When the offer is submitted, stay emotionless if it’s more than you bargained for, or less, as most buyers expect the savings you received from not paying a commission to carry over to them (now if you used my suggestion of offer a buyer commission agent may find that they receive a more reasonable offer). You have two options; accept or reject the offer. If you decline the offer, you can always make a counter offer. Some things you can expect during this time is that buyers will want you to purchase a homeowners insurance guarantee (which you should do to avoid a headache within 6 months when your water pipes burst or your furnace shuts down with only 4 years old). The second is that they will probably put various contingencies in the offer, which are completely normal. These contingencies can include a home inspection, a land survey, title insurance, a tint test, as well as several others.
Okay, you’ve found a buyer and your home is under contract. The next 30 to 90 days will be the hardest yet, but wait because you’re almost there. During this time, a home inspector after examining your home will make a list of several hundred problems your home has. If you have already disclosed these items in your seller’s disclosure, there should be little concern as they will not be items that your potential buyer can use to cancel the transaction. Now, for the things you were unaware of, buyers can try haggling the price even lower. I suggest that for small ticket items, stand your ground. Higher value items will likely require some concessions on your part. Your other option is to make no compromises and retry the entire process, revealing any new problems. If things progress beyond this point, prepare for more expenses at closing. You will have to pay transfer taxes on the property, as well as prorated property taxes if you have not already done so for the tax year. Again, there will be a few other expenses and instead of going into detail here, I suggest you take a look at a HUD-1 form to get a solid understanding of the expenses that are addressed at closing. If your agent is not handling the closing, I suggest that you hire a transaction licensee or attorney to handle the paperwork. DO NOT attempt to complete this stage on your own unless you are an agent or attorney.
Well, if you made it through closing, you’ve done what only 15% of homeowner sales can do! Congratulations, and when you go looking for your next home, use an agent.