Monday, April 28, 2008

For Sale By Owner Top 10

For Sale By Owner. Everyone wants to try to save a commission. Here's an answer you wouldn't expect from a Realtor. Give it a shot. Yes, you heard me. Put a sign in the yard and see what happens. If you're lucky, you'll sell your home for more than you hoped and have no problems. Congratulations. You're among only 16% of for sale by owner sellers who successfully sell their home without a REALTOR. The other 84% of For Sale By Owner Sellers end up using a REALTOR. I like to compare selling with a REALTOR to building your own home. Can you use a hammer and a saw? Sure, most people can. Maybe you even have some skill. I'm not bad when it comes to electric -but I can't seem to do a single plumbing job with screwing it up. If I spent the time and took the training - I am confident I could be a plumber too. But plumbing, electric, carpentry, concrete work, roof work, etc. I don't have the time or desire to learn all those things. I'd rather pay someone I KNOW would do a good job. The same thing goes for real estate. Yes, you CAN do all the things a REALTOR does. With enough time and training - you might even be good at a few of them. But all of them?
If you're determined to sell your home by owner - nothing I or any REALTOR says will change your mind. Hey, I don't blame anyone for trying to save a few dollars. But the problem often occurs when By Owner sellers keep walking down the same path-when nothing is working. Perhaps the biggest decision you'll need to make isn't whether you should sell by owner or not - the decision will be when do I give up on selling by owner and start using the services of a REALTOR. Even my own sister tried selling by owner. They put out the word to all their friends and family, put the sign in the yard and waited for an offer. They had lookers -but no offers. 3 weeks later - I listed their home for sale. For her, it was an easy decision because she knows what I do for my clients. But you may think - what is a REALTOR going to offer me that I can't do for myself? In honor of David Lettermans top 10 list - here are the top ten things to consider when selling by owner:

  1. BRANDING YOURSELF AS A SERIOUS SELLER- When buyers look at homes for sale by owner, they often get the sense the seller isn't serious. Maybe the house hasn't been prepared for the market or maybe the sellers don't respond quick enough to buyers questions. Also, By Owner sellers will often tell buyers "I Don't need to sell". While this is often an attempt by the seller to position themselves for negotiation, buyers take it as a sign the seller isn't serious about selling. When a REALTOR lists a home for sale-buyers know that the home is ready to go.
  2. MARKET PREPARATION- I'm not just talking about preparing the home for sale. I'm talking about preparing you, the seller, for the sale. Yes, preparing the home is very important. Those who have sold by owner often list "Preparing the Home for the Sale" as one of the hardest aspects of selling by owner. You want to improve your home enough that is attractive and ready for buyers - but not over improve for the neighborhood and risk having an overpriced home. You want to consider little things like leaving the lights on for showings or bringing buyers into the neighborhood from a particular route. A REALTOR looks at your home like a buyer would and helps you do the same. Walk in the front door - what do you see? No, it's not your beautiful collection that took you 10 years to assemble. It's clutter to the buyer. Preparing the seller for the sale includes what to expect for showings, offers and "give backs" a buyer might request to close the transaction.
  3. TRANSACTIONAL EXPERIENCE - The average years of experience for a REALTOR are 13. During this time - we have been involved in the purchase and or sale of over hundreds or thousands of homes, townhomes, condos or apartment buildings. Each transaction has it's own unique set of circumstances. As a professional, we can draw on those experiences and share them with our clients as we walk through the home sale or purchase process. Yes, sometimes a home sale goes through without a hitch. If you are doing it on your own - you have a lot of learning to do in a very short time period. If you're lucky - you will have no problems. But what if you do have problems? Who pays for the inspection? Should you hold a mortgage? How much extra value does that remodeled bathroom add? Are these buyers serious enough that you should take your home off the market and sign a contract? Waiting until these questions come up in a negotiation may be too late.
  4. PROFESSIONAL CONTACTS - Each time I help homeowners buy and sell a home I always refer them to people I know and trust - loan officers, appraisers, attorney's. Maybe you've had an experience when a Realtor just pushed you too hard to use one of their "friends" and you didn't like it. As Realtors, we see many home sales fall apart for a variety of different reasons - someone missed a deadline, there was mis-communication to the buyer, seller or lender. Sometimes a buyer or seller gets upset after the closing because of an un-noticed defect in the home or cost at the closing table. The Reason so many Realtors try to get home buyers & sellers to use people we recommend is because these are people we trust. We have closed many transactions with them in the past, we probably even use them ourselves when we buy or sell real estate. In short - we know the professionals that will protect our clients in an honest and professional manner. If you know someone like this, wouldn't you recommend them?
  5. PRICING EXPERIENCE- pricing a home is a very important part of the home sales process. Yes, I'm going to quote statistics from the National Association of Realtors (NAR). I've often heard these numbers discounted because they are "self-serving". But let me ask you this - who tracks the sales of homes on a nationwide basis more than any other group in the united states? Who does the government quote when they are preparing statistics on the state of the economy? The NAR - That's who. When I list a house -I spend a lot of time going over recent sales in the area - comparing neighborhoods and features, taking things like time of year or market cycles into consideration to make sure I can price a home properly so it will sell quickly. Homes that are overpriced stay on the market too long and the inevitable question from buyers is "Why has that house been on the market so long, what's wrong with it?".
  6. GET MORE $$$$ - plain and simple. In 2006, homes sold with a REALTOR sold on average for 32% more than those sold by owner. Buyers know the game too. They know that you aren't paying a commission - so they are likely to bring you discounted offers because they think you are saving money. When a REALTOR is showing your home - they will pull up comparable sales in the neighborhood to show the buyer realistic values. Your listing agent will already have done this when you listed your home - so these comparable sales will often overlap. This works to your benefit.
  7. EXPOSURE, EXPOSURE, EXPOSURE - Realtors are in the business of selling properties. That's what we do. That means we have established marketing procedures to get the word out about your house. We have certain websites we know produce traffic. We talk about the houses to our colleagues and potential buyers. We hold open houses and do agent tours. We are out there every day trying to think of creative ways to get those listings sold.
  8. THE REALTOR TOOLBOX- just like a carpenter or a plumber, REALTORS have tools to get the job done. I create single property websites for my listings, I have fliers designed to give enough information to make my phone ring, I have strategies to renew interest in a property when things are slow. I even blog about the homes I have listed. Hey, it's a full time job ;)
  9. KNOWING THE COMPETITION - this is related to pricing. REALTOR's are touring neighborhoods and houses on a daily basis. We know when a house 2 streets over goes on the market - we know how it compares to your house. We are even prepared to answer those questions when someone makes an offer compared to that "Other House". Is it in the same school district? Same neighborhood? Same Homeowners Association? All these things affect value -knowing how to answer these kinds of objections or questions helps you get the most money for your home.
  10. PROFESSIONAL REPRESENTATION- All of the above are good examples of how a REALTOR will professionally represent a seller. But another thing to consider is that extra layer of "distance" you get from the transaction. Selling by owner means you are walking around the home with potential buyers. They are constantly reminded that this is "your" house, not theirs. When a REALTOR takes a buyer through the property, it immediately helps the buyers start seeing it as "their next home". There are also buyers out there who count on finding an uneducated seller. Maybe they are slipping something into the contract that benefits them in an unfair capacity. Maybe they are being less than honest when painting their own financial picture in order to negotiate a better deal. As REALTOR's, we have seen all the tricks and know how to prepare for them. We also help keep everyone level headed in the transaction. It's often hard not to get offended or angry when someone low balls your home or talks about the defects. REALTOR's can help lay out these problems in a matter of fact way and respond rationally so as to keep the transaction on track to a close.

I hope all these tips help you when it comes time to list your home. It's a buyers market today and now, more than every - it pays to have someone in your corner who knows how to make things happen!

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