Elite FSBO Seller s Guide

Transcription

1 Elite FSBO Seller s Guide We believe that homeowners are highly qualified to sell their own homes. Most of us have a strong emotional attachment to our homes, and this affection can come through when you show your house to prospective buyers. Selling by owner isn t all that complicated, but it does require going through certain steps. We ve put together this short guide to help get you started. Elite FSBO, LLC Boulder County, Colorado FSBO (3726)

2 1. Make your house look great Before your invite a prospective buyer into your home, it s important to clean it thoroughly and make all repairs. Funny thing is, when you ve been living in your own house for so long, sometimes it s hard to see little problems such as leaky faucets or dirty corners. Take a step back and look with a critical eye. Interior Improvements First, eliminate clutter from every room even the kids rooms. It can be very hard emotionally to put your favorite personal belongings into a box. However, remember that prospective buyers will want to see your house looking its brightest and most spacious, and reducing clutter is the way to achieve this goal. Second, clean your house from top to bottom. Take a broom to hidden corners and edges to remove spider webs and dust. Clean off light switch plates and door handles. Have carpets? Rent a carpet cleaner for a day or two. You want your house to shine as much as possible. Hiring cleaners is of course an option. Finally, you may wish to hire a staging expert to help you make your home look irresistible. Studies show that empty homes aren t as appealing to buyers as homes with a bit of furniture and some décor. Can t afford it? Flip through some home design magazines and books at the library for inspiration. Exterior improvements Mow the lawn, trim bushes and trees. As with the inside of your home, remove clutter such as children s toys, gardening items, and other stuff lying around. If you don t have room to store things in your garage, consider piling everything up in one place and covering it with a brand new tarp. Dumpster rental In most of Boulder County, you can rent a small dumpster for a reasonable price. 2

3 2. Price your home wisely One of the most common criticisms of FSBO sellers is that they overprice their homes. This criticism is sometimes justified. Part of the problem arises from the fact that the 6% commission paid to agents is built into home prices throughout the US. Therefore, a home sold by owner should be priced a bit below market prices. That said, you also want to leave room for negotiating, so you don t want to go too low. Start with the Boulder County Assessor s Office A reasonable asking price is very important, so it pays to do a little research. To get started, take a look at the Boulder County Assessor s property search tools. At their web site, you can find properties similar to yours in your neighborhood and find out recent sales prices of homes similar to yours. To get started, click on the link below and then click on the button that says E-mapping. Boulder County Assessor The county maintains a complete list of property sales, freely available to the public, so you can find out the relative pricing for your house compared to other houses in your neighborhood. You ll also see the assessed value of properties at the county assessor s web site. Bear in mind that the county tends to under-price properties, so that homeowners are not stuck paying more tax than they should. Therefore, in a steady market, the county assessor s value of your home would most likely be less than the actual expected selling price. Comparative Market Analysis A professional real estate agent will typically provide you with 3-5 comps, or comparable houses, showing properties that have recently sold in the same neighborhood and that are of similar size as your property. You should find the selling prices of at least 3 houses in your neighborhood as a starting point. You may wish to print these out so you can show them to prospective buyers in support of your asking price. You can get this information online for a fee. You can also check out Redfin s advice and get lots of information on recent sales at the following link: Redfin CMA. To find the asking prices of homes that are currently for sale in and near your neighborhood, you can search via zip code at 3

4 Hire an Appraiser If you prefer, you can hire someone to appraise your home. The appraiser will have access to home sales and tax records, and their appraisal will take special aspects of your home into consideration, such as a new roof or landscaping. Competitive Pricing In order to be competitive, it may be reasonable to add 1-2% to the amount you realistically expect to get from a buyer, and make this your asking price. Also, everyone likes to get a little discount when they buy something! So if you price your house a little on the high side, be prepared to get offers below your asking price. Keep in mind that if your home is priced too high, people may shy away. Finally, remember that you are saving up to 6% of your home s price by selling your house yourself. So it may make sense to reduce your asking price a bit, especially if you need to sell quickly. Unless your home is in perfect shape, you may want to spend a little money to improve your home, such as by painting the hallway a new color, or buying some simple artwork for the bathroom. When you think you have a reasonable price for your home, you may wish to get feedback from friends and neighbors. Effective home descriptions A big advantage of selling your home by owner is that you can put useful information into the description of your home. For example, you can state that the price is negotiable. If your home has an upgrade or special feature, it is reasonable to increase the price accordingly and make a note of this in your description. On the other hand, if your house needs some work, it makes sense to determine how much it would cost to fix the problem, and reduce your asking price by that amount. 4

5 3. Talk to real estate attorneys and title companies Before you start showing your home to buyers, call a few real estate attorneys and title insurance companies, and ask what they can do for you. After a few calls, you should have a list of questions that you can use to evaluate their fees and services. Many title companies are fully capable of handling real estate transactions. They can provide a wealth of information and can help guide you through the process. In some areas, title companies will handle all aspects of the transaction and have in-house legal departments that can assist you with legal issues that may arise. Most attorneys love to talk, and many offer initial free counseling. This initial free session gives them the opportunity to describe how they may be able to help you out but leave your checkbook at home! After you have spoken to a few attorneys, then you can make a decision on which you prefer. To find advice online, search for the following terms: real estate attorney flat fee attorney for sale by owner FSBO. If you feel concerns about the selling process, or if your home has any unusual loans associated with it, having a real estate lawyer at your side provides peace-of-mind. You know you ve got someone looking out for your interests. 5

6 4. Market your home Now that you ve prepared your house for sale and you ve determined a reasonable price, it s time to write up an appealing description of it for your online ad. You probably remember what appealed to you when you bought the place. What do friends say when they walk through your house or yard? Think about unique aspects of the home, such as a large or fenced yard, mature trees, landscaping, or high ceilings. Remember that most home buyers are scanning numerous ads, so try to focus on the main points that will encourage a buyer to want to visit. You may find it helpful to start with one of the lead-ins below: Nearby parks Mountain views Great schools Quiet location Priced below market Great neighborhood Photos Digital cameras make it easy to snap photos of your home. However, probably the biggest mistake that sellers make is posting too many images. You should take a lot of photos on different days and from different angles, but then select 10 photos that tell the story of what your house is like. Most people get pretty tired of sifting through similar images of the same part of the house. Exterior Newly painted exterior New roof and windows Beautiful landscaping Recently renovated Cathedral ceilings Mature trees Take pictures of your home on a sunny day, preferably with the sun at your back. With so many sunny days, it s easy here in Colorado! Take one shot of the front of the house, and try to include a little sighting of the side in order to provide some perspective otherwise the house will tend to look flat. You may find it helpful to take a set of shots, look them over, and then take another set a few days later. Then you can choose the best photos to upload for your ad. If you don t own a digital camera, please give us a call! Interior Make sure each room is well lit. Usually it s best to have the lighting behind you, or to the side. On traditional real estate sites, you can find loads of pictures that look like someone forgot to turn the lights on. Pictures of dark rooms make a poor impression, so when taking 6

7 interior pictures, be sure to turn the lights on! And as always, get rid of clutter before taking pictures so your viewers can see the house. Open house Open house showings are a wonderful way to invite people into your home for a personalized tour. Many people will visit your home without intending to buy, but that s OK. Every person who views your home is a potential advertiser who can help spread the word that your house if for sale. In addition, an open house will motivate you to put your house into tip-top shape for viewers. When showing people your house, start with the backyard and end in the kitchen. Place some fresh flowers on the kitchen table or in the living room for people to enjoy when then come inside. Be comfortable letting your buyers have some quiet time. It can be tempting to talk a lot in an attempt to sell the house, but most visitors want to get a feel for the house and will appreciate not being distracted. Home Brochures You ll definitely want to print out your home ad from Elite FSBO. This short description of your home will provide an important take-home document for your visitors. House shopping can be overwhelming. By giving your prospective buyer a summary of your house details, you ll make it much easier for them to remember your house from among the dozens they may be considering. You know your house better than anyone, so you ll be well-prepared to describe the best aspects of the house. Does the sun stream into the kitchen in winter? Are there bulbs that burst into blossom in springtime? Sellers are obligated to disclose any problems with the house but you can also speak loudly about the things you like. Remember to mention other positive attributes associated with your house, such as nearby parks, low traffic, mountain views, good schools, and friendly neighbors. Keep safe during your open house Rent a safe deposit box for valuables. At the very least, hide them in a place where nobody will have time to look for them. It s a good idea to have two people showing the house to make it easier to cover all rooms. Collect names and contact info of visitors. 7

8 5. Negotiate an offer on your home A prospective buyer will either present an offer to you directly, or they ll have a real estate attorney present the offer to you. You ll want to take some quality time to read the offer. Typical contingencies provide the buyer time to sell their house or obtain a mortgage. However, a contract with numerous contingencies could be a sign that the buyer isn t likely to come through. If you have other offers, you ll want to give them a good look, even if the offered price is lower. Remember, as long as you have an offer, you have room to negotiate. If you feel comfortable with the language in the contract, you may wish to respond directly to the buyer and begin negotiating a final price. Alternatively, you may wish to hire a real estate attorney to go over the contract with you. A good real estate attorney will quickly help you understand the terms of the offered contract, and will bring up any points that you may wish to address. For example, if the buyer has requested linking escrow to their ability to sell their current home, your real estate attorney should be able to suggest ways to handle this in a counter-offer in a way that gives you more power, such as by allowing you to continue to show the house to other prospective buyers. A reasonable contract will have an escrow term of 30 days or less. Assess your buyer s financial qualifications A qualified buyer will be pre-approved for a loan, unless they are prepared to pay cash. Be sure to ask the buyer to present their papers from the bank showing pre-approval. Most lenders require at least a 10% down payment on a home, so make sure the offer and loan terms look reasonable. Counter-offers If you feel the buyer s offer is too low, make a counter offer. Counter-offers can be drawn up using the counterproposal form CP , available for free online at Remember, nothing is fixed until both parties sign a final contract, so you should feel free to negotiate with the buyer until you have an agreement that you both feel comfortable with. Multiple counter-offers If you receive more than one offer before committing, make sure to present only one formal counter-offer at a time to a single prospective buyer. Otherwise, you could end up in a situation where two buyers have accepted your counter-offers, and then you ll be in hot water that could land you in court! 8

9 6. Home inspections A home inspection is standard when selling your house. The buyer is allowed by law to perform a complete inspection of the property for sale. Usually, the inspection is performed by a professional, but occasionally the buyer may wish to perform the inspection. Based on the findings from the inspection, you may be obligated to make major repairs to appliances, plumbing, septic, electrical and heating systems. If you refuse to make the requested repairs, the buyer usually has the option to cancel their offer. If you are concerned about how your home will fare when inspected, you may want to have an inspection done before a potential buyer has one done. This way, you can address any problems before a buyer stumbles upon them. The following aspects of the property are inspected: Structural elements. Construction of walls, ceilings, floors, roof and foundation. Exterior evaluation. Wall covering, landscaping, grading, elevation, drainage, driveways, fences, sidewalks, fascia, trim, doors, windows, lights and exterior receptacles. Roof and attic. Framing, ventilation, type of roof construction, flashing and gutters. It does not include a guarantee of roof condition nor a roof certification. Plumbing. Identification of pipe materials and condition of all plumbing pipes. Toilets, showers, sinks, faucets and traps. Systems. Water heaters, furnaces, air conditioning, duct work, chimney, fireplace and sprinklers. Electrical. Main panel, circuit breakers, wiring, grounding, exhaust fans, receptacles, ceiling fans and light fixtures. Appliances. Dishwasher, range and oven, built-in microwaves, garbage disposal and smoke detectors. Garage. Slab, walls, ceiling, vents, entry, firewall, garage door, openers, lights, receptacles, exterior, windows and roof. Once the inspections are complete, the buyer makes an application to a mortgage lender. 9

10 7. Buyer s appraisal The mortgage lender will order an appraisal of the home to make sure they are not lending the buyer more than the house is worth. The lender may also order a surveyor to verify the property boundaries. They will also order a title search to determine if there are any liens against your property. If all goes well, the mortgage company will commit to give the buyer a loan. 10

11 8. Closing Prior to closing, you should notify your lender that you will be paying off your mortgage. After a closing date has been agreed to, you should contact your utility providers and advise them of your final billing date. The day of the closing, the buyer will do a walk through of the property to make sure all agreed repairs are completed and that the home is otherwise in the same condition as when the buyer made their offer. If problems arise at this point, sometimes the closing can still take place with funds held in escrow to remedy the problem. Closings usually occur days after you have signed the sales contract. In Colorado, closing usually takes place at a title company. Expect the closing to take about an hour. At the closing: Buyer presents evidence of homeowner s insurance Buyer signs documents required by the lender Buyer provides monies including Check for the new mortgage amount (from the lending institution) Down payment (payable to the lending institution) These two combined with the earnest money deposit should equal the entire purchase price of the home Closing costs are paid by buyer and seller Closing costs include loan processing costs, title insurance Closing agent establishes an escrow account for the buyer to cover property tax, homeowner s insurance, interim interest and possibly private mortgage insurance Any existing loans or liens are paid The property deed (title) is transferred from seller to buyer Title insurance is issued Legal documents are recorded The buyer gets the keys! The home seller will receive the proceeds of their home sale in one to two business days after the closing. Elite FSBO, LLC Boulder County, Colorado FSBO (3726) 11 March