Selling your Home
Six steps in Selling your home by owner
Selling your home without a real estate agent is not for everyone, but for those willing to invest the time and research, as well as possessing the emotional strength, doing so can save tens of thousands of dollars in commission fees.
Here are six steps to help guide you to a successful sale by owner experience.
1. Do your research
The first order of business in the preparation of selling your own home is to become familiar with a real estate transaction. If you still have the paperwork and contract from the purchase of you home, pull them out and look them over. If it all makes perfect sense—great! If not, maybe some time looking online or reading a book or two about how to sell your house may be in order.
Gather all the paperwork and forms you'll need for the home sale. While you can certainly sell your house on a handshake, it is a good idea to use a written agreement to clarify terms of the agreement. Beyond the basics like price and timing, a real estate purchase agreement can help specify items such as inspection periods, loan expectations and other important items common to a most real estate transaction.
This is also a good time to line up the people that will help you in your sale. Most important on this list, of course, is an escrow company to assist you in the transaction. Others that you may find useful are a good appraiser, home inspector and/or title company. Your escrow company can help you get connected to these folks if you need help.
Finally, consider how you want to structure the sale. Do you want to consider offering special incentives such as owner financing or a lease-to-own to attract first-time home buyers? If so, you probably have a bit more homework to understand how these arrangements work.
2. Prepare your house
Now you need to turn a critical eye to your home. This is often difficult for homeowners to do but is probably the most important part in attracting buyers.
Most experienced real estate professionals will tell you that house issues fall into three categories: cosmetic problems, functional issues, and things you can't fix. The first two should be corrected to the greatest extent possible before you try and sell your home and the third, if any, should be addressed with the home's pricing.
Turn a critical eye to your house. Paint worn or strong/brightly colored walls in soothing neutrals. Replace carpeting or refinish floors. Clean your windows. Open your blinds. Replace light bulbs. People like clean and bright. Make sure that your home is cosmetically clean, bright and perfect.
Next, turn to the working items in your house. Fix what’s broken. Ruthlessly inspect appliances, the heating and air conditioning, the roof and other items. Consider investing in a home inspector to preemptively deal with any problems that might be found by potential buyers. This might cost you between $150-250 but may be worth the price to have peace of mind that you are covering all your bases. Fix everything that you can afford to fix; it will make all the difference in the world.
Finally, take a look at things that you can't change about your house: Is it on a busy road, adjacent to an odoriferous dairy farm or on an awkward flag lot? You may need to adjust or lower the price to entice buyers. Be realistic, but also keep in mind that you only need one buyer for your home.
The next step is to clear and clean it. People don’t like clutter, especially when it is not their clutter. With any luck, you’re moving soon. Why not pack up all those lovely things you’ve collected over the years and leave a few things out on shelves and countertops.
Your goal? Crisp, bright, clean interiors, closets and spaces. Then do the same outside. Pull the weeds, trim the trees, and wash the windows. Stuff like that costs you little and can really change the feel of your home. Here again, if you have lots of stuff in the yard, time for a yard sale!
Now that your house is crisp, bright and clean . . . it should smell good too! Invest in a few air fresheners for the house. Choice one scent and use it in two or three strategic places in the house. Placing an air freshener in the air intake of the HVAC (where your filter is) can magically transform the smells in the entire house.
3. Price your house
The number one mistake owners make is pricing their home too high. Price it too high and you might scare off potential buyers. Allow it to sit on the market and it gets stale. Buyers start to wonder what's wrong. Obviously, pricing right effectively helps a home sell faster.
To determine what you consider the home's fair market value, check out neighborhood sales from the past six months. Attend open houses and check out the competition. You can interview real estate agents, but be up front with them regarding your intention to try to sell the house yourself. Some may decline to speak with you, but many know that you still might need an agent and will welcome the chance to help you.
If you still are having a hard time, you can hire a professional appraiser to evaluate your property. This can cost as much as $500 but may be worth it to have the confidence in knowing your true value.
4. Market your house
The internet has taken away what used to be a real estate agent's ace-in-the-hole: the multiple listing service. For a small fee, owners can list their for-sale-by-owner listings on an MLS, giving them similar exposure to the market. Keep in mind that if you are not offering a commission to buyer’s agents, they are not likely to bring their buyers to your property. Consider offering a buyer’s commission and you will likely get a lot more interest.
Other outlets, including Craigslist and other websites geared exclusively to home-sales-by-owner draw home shoppers. If you use these online avenues to market your home, make sure the site gets a lot of unique visitors. You don't want to waste money on a site that doesn't get a lot of traffic.
Also, spread the word on social sites, forums you frequent and traditional media outlets like local newspapers.
Be prepared for the offer and the counteroffer on your home sale. If you have a firm bottom-line in mind, make sure it's justified with strong research and weigh the cost of continuing to market the home.
Market conditions dictate the offers you will be getting more than anything else. In a strong sellers market, you may receive several competing offers on your home including some that may even be over the asking price. Be careful here with offers that require financing as, regardless of the offer price, a bank still must agree on the value to make a loan on the property.
In slow markets, you may only get one offer and it may take awhile to get it. Be patient. Again, you only need one buyer.
6. Closing the deal
Make sure you are familiar with the required paperwork for a home sale in your state. In California, it is common but not required to use an escrow company. An escrow company acts as a neutral party between you and the buyer to make sure all the necessary paperwork is completed and the finances are synchronized with the ownership. With so much at stake, it is highly recommended that an escrow company be used to ensure a successful transaction.
Hopefully, your buyer will have already shown you their written loan pre-approval and you will sail through the closing process. But be prepared for snags or delays along the way. Add some cushion to the closing date: Schedule your move and the turnover so that it's somewhat flexible, should the mortgage approval process be delayed.
Be prepared for the results of any home inspections and appraisals, and come to the closing table with everything mandated by the laws in your jurisdiction. This is where an escrow company’s experience can be extremely helpful in anticipating and aligning all the pieces to ensure a timely and successful close.
Best of luck in your sale! If we can be of service in any way, don't hesitate to ask.