For Sale By Owner - Is it right for you?

If you are interested in pursuing the sale of your home as a “for sale by owner” (FSBO), the following areas will require your attention:

Prepare your home to sell.

There are plenty of books out there to advise you on how to do this. In a nutshell, you need to disassociate yourself from your home and put on the buyer’s goggles. Is your home attractive from the street? Your home will need curb appeal to attract buyers to the door. How does your home smell? Offensive smells turn away more buyers then any other single reason. Consider a fresh coat of neutral paint to give a clean palette to the next buyer. Bathrooms and kitchens must not only be clean, but also sparkle. Repair all the little things that you have put off for years such as leaky faucets, creaking floorboards, and squeaking doors. Clean closets, attics, basements, and remove most of your clutter as well as personal belongings. This will make your home appear more spacious and allow the potential buyer to envision it as “their” home rather then seeing all your “memories” on the walls. There is much more to consider so you’ll have to be critical and give your own home a true assessment.

Price your home competitively.

If you want to sell it, remember it is not what you think your home is worth, but rather what the market values your home as worth. This part can be difficult since it is, after all, your home and you know it better than anyone else. However, you must consider your competition and what is available at different price points. Make sure you do your homework here or else your home is apt to languish on the market.

Get a lawyer that specializes in real estate law.

This might seem unnecessary to you. After all, if you opted to not use a Realtor why would you want the expense of an attorney? Real estate laws are continually changing and what you don’t know could bite you. States have differing laws with respect to seller’s disclosures, purchase agreements, environmental issues and the list goes on. That is to say, every property and transaction does have its own set of unique characteristics (liens, easements, restrictions, encroachments, deed constraints, title insurance to name a few) and you don’t want to make what could be a costly mistake. This is most likely your largest financial investment…treat it with care.

Additional services to solicit from your attorney may include, but are not limited to: contracts, disclosure forms, lead based paint forms, and escrow services.

Begin marketing your home.

There are many methods out there. Use them all! You’ll need to get as much exposure as you can. If your house happens to be located on a main street or thoroughfare, that will be one advantage since you’ll get street traffic. Don’t count on that alone as your marketing plan…use signs, referrals, newspaper, home magazines, websites, brochures, open houses and all other creative approaches. To get the best price for your home, you’ll need to generate high volumes of traffic.

Qualify potential buyers.

This can be hard to accomplish, as most people are sensitive to sharing personal information. However, you’ll need to ensure before you head into the negotiation stage that this buyer is able to make the financial commitment that they are indicating.

Sharpen your negotiation skills.

Although many people don’t enjoy negotiating, it is an essential element to selling your house at the best price and in a timely manner. It is key to the negotiations process that both parties come away with a win-win. If not, it will be an uphill battle and most likely, not result in a sale. So begin with determining what flexibility you have with relationship to the terms, price, and the timeline of your transaction. Lastly, your attorney should review all offers to make sure they are in your best interest.

Anticipate home inspections.

Whether or not you are able to provide a previously performed home inspection, most potential buyers will elect to have their own home inspection completed. Don’t be offended it is just another assurance that everything is in working in order. You’ll want to make all areas accessible to the inspector so that he can give an accurate report.

Understand surveys, appraisals, and title searches.

When you get to this point, you most likely have a serious buyer, but don’t take for granted it’s over yet. The financial implications could still derail the transaction. Some mortgage lenders may want a survey of the property. This on-site measurement of lot lines assists the lender in determining whether there are any existing encroachments or easements. Appraisals are key in that your property must appraise at or above the negotiated price or else the lender will not provide the financing. So be prepared to assist the buyer in securing financing elsewhere if you want to complete the sale. Lastly, title searches are critical to determining whether you have a marketable title to transfer. Make sure that if there are any issues clouding the title you get them addressed early in the process so not to delay the closing and possibly lose the buyer.

Prepare for the closing. 

On the day of closing the buyers will want to perform a final walk-thru to confirm that all the previously agreed upon repairs have been made and that the home is still in the same condition that it was when the offer was presented. The closing can be done either at your attorney’s office or with a title company.  They will perform the “passing of the papers” and with your attorney and the buyer present all will inspect the closing statement for accuracy. While your primary concern as the seller is to receive payment, you’ll want to make sure that you have complied with all the buyer’s requirements. Other areas to be  addressed at the closing include: title evidence, seller’s deed, documents demonstrating the removal of undesired liens and encumbrances, the survey, and results of any required inspections (termites, lead based paint, radon, etc.).

Congratulations… Mission accomplished.   

If on the other hand, you decide perhaps this isn’t something you want to pursue after all, give Lisa a call and enjoy the piece of mind you’ll have knowing the sale of your home is in good hands!