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For Sale by Owner: Tips for a Favorable Outcome

February 17, 2015

Selling your home is one of the largest financial transactions you will encounter in your lifetime. Real Estate transactions can be taxing even for the most seasoned professional, as numerous issues can erupt throughout the many stages of the selling process that cause delays.  If not handled properly and effectively, these setbacks not only produce unnecessary stress to the sellers, but they also can be detrimental to outcome.

Owners who sell their home by themselves are especially vulnerable to these  pitfalls, as they lack the expertise and market knowledge that a real estate agent possesses that ensures that they develop an effective pricing and marketing strategy; address the appropriate legal issues; prepare and finalize the necessary paperwork and documents; maintain industry compliance; etc. throughout every phase of the process. Plus, these sellers also lack the industry contacts that real estate agents rely on to overcome obstacles and ensure a smooth and efficient closing. However, if you are contemplating listing your home as “For Sale by Owner”, implement the following considerations to optimize your experience and results.

 

1. Research:

  • It is crucial to understand the ins-and-outs of real estate transactions. You can find information in books or even study the documents you have from buying your current home.
  • Gather all of the paperwork and forms you will need for the closing, (i.e. copies of property records for appraisers, the title company, and others, as well as insurance documents, disclosures and legal documents).
  • Line up a real estate attorney, appraiser and title company.

 

2. Stage Your Home:

  • Fix any cosmetic problems or functional issues before trying to sell your home. Things that you cannot fix should be addressed in the home’s pricing.
  • Paint your walls a neutral color, replace the carpeting, refinish floors, inspect appliances, heating/air conditioner, the roof, etc.
  • Make sure your home is cosmetically clean and perfect. Your home should be immaculate for any listing photos and scheduled tours!
  • Trim your trees, wash the windows, box up any clutter, and let in natural light.

 

3. Price Your Home Effectively:

  • The number one mistake for owners who sell their own home is pricing the home too high. This will scare away potential buyers and cause it to sit on the market for a longer period of time.
  • Pricing a home effectively helps a home sell faster.
  • Check out home sales within your neighborhood for the last six months. Attend open houses and check out your competition.
  • Hire an appraiser.

 

4. Utilize Multiple Platforms to Market Your Home:

  • Eighty percent of home buyers begin their search on the internet, so homes that don’t sell in a timely manner are normally the result of poor internet marketing.
  • Spend a good portion of the 3% you saved from a real estate agent’s commission on marketing efforts. A real estate agent spends roughly $1,000 and countless hours on extensive marketing for each listing, but homeowners who do not have access to the same tools and systems as licensed professionals can expect that number to triple.
  • Hire a professional photographer to take quality photos of the front, back and interior of your home. Remember to remove dishes from the sink, empty the trash cans, close toilet lids, etc. Pictures of an unkempt house will turn off prospective buyers.
  • Invest time and money creating, printing and distributing appropriate marketing and advertising materials, such as flyers, brochures, and postcards. Pay brokers for mailing lists so that you can distribute these pieces.
  • Pay a fee to list your home on the MLS to get similar exposure as a real estate agent.
  • Advertise on social media sites, local newspapers, Craigslist, and other websites that cater to home-sales-by-owner.

 

5. Perfect Your Negotiation Skills:

  • If you have a firm bottom-line, make sure it is justified with strong research.
  • Consider bringing in a real estate attorney to facilitate the process.

 

6.  Avoid Closing Delays:

  • Many problems can arise throughout the negotiating and closing process that are hard to avoid without a seasoned professional.
  • It is imperative that you are familiar with any paperwork required by your state.
  • Be prepared for delays, and make the turnover and move flexible to these delays.
  • Hire a title company to handle the last minute details, and come to the closing table with everything mandated by state and federal law.

 

There are a number of other pitfalls that “For Sale by Owners” face throughout the selling process, such as safety hazards and real estate scams.  Real estate agents receive proper training to secure their safety and protect their clients from falling victim to these scams, so it is wise to consider hiring a professional to at least host your open houses and showings. However, if you choose to do so yourself, contact your local authorities for safety precautions and tips.

 

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