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Lee Schmidt's Blog

By Lee Schmidt | Broker in Morgan Hill, CA

Can I sell my own house?

If you ask anyone who has ever tried to sell their home themselves, they'll tell you that from the moment the "For Sale by Owner" sign goes up, the phone begins to ring. Unfortunately, many of

those calls will not be from prospective buyers but rather from real estate agents looking to obtain your listing. Obviously the idea of not having paying commission to a real estate agent is attractive to any home seller. But because of all the issues involved in the process, selling a home on one's own can be challenging as many home sellers will attest.

The key is to be properly prepared. If you are not, your home could remain on the market longer than you expect because you are not attracting or getting offers from qualified buyers. This is

where many homeowners become frustrated and give up on selling their home themselves. However, there are sellers who successfully accomplish selling their own homes. You can be one of them.

To help you prepare, here are 10 tips that you should be aware of before you make the decision as to whether or not this is the right approach for you.

❶ Price it Right...

Correctly setting your asking price is critical. Setting your price too high can be as costly as setting it too

low. Home prices are determined by fluctuations in the marketplace, not by your emotional attachment or by what you feel your home is worth. In order to establish a realistic price for your home, objectively compare

the price, features and condition of all similar homes in your neighborhood that have sold in recent months. It is also important for you to be familiar with the terms of each sale. Terms are often as important as price in today’s market. 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.

❷ Prepare Your Home for Sale...

First impression is crucial. Make sure your home makes a positive statement by carefully inspecting all details and viewing it through the objective eyes of a buyer. Don’t gloss over needed repairs and fix-ups, as your

prospective  buyers won’t. Your job is to ensure that your home stands out favorably against the competition.

❸ Prepare Yourself With All Necessary Legal Documentation...

Not surprisingly, there are many important legal contracts and documents which you must assemble, complete and understand. A partial checklist of forms that you will require for prospective buyers and for legal documentation is as follows:

• Seller Disclosures • Purchase Contract

• Mortgage Payoff • Loan Application

  natural hazard report     termite inspection

• Deposit Receipt • Property Profile 

• Buyer’s Cost Sheet • Closing & Settlement

• Home Inspection •  Preliminary Title Report

❹ Market Your Home Effectively...

Beyond the sign you will put on your lawn, you should find effective ways to spread the word about your home. Local buyers can be reached through the newspaper, but this is only a small part of the market you are after. Be sure you include the many buyers who could already be working with a Realtor®. To locate them, target as many top agents as possible in your market to see if the criteria of their buyers matches that of your home's. Because out-of town buyers are also an important target, you should create a strategy to reach these people as well. Above all, you should be very service-minded and make it easy for pre-qualified buyers to view your home. Ensure there is always someone available to answer the phone, pick up messages promptly, and be ready to give qualified prospects a tour of your home as soon as possible.

 

❺ Remain Objective During a Showing of Your Home...

Keep emotion out of the sale of your home, and the best way to do this during a showing is to remain physically in the background. If a prospective buyer says something negative about your home, it is better to counter-balance this point of view by illustrating the positives rather than becoming defensive.

❻ Pre-Qualify Your Prospects...

Don’t waste your time entertaining buyers who could never afford your home. Research their financial

ability with respect to job security, salary, debts, liabilities and credit standing.

 

❼ Negotiate Effectively & Knowledgeably...

There will be many details to resolve before a sale can be considered final: price, terms, inspections, possession date, buyer concerns and objections. Make sure you fully understand the contract you have drawn up so you can in turn explain details and ramifications to the buyer and make any amendments to the sale that are necessary. The contract you use should be thoroughly examined by your real estate attorney. Some real  estate brokers may be willing to help you do this. While this is going on, manage the buyer’s interest in your home so that it doesn’t wane during negotiations.

❽ Know Your Buyer...

Your objectives during negotiations are to control the pace and set the duration. Try to determine what your buyer’s motivation is. Does he or she need to move quickly? Do they have enough money to pay your asking price? Knowing this information will give you the advantage in the negotiation because you will know up front   what you will need to do in order to get what you want.

❾ Don’t Move Out Before You Sell...

Studies have shown that it is more difficult to sell a home that is vacant. It looks forlorn, forgotten, simply

not appealing. It could even cost you money. If you move, you’re also telling buyers that you have a new home and are motivated to sell fast which can, of course, gives them an advantage at the negotiating table.

❿ Know Why You're Selling and Keep it to Yourself...

The flip side of “understanding your buyer” is to “understand yourself”. Your reasons for selling will affect everything from your list price to how much time and money you will invest in getting your home ready for sale. Your motivation will help you determine what is more important to you: the money you walk away with,

the length of time your property is on the market, or both. Different goals will dictate different strategies. As someone who wants to sell without a real estate agent in an effort to save the commission, it is likely that money is one of your primary considerations. Whatever your reasons, however, it is very

important to keep them to yourself so as not to place yourself at a disadvantage at the negotiation table. When asked, simply say your housing needs have changed.

 

The bottom line is that anyone can sell their own house as long as you are prepared, and follow a successful marketing and negotiating strategy.

From a statistical perspective, 95% of all home sales are handled by an agent. FSBO (for sale by owner) homes sit on the market longer and typically sell for 3-5% less than agent handled transactions.

 

 

 

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