Sell your own house and keep the profits
So, do you want to sell your own house? Maybe you want to save money on a commission that would be paid to a broker. Perhaps you are one of those people who believes that selling a house is a simple process because it seems so easy on television. I understand that it’s probably not as hard as getting a root canal, but if you try it unprepared, it can feel 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 yet, international trends. Some markets have never seen a big up or down 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 create unwanted pressure to register with them; which I actually suggest for the vast majority of homeowners. Another way is to check your local newspapers which can reveal certain statistics, such as average days on the market, a comparison of selling prices with listed prices (they are rarely the same, except perhaps in an active market), and interest 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’ll 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 run the risk that the comparison will not be very accurate. Comparable homes should be as similar to your home 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 an amateur review, make sure your home is priced less than homes that offer more amenities and size, and more than homes that offer less. size or that they are not as up-to-date. . Knowing exactly how much these differences affect the price of your home from 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 is happening in the local market. If houses are selling fast, I suggest you stay close to your estimated price for a quick sale of your home. If homes are selling at a 3-6 month average rate (again, the average is different depending on location), you would consider keeping your estimated list price or up to ten percent less if you expect a quick sale. If homes don’t sell on average in less than 120 days, as an owner sale, you will need to price well below the competition, 10% or more. My reasoning for this is that highly marketed houses don’t sell, where your house will have a fraction of the advertising compared to listing with a broker. You will need an edge to beat the competition.
Well, we fulfilled the first step; appraising our house. This is actually one of the easiest tasks we will ever 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’re serious about this, I’d suggest listing on a reputable site. When it comes to advertising in the local paper, it certainly doesn’t hurt, but keep in mind that more buyers find your home online than through the local paper. However, the local newspaper appeals to older generations and can help with a cross-generational marketing campaign. Another consideration is that according to the National Association of REALTORS, 89% of home buyers surveyed in 2011 used an agent to purchase. That means that, like it or not, you will likely have to deal with an agent or pay them. Like an owner sale, 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 89% of buyers looking for a home with the help of an agent don’t avoid it altogether. Another marketing tool that you can use is a yard sign. These can be obtained relatively cheaply from a local print shop or online. If you have the guts to let strangers wander into your home, you can also host an open house. It’s estimated that nearly 5% of home purchases are made on impulse, so you can’t hurt your sales effort. I would like you to consider that bringing strangers into your home can be unsafe, so please proceed with caution.
All right, we’re moving toward 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 (trust me, fix the peeling paint) and complete any other small maintenance tasks that are needed.
Ok, now we can go ahead and list the house. The easy part is done, we’re moving on to the harder and harder parts of selling a home. 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 one cheap. 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 visit 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 personalized inside the house, as they’ll likely be imagining how they can change your house to suit their needs. If they 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 the back-and-forth negotiations may elicit an emotional response from you. Instead, insist on a written offer and a binding contract. They are likely to work with an agent, so this is usually a point of silence. When the offer comes, be emotional if it’s more than you expected, or less, as most buyers will expect the savings you received from not paying a commission to be passed on to them (Now, if you used my suggestion from offer 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 purchase a homeowners insurance warranty (what you need to do to save yourself a headache 6 months from now when your water pipes burst or your furnace fails with only 4 years old). The second is that they will probably put various contingencies on the offer, which are completely normal. These contingencies may include a home inspection, land survey, title insurance, tint 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 your toughest yet, but wait because you’re almost there. During this time, a home inspector after examining your home will compile a list of several hundred problems with your home. If he’s already disclosed these items on his seller’s statement, you shouldn’t be too concerned, as they won’t be items your potential buyer can use to back out of the transaction. Now, for the things you didn’t know about, buyers can try haggling the price even lower. I suggest that for small ticket items, stick to your guns. Higher value items will likely require some compromise on your part. Your other option is to make no compromises and try the entire process again, revealing the newly discovered problems. If things progress beyond this point, be prepared for more expenses at closing. You’ll 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 covered at closing. If your agent doesn’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, turn to an agent.