NEW JERSEY For Sale By Owner Tips and Tactics

Transcription

1 NEW JERSEY For Sale By Owner Tips and Tactics An online informational resource provided by NJ-FSBO to help bring knowledge-value to the New Jersey home owner.

2 FSBO ADVISORY THE SMALL PRINT HOME OWNER Please Read This Disclaimer The decision to sell your home is critical to your financial future. When dealing with an asset of this size, there are pros and cons. In some cases, the financial savings never made their way to the bottom line. When figuring the amount of fees paid to outside consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing and advertising, the savings they originally sought were never realized. Please Read This Disclaimer The information contained in this e-book or in NJ-FSBO.com is for general information or entertainment purposes only and does not constitute professional financial advice. Please contact an independent financial professional for advice regarding your specific situation. In accordance with FTC guidelines, we state that we have a financial relationship with some of the individuals and companies mentioned in this website and within this ebook. This may include receiving access to free products and services for product and service reviews and giveaways. Any references to third-party products, rates, or websites are subject to change without notice. We do our best to maintain current information, but due to the rapidly changing environment, some information may have changed since it was published. Please do the appropriate research before participating in any third party offers. NJ-FSBO does not guarantee any product or service or information contained or published. Any individual should seek professional counsel or services before considering any content or information.

3 AUTHOR S PAGE: Anthony DiMaio Anthony DiMaio is a successful communication strategy and media consultant. His approach to communication strategy reflects his diverse career path and skillset, which include a playscout for Warner Communications, nine years working on the floor of the NYSE, and two decades as a media specialist and brand architect for public companies seeking to gain recognition and exposure and raise capital within the capital markets. He also works as the communications coordinator for an NYC non-profit, helping them to raise millions in contributions and grow in membership. As a principal Communications Strategist for his company, Anthem Communications, he simplifies the process of message management within budgets that increase the marketing ROI. Follow NJ-FSBO on

4 TABLE OF CONTENTS: Table of Contents Be Informed Benefits of a Selling Agent FSBO Risks Why Go FSBO Chapter 1: Selling Your House A FSBO Road Map The Plan The Price Marketing The Close Chapter 2: Real Estate Sites on the Internet Getting to Sold Final Thoughts Chapter 3: Your FSBO Team FSBO Team Card FSBO Professionals Get Started

5 "For Sale By Owner" Tips & Tactics Be Informed, Be Advised: FSBOs Carry Additional Risks One of the purposes of this ebook is to enlighten the home seller of the responsibilities that accompany a FSBO. The two biggest factors when selling a home are first, price, and secondly, timing. Without the ability to close a sale with all alacrity, the FSBO risks getting the price he or she needs. FSBO s are time-consuming, and unless you have the ability to show and tell about your property, it is likely that you risk the ability to close. FSBOs often sell at a discount of 4-14% to the current market. Source: National Association of Realtors // Page 5

6 Benefits of a Selling Agent NJ-FSBO Tips & Tactics Because There is No Perfect House A NAR national study showed FSBOs sell for up to 4-14% less than a transaction represented by a broker. Many FSBOs end up paying 3% to a broker who brings them a buyer. Often, most FSBOs take longer to sell. There is a risk that a FSBO will unknowingly violate laws and open themselves up to a lawsuit from the buyer in the future. Most FSBO home sales have higher cancellation rates on average The decision to sell your home is critical to your financial future. When dealing with an asset of this size, there are pros and cons Most homes sell for a higher price when represented by a selling agent A selling agent will protect you against underpricing markets can change rapidly, and you don't want to be the last to know. Access and availability. You may not be home when a buyer can come. Screening the "Lookers" Lack of time to do proper follow-up Exposure to prospect base Advertising knowledge Ability to pre-sell property based upon buyer's criteria Inexperience in handling objections Ability to properly show a property Negotiation skill Fiscal screening Ability to recommend mortgage sources Ability to deal with closing issues Overcoming a stale property // Page 6

7 FSBO Risks NJ-FSBO Tips & Tactics Risks of a FSBO Selling a home involves a great deal so carefully consider the risks. Close to half of FSBO's said they would hire a professional next time. Another 30% of those FSBOs said they were unhappy with the results. Many FSBOs underestimate the commitment of time, effort, education, & organization involved in selling a home. Many FSBOs end up feeling that the time, paperwork and everyday responsibilities involved were not worth the amount of money they saved in commissions. In some cases, the financial savings never made their way to the bottom line. When figuring the amount of fees paid to outside consultants, inspectors, appraisers, title lawyers, escrow and loan officers, marketing and advertising, the savings they originally sought were never realized. Take the FSBO Self-Examination Do I have the time, energy, know-how, and ability to devote a fullforce effort? Am I prepared to deal with an onslaught of buyers who perceive FSBOs as targets for low-balling or just aren't serious? Am I offering financing options to the buyer? Am I prepared to answer questions about financing? Do I fully understand the legal procedures, consequences and necessary steps required in selling a home? Do I have any sort of insurance that will protect me from lawsuits because I handled my home sale myself? Do I have the capability of handling the legal contracts, agreements and any disputes with buyers before or after the offer is presented? Have I contacted the necessary professionals... title, inspector (home and pest), attorney and escrow company? As with any investment of significance, it is best handled by professionals who understand the business and are licensed and insured. Before deciding to go FSBO, we recommend that you discuss your options with a licensed real estate professional. // Page 7

8 "For Sale By Owner" Tips & Tactics Why Go FSBO WHY FSBO? Selling your home without a broker represents a significant commitment for you and for those whom you engage to participate on your selling team. The first thing you will need to decide is whether you want to be a for sale by owner (FSBO). When you decide to FSBO, you will potentially save money on the commission; in exchange you will be responsible for all the elements that go into a real estate transaction. A FSBO means that though you are selling your home without the help of a broker, you should cooperate with a buyer's broker should they bring a qualified buyer to you. // Page 8

9 CHAPTER 1 Selling Your Home: Breaking Down the Process into Bite-Size Chunks Selling a home is one of the biggest events that occurs in a person s life. It is emotional, unpredictable and often stressful. But on the other side of the equation some home sellers can look to save tens of thousands of dollars on brokers commissions. Before you jump, do your research. // Page 9

10 A FSBO Road Map: Get Serious: One, Two & Three There are many parts or tactics to the FSBO puzzle, but the 3 major parts of a home sale are the plan, marketing your property and then the close. Print out this page and fill in the tactics. Primary Objective Visibility Value Information Urgency Secondary Objective Clear the way for the transaction One: The Plan Two: Marketing Three: The Close - Tactic - Tactic - Tactic - Tactic - Tactic - Tactic - Tactic - Tactic - Tactic - Tactic - Tactic - Tactic // 10

11 The Plan NJ-FSBO Tips & Tactics When do you plan to sell? Set a deadline with at least 6 weeks of flexibility. Is your legal paperwork in order? Put your ownership documentation in order (mortgage, 2nd mortgage, liens). Confirm deed, property lines. Compare property descriptions with what is on file with county clerk. Property assessment value. By when do you want to sell the house? How active has your local real estate market been? Are there any properties for sale on your block? Do you know the listing price and the actual selling price of homes in your area? List all homes recently sold in your area for one year. Are you providing a comparative market assessment to assist in setting your price? Have you inventoried all of your appliances and fixtures included in the sale? // Page 11

12 The Plan NJ-FSBO Tips & Tactics List advertising sources that you intend to use. Have you completed your various inspections done and the results available for potential buyers? Do you have your seller's disclosure prepared and available for potential buyers? Have you created an online posting (website) displaying numerous highquality photos and making all of the inspection reports and seller's disclosure available? Do you have a supply of fact sheets available which inform potential buyers where they can find more detailed information? What s your phone availability? Be available by phone for the whole time your home is for sale. Be prepared to provide information over the telephone and to call back with answers you can't provide when you are first called. Prompt answers can be critical. How reachable are you by for the whole time your home is for sale? // Page 12

13 The Price NJ-FSBO Tips & Tactics The Price Is Right The expression You only get one chance to make a first impression often appears to be true when pricing a property. Deciding on an asking price is critical to selling property. The key is to remember the objective is to effect a transaction, not a competition. You will have a sense of what is fair, what is do-able and even what is the right price point only remember, the market is never stationary. It is fluid, and you have to price your property with that context in mind. FSBO Pricing: The Bottom Line Some people believe that pricing a property too high is better than pricing it too low. But every price should already have factored into it the figure you have to have in your hand at the end of the transaction. Level One: Research your Market Value Current market value is based on demand, trends, buying cycles, economic trends and UVP (unique value proposition) of your property. Depending upon the state of the market, most asking prices are usually higher than the market value and range between 1% and 10% higher. The reason to price the property is to allow for negotiation. // Page 13

14 The Price NJ-FSBO Tips & Tactics Level One: Research your Market Value continued There are a number of resources online that you can try, but if you estimate that your house s value is greater than $300,000, we recommend using a professional to provide you with a fair assessment. There are resources such as Zillow and Trulia, but for a solid benchmark of your home s value, get it professionally assessed. NJ-FSBO has several individuals who can provide this for you at a reasonable price. Your home appraisal will use sale prices, not asking prices, of homes in your market. This is much more realistic when deciding on your selling price. Contained within the report will be a section on "comparables," which are the homes similar to yours which have recently sold. Here are some easy-to-use resources: 1. homes.yahoo.com/home-worth realestate.msn.com 4. eppraisal.com realestatecenter.bankofamerica.com/tools/marketvalue.aspx 7. // Page 14

15 The Price NJ-FSBO Tips & Tactics Level One: Research your Market Value continued Conviction, confidence and comparables (AKA comps) will provide the foundation for your bottom-line price. There are times when you may have to drop your selling price, but I wouldn t do it without some sort of give-back. The value of the house is based upon a number of factors: what you paid for the property, what the other houses are selling for, is the market in an upcycle, how motivated is the seller, and of course how much do you owe on the present property? The fact is that today, yours is not the only house that the buyers are considering. Level Two: Your Selling Budget Marketing costs money. You don t want to waste time AND money; so make a list of different venues and ways to publicize your property to potential buyers. Signs Flyers Advertising on various sites on the Internet Listing on NJ-FSBO The exciting news is that you can get your signs, flyers, site and brochures through our relationship with Agency Logic. // Page 15

16 The Price NJ-FSBO Tips & Tactics Level Three: Our Secret Formula Do a Test Run-Through with a Staged Buyer This is a great way to have someone looking at your house from the perspective of putting their money down to acquire it from you. Remember, the biggest thinking shift is to NOT think of someone in your house as a guest. They are a customer. Treat them like a customer, which means get their names, contact information, and ask them to have a look around. Don t follow them around. Let them discover their new home. It is important to detach from the ownership cues that normally most home owners give off. Think of yourselves as the resident house sitters. Make sure that everything you include in your flyer points to unique features, values and distinctions, such as Voted New Jersey s Best Town or Voted New Jersey s Best Middle School. Get your lawn signs printed: make sure they have a URL, phone number and . // Page 16

17 Marketing NJ-FSBO Tips & Tactics How ready are you to sell? How quickly do you want to sell? Know the listing price and the actual selling price of homes in your area. Advertise your home in as many places as possible. Have your various inspections done and the results available for potential buyers. Have your seller's disclosure prepared and available for potential buyers. If a problem is disclosed, neither the buyer nor the buyer's agent can come back later and renegotiate the offered price by demanding that you pay for the already disclosed problem. Create a web site displaying numerous high-quality photos and making all of the inspection reports and seller's disclosure available. Keep a constant supply of fact sheets available which inform potential buyers where they can find more detailed information. Be available by phone for the whole time your home is for sale. Be prepared to provide information over the telephone and to call back with answers you can't provide when you are first called. Prompt answers can be critical. Be reachable by for the whole time your home is for sale. Reply promptly. Check your spam filters to make sure potential buyers are able to reach you. Make sure your anti-virus software is up to date. Make sure that an adult with a key is always available to show your home to buyers. // Page 17

18 Marketing NJ-FSBO Tips & Tactics Is your home priced right? Have you fixed everything you wanted to fix? When you host an open house place as many signs leading to your home as possible. Be sure the sign has enough information available that a prospective buyer can reach you. Answer your phone while hosting the open house. Know as much as possible about the competing homes for sale. Potential buyers will be well informed and will "play" the strengths of those homes against the weaknesses of your home while negotiating the sales price. Make sure Realtors know your house is for sale so they can bring their customers. Be prepared to pay them their standard buyer's commission and don't expect them to do the seller's tasks. They will be making their best effort to get the best deal for their buyer. An escrow account should be opened with a title company so that the sale can be safely completed quickly. Consider offering a home protection plan, especially when there are multiple properties on the market in your neighborhood. Be familiar with the protocol and procedures necessary to close on your house. Your title officer and loan officer will provide invaluable information to you. // Page 18

19 Marketing NJ-FSBO Tips & Tactics Have you proof-read your flyers? Is your property listed on Craigsist? Do you have binders pre-prepared? Do you have a distribution list? Are you on Facebook? Do you have a settlement agent? Do you have enough buyer s profile cards? Do you have a separate phone number? Do you have a website? Do you have a selling script? Do you have a real estate attorney? Is your house clean? Does your house smell new? Do you have enough signs? Do you have a buyer s informational package? Credit checks? Escrow accounts? // Page 19

20 The Close NJ-FSBO Tips & Tactics The Close The close is the culmination of weeks of preparation work and approvals including loan approvals, title search, inspections, negotiations and legal documents involving the transaction. This is where a local title company comes into play. Typically it is customary for the seller to choose the title services and to pay for the owner's policy. There are other costs and fees due at the time including: mortgage payoff, pre-penalty fee, attorney's fees, a broker's commission if you are paying the selling broker who represents the buyer, and any repair costs such as termite repairs, pro-rated taxes, transfer taxes, etc. The title company will provide you with an accurate estimate in the form of a closing statement. Short Closing Checklist Confirm and qualify buyers financial qualifications Come to final negotiated terms of agreement Have your lawyer advise you on specifics required by state and municipality Home inspector by buyer Lender s appraisal completed Provide buyer, buyer s agent and lawyer with all legal documents Notify your lender to initiate mortgage payoff process Provide disclosures as required by your state and municipality Provide property records, building permits and receipts for the appraiser Provide property records for the title insurer Provide insurance documents Provide mortgage, loan and lien documents Provide documents related to estate planning // Page 20

21 CHAPTER 2: Top Real Estate Sites on the Web BidSell.com This is an online auction site for home and commercial properties around the U.S. DomuSwap.com Ever felt like just trying to trade houses with someone? This site will help you do just that. FindMyRoof.com A free listing site for rentals and properties for sale. FizBer.com A site for those brave souls who want to go the whole nine yards and sell their homes on their own. List your home and open it up to a much larger market. ForSaleByOwner.com Sell whatever piece of property you may have a need to get on the market. HomeGain.com Search for homes for sale, locate a Realtor, value your home, get a mortgage and more. // Page 21

22 Top Real Estate Sites on the Web continued great research website for schools good listing service ByOwnerMLS.com Great listing site olx.com not a great selection of listings but free decent number of property listings Simple local free advertising Real good site, listings & offers good advice Not taking new accounts good listings with free, deluxe & premium fee features Lots of good features, free listing service plus other for-fee services // Page 22

23 Top Real Estate Sites on the Web continued Limited listing, but it is free and there are a good number of houses for sale Not organized by state, too much info Purchased by Weichart, great for comparative sense of market Pretty extensive listing service plus free listing service. Good for rentals, not much for New Jersey sales List for free... Pretty extensive Does not accept all ads // Page 23

24 Top Real Estate Sites on the Web continued HomePages.com Search for an area, get an aerial view of what it looks like, and see if there are any home listings in that area. PropertyMaps.com Search for homes for sale from the web or a wide selection of mobile devices. RealEstate.com Gives you the ability to refine your search for homes by location, price, number of baths, bedrooms and more. Redfin.com Looks to help you locate homes for sale. Not always complete or quick. Trulia.com Home search which gives local real estate data. Zillow.com Post your home for sale, let buyers see it and ask you questions about it. ZipRealty.com A limited database of homes for sale. // Page 24

25 "For Sale By Owner" Tips & Tactics Getting to Sold There is a great deal that pushes a house into the Sold column. There is supply, demand, economic factors, seasonal factors, condition of the property, financing, readiness to move, and most importantly, OTHER FACTORS. Whatever the market brings to you, don t be fooled not everyone is a buyer, and timing has a ridiculous effect upon a transaction. Expect the best prepare for the worst. IMAGE CAPTION // Page 25

26 "For Sale By Owner" Tips & Tactics Final FSBO Thoughts Want to make sure you re keeping your marketing campaign effective? Here are some areas to keep in mind: Make sure you have considered all of the areas of your house, the good, the bad and the unseen. Everything you put in writing must be able to be documented and proven. As hard as it might be, don t appear to be anxious; remember you have done your market analysis. If you are fair and completed all the appropriate renovations, your price should knock them over. Sometimes, it makes for a smooth sale to include certain furniture and fixtures that the buyers seem to find charming. // Page 26

27 CHAPTER 3: Your FSBO Team No one sells their home without valuable and timely contribution from individuals who collaborate with a common end.

28 "For Sale By Owner" Tips & Tactics FSBO Team Card No one sells their home without a strong team in place: Tel Lawyer Home Inspector Mortgage Advisor Web Designer Landscaper Marketer Home Stager Printer Videographer Title Officer // Page 28

29 CALL TODAY If you re interested in improving your planning and marketing of your home, contact us today. We will give you all the resources you need to get the process started.