So do you want to sell your own home? You may want to save money on a commission that would be paid to a broker. Maybe you are one of those people who think selling a house is a simple process because it looks so easy on TV. I understand that it’s probably not as difficult as having a root canal, 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 to determine 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 have never experienced a huge rise or fall over the last decade despite what was happening elsewhere. So how can you find information that is relevant to the local area? One way is to contact a local real estate agent and ask, but that can put some unwanted pressure on you to sign up with them; which I actually suggest for the vast majority of homeowners. Another way is to check your 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 an active market), and trading rates. local interest. Now what do you do with all this information? For now, keep it, 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 collect the SOLD price of at least SIX comparable homes, that have sold in the last 6 months. If you use home sales prior to that date, you risk the comparison not being very accurate. Comparable houses should be as similar to your house as possible, but they do not have to be identical. These households must 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 for amateur analysis, make sure your house is priced less than houses that offer more amenities and size, and more than houses that offer less size or that they are not so updated. . Knowing exactly how much these differences affect your home’s price from the comps requires market knowledge that most homeowners don’t have. Remember that money spent on renovations does not correlate 100% with an increase in value.
Ok, now we have an idea about the list price. The next thing we need to do is go back to what’s happening in the local market. If homes sell fast, I suggest you stick close to your estimated price for a quick home sale. If homes are selling at an average rate of 3-6 months (again, the average is different depending on the location), I would consider keeping your estimated list price or up to ten percent less if you are hoping for a quick sale. If homes do not sell on average in less than 120 days, as a sale by owner, you will need to be priced well below the competition by 10% or more. My reasoning for this is that highly marketed homes don’t sell, where your home will have a fraction of the advertising compared to listing with a broker. You’ll need an edge to beat the competition.
Well, we fulfilled the first step; valuing our house. This is actually one of the easiest tasks 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 haphazardly, can cost MORE than hiring an agent. You can now advertise on sites that cater to for sale by owners, but honestly the traffic they generate is just pathetic compared to many of the more well known sites. If you are serious about this, I suggest you list on a reputable site. As far as advertising in the local paper goes, it certainly doesn’t hurt, but keep in mind that more buyers find their home online than through the local paper. However, the local newspaper appeals to the older generation 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, whether you want to or not, you’ll likely have to deal with or pay an agent. Like a 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 list you as well. A good number to start with is to offer a 2-3% commission to any buyer’s agents. This will ensure that the 89% of buyers who search for a home with the help of an agent do not avoid it entirely. Another marketing tool that you can use is a yard sign. These can be obtained relatively cheap from a local print shop or online. If you have the guts to let strangers roam your home, you might as well host an open house. It’s estimated that nearly 5% of home purchases are made on impulse, so it can’t hurt your sales effort. I would like you to consider that bringing strangers into your home may be unsafe, so 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 quote, right? No, sorry, we still have work to do. The next thing we need to do is fill out a seller disclosure form to give to potential buyers. This form can be obtained from a local housing authority or online. In addition, 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, now is the time to neutralize your home, fix peeling paint (believe me, fixing peeling paint) and completing any other small maintenance tasks that are needed.
Ok now we can go ahead and list the house. The easy part is done, we are moving on to the more and more difficult parts of selling a house. Now if you listed 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 potential buyer calls, greet them politely and share any information they need. As tempting as it may be, before you invite them to view the home, make sure they’ve been pre-approved, or at least pre-qualified for a loan; ask them to bring their pre-approval letter. People have no problem wasting your time. If they refuse to bring such documentation, skip the tour because they probably won’t be that interested in your house anyway. In fact, they can’t even make a real offer right now. Show buyers that they’ve met the prerequisites, but avoid insisting on anything custom inside the home, as they’ll likely be imagining how they can change your home to suit their needs. If you are interested in making an offer, please do not enter into a verbal price negotiation. First, your offer is not legally enforceable under the fraud statute, and back-and-forth negotiations may elicit an emotional response from you. Instead, insist on a written offer and a binding contract. They are likely working with an agent, so this is usually a point of silence. When the offer comes around, stay excited whether it’s more than you expected or less, as most buyers will expect the savings you received from not paying a commission to pass through to them (Now if you used my suggestion of offering a buyer’s offer). agent commission, you may find that you 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 to expect during this time are buyers wanting you to buy a homeowners insurance guarantee (what to do to save yourself a headache 6 months from now when the water pipes burst or the boiler fails with only 4 years old). The second is that they will probably put several contingencies in the offer, which are completely normal. These contingencies can include a home inspection, land survey, title insurance, dye test, as well as several others.
Well, you’ve found a buyer and your house is under contract. The next 30 to 90 days will be the toughest yet, but wait because you’re almost there. During this time, a home inspector after examining your home will come up with a list of several hundred problems your home has. If he has already disclosed these items in his seller’s statement, you don’t have to worry too much, as they won’t be items your potential buyer can use to back out of the transaction. Now, for the things you were unaware of, buyers can try to haggle the price even lower. I suggest for small ticket items, hold your ground. Higher value items will likely require some concessions on your part. Your other option is to make no compromises and try the whole process again, revealing the newly discovered problems. If things progress beyond this point, be prepared for more expenses at closing. You will need to pay transfer taxes on the property, as well as prorated property taxes if you haven’t already done so for the tax year. Again, there will be some other expenses, and rather than go into detail here, I suggest you take a look at a HUD-1 form to get a solid understanding of what expenses are addressed at closing. If your agent won’t handle the closing, I suggest 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 homeowners for sale can do! Congratulations, and when you go looking for your next home, use an agent.