FSBO
- Can I sell my house myself?
Many people believe they can save a considerable amount of
money by selling on their own. They look at the average
commission
on a house and remember stories of friends or relatives who
managed to get through the process with seemingly little trouble.
"Other people have sold their own homes," they say —
"so why can't I?"
Approximately 10 percent of American homeowners handle their
own sales. But in order to do this, you'll need to realistically
assess exactly what's involved. The routine parts of the job
involve pricing your house accurately, determining whether or not
a buyer is qualified, creating and paying for your own
advertising, familiarizing yourself with enough basic real
estate regulations to understand (and possibly even
prepare) a real estate contract,
and coordinating the details of a closing.
These are serious responsibilities to take on, and they include
the concerns that your house is only on the market
when you're home, your marketplace is limited to those you can
reach locally, and a mistake may cost you the money you're trying
to save.
The best reason for working with a real estate
broker
is the enormous amount of information they have at their disposal
— information that can help make your house sell faster and
easier. Professionals know about market
trends, houses in your neighborhood, and the people most likely to
buy in such neighborhoods. They also know how to reach the largest
number of people who may be interested in your house (both through
old-fashioned sales skill and the Internet resources of a
reputable real estate company), and are trained in areas like
screening potential buyers and negotiating with them. Finally,
they're always "on-call," and willing to do the things
most of us don't: working on the weekends and answering the phone
at all hours.
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MARKET
CONDITION
- What makes a house sell?
This entire book could be devoted to answering this question.
But to be as concise as possible, a successful sale requires that
you concentrate on six considerations: your sale price, your terms
of sale, the condition of your house, its location, its
accessibility, and the extent of marketing exposure your house
receives. While some of these factors are beyond your control
(such as the actual sale price), you can compensate by taking
advantage of others (like a new paint job) to make your property
as attractive to prospective buyers as possible.
- When is the best time to list a house for sale?
The "best" time to list your house is actually as
soon as you decide to sell it.
If you want to get the best price for your house, the key is to
give yourself as much time as possible to sell it. More time means
more potential buyers will probably see the house. This should
result in more offers;
it also gives you time to consider more options if the market
is slow or initial interest
is low.
- Is there any seasonality to the market?
Peak selling seasons vary in different areas of the country,
and weather has a lot to do with it. For example, late spring and
early fall are the prime listing seasons in many areas because
houses tend to "show" better in those months than they
do in the heat of summer or the cold of winter. And of course,
people like to do their house shopping when the weather is
pleasant.
But keep in mind that there are also more houses on the market
during the prime seasons, so you'll have more competition. So
while there is seasonality in the real
estate market, it's not something that should
dominate your decision on when to sell.
- What about market
conditions — price trends, interest
rates, and the economy in general? Should they have any
bearing on when I list?
Probably not. Even if you're under no pressure to sell, waiting
for better market conditions is not likely to increase your profit
potential.
SELLING
TIP
Create a "fact sheet" about your house and
neighborhood and distribute it to as many people as
possible. |
- How long should it take to sell?
Average listing times vary from 30 to 180 days, according to
market conditions in a particular region, town, or even neighborhood, and
of course, price, terms, condition, location, accessibility and
exposure play an even greater role. Selling in any market is
easier if you keep time on your side. Most professionals will tell
you that allowing yourself at least six months will put you in a
position to get a better return from their marketing efforts.
- What if I can't sell my old house before I have to move?
This situation can arise for any number of reasons. For
instance, getting the job promotion you've been waiting for may
mean having to relocate very quickly. Another example: you finally
find your "dream home," and need to get it under
contract
before it sells to another buyer. Whatever the reason, don't
panic. You have some viable alternatives to the worrisome
possibility of double mortgage
payments.
If you don't have to sell in order to buy a new home, consider
the advantages and disadvantages of renting your old house. If
you're being transferred before you've had a chance to decide on
the new house, you may be able to obtain a short-term rental of
your own while you're becoming familiar with the new area. Either
way, a local real
estate professional can usually help, by advising
you how much you can expect to pay for rent in your new city, or
what you need to charge for your current home to both cover your
mortgage payments and take care of other costs you'll entail as a
landlord.
Another solution available from some brokers is the guaranteed
sale plan, which is detailed in the next question.
- What if I do have to sell my current house first?
Some brokers offer guaranteed-sale plans, which are essentially
a written promise to buy your house at a pre-determined price if
it doesn't sell by a certain date. The amount of the guaranteed
price varies considerably between brokers.
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PRICING
- How do I price my house?
Always price your property sensibly.
It is important to be realistic about your home's value and
price it accordingly. To determine the fair market value, a real
estate professional can supply information on comparable homes
that have sold or gone under contract in your area.
- What is "fair market value," and how do I determine
mine?
Simply put, the fair
market value of a house is the highest price an
informed buyer will pay, assuming there is no unusual pressure to
complete the purchase.
To get an estimate of fair market value, contact me and ask for a
Comparative
Market Analysis (CMA) of your house. The analysis
will give you a realistic figure based on the most salient
features of the local real estate market. It should provide
information about recent sales of similar houses, including how
much they sold for and how long it took. A real estate
professional's price opinion is very helpful in determining the
right asking
price.
- What's the difference between fair market value and
asking
price?
You can assume that some negotiation will be necessary to reach
an agreement with a buyer. The professional who presents you with
the results of your CMA will provide all the data that establishes
fair
market value. Then, based on your own timing and
marketplace variables, your real estate professional will be
willing to help you establish a competitive pricing strategy.
Generally speaking, the owner's asking price — the advertised
price of a house when it goes on the market — is set slightly
higher than fair market value.
- Who can help me determine the right asking
price?
Real estate sales
professionals suggest asking
prices based on a wide array of information you may
not have at your disposal, including recent listing
and selling prices of houses in your neighborhood. If you're not
completely confident in their suggestions, you may want to order
an appraisal.
Next, establish clear priorities. If you had to choose, are you
more concerned with selling quickly, or getting the best price?
Someone else — a neighbor, friend or relative — may point
out advantages or disadvantages about your house that you hadn't
thought about. Third-party views will help you start thinking of
your house as a commodity, with positive and negative selling
points. Then you should decide on a price that you feel is
competitive and consistent with what other houses in your area
have sold for.
- How flexible should I be about the asking
price?
Generally, the first three weeks will be the test period of
your initial asking price. If you see showings drop off and very
few return visits, you may want to consider repositioning your
asking price. Most buyers leave room for negotiation when they
make an offer.
Thus, a certain degree of flexibility is usually called for on the
part of both the buyer and seller.
While it is ultimately your decision to accept or reject an
offer, or present a counter-proposal, a good sales
professional can be of great assistance to you
during the negotiating process. In fact, negotiation is one of the
valuable skills a real estate professional can offer you. As
negotiations proceed — whether in writing, face-to-face, or by
phone — your sales professional will inform you of your options
in responding to each offer from the buyer, so you can make an
educated decision as to how you want to proceed.
HOME
IMPROVEMENTS FOR SELLING
- Should I fix my house up before it goes on the market?
Unless your house is nearly new, chances are you'll want to do
some work to get it ready to market. The type and amount of work
depend largely on the price you're asking, the time you have to
sell, and the present condition of the house.
If you're in a hurry to sell, do the "little things"
that make your house look better from the outside and show better
inside. Read on for several specific ideas for making low-cost
improvements.
- What is "curb appeal," and how do I create it?
"Curb
appeal" is a common real
estate term for everything prospective buyers can
see from the street that might make them want to turn in and take
a look. Improving curb appeal is critical to generating traffic.
While it does take time, it needn't be difficult or expensive,
provided you keep two key words in mind: neat and neutral.
Neatness sells. New paint, an immaculate lawn, picture-perfect
shrubbery, a newly sealed driveway, potted plants at the front
door — put them all together, and drive-by shoppers will
probably want to see the rest of the house.
Then, for both the inside and outside of your house, if you're
going to repaint, choose neutral colors, and keep clutter and
personal knick-knacks, photos, etc. to a minimum. Remember, when a
family looks at a house, they're trying to paint a picture of what
it would be like as their home. You want to give them as clean a
canvas as possible.
- What should I do to make the house show better?
First, make your house look as clean and spacious as possible.
Remember, people may look behind your doors — closet and
crawlspace doors, as well as those to the bedrooms and bathrooms.
So get rid of all the clutter; rent a storage space if you need
to, hold a garage sale or call a local charity.
After you've cleaned, try to correct any cosmetic flaws you've
noticed. Paint rooms that need it, re-grout tile walls and floors,
remove or replace any worn-out carpets. Replace dated faucets,
light fixtures, and the handles and knobs on your kitchen drawers
and cabinets if needed.
Finally, as with the outside of your house, try to make it easy
for prospective buyers to imagine your house as their home. Clear
as much from your walls, shelves, and countertops as you can. Give
your prospects plenty of room to dream.
It is always best to gather specific ideas on
how to make your house look its best. Additionally, ask your real
estate professional for any company brochures or videos on the
subject. Such materials are usually free and extremely helpful to
most homeowners.
SHOWING
TIP
Before you list, give your house a bath — most equipment
rental shops carry power washers. |
- Should I make any major home improvements?
Certain home improvements that are useful to almost everyone
have proven to add value or speed the sale of houses. These
include adding central air conditioning to the heating system;
building a deck or patio; finishing the basement; doing some
kitchen remodeling (updating colors on cabinets, countertops,
appliances, panels, etc.); and adding new floor and/or wall
coverings, especially in bathrooms. On the other hand,
improvements that return less than what they cost are generally
ones that appeal to personal tastes that not everyone may share,
like adding fireplaces, wet bars and swimming pools, or converting
the garage into an extra room.
The challenge that comes with any home improvement designed to
help sell your house is recouping your investment. There's always
the risk of over-improving your house — that is, putting more
money into it than neighborhood prices will support.
So how much is too much? Professional renovators have found
that, no matter how much you improve any given house, you're
unlikely to sell it for more than 15 percent above the median
price of other houses in the neighborhood, whether you do $1,000
worth of work or $50,000. That's why you might want to ask your
sales
professional's opinion about the viability of
recouping the cost of any major renovation you have in mind before
you start the work.
- Should I do the work myself?
If you have the time and talent, do-it-yourself improvements
are the most cost-effective way to go. Painting, wallpapering,
replacing cracked trim and old plumbing fixtures — the
difference between work done by a competent amateur and a
professional is usually time and money. Just make sure you don't
tackle something you can't handle — this is no time for
"on-the-job training." If you're not experienced, it may
be worth calling in a professional.
Larger jobs involving mechanical systems (heating, electrical,
plumbing, etc.), or work that must meet local building codes, are
another story. Even if you or the family handyman know exactly
what you're doing, it's not a good idea to engage in this type of
work unless you're licensed to do so. Your attempts could make you
responsible for more than you realize if something you worked on
goes wrong after you sell.
- Am I liable for repairs after I sell?
Yes. If the buyer's inspection
reveals major problems with your house's structure or mechanical
systems (heating, electrical, plumbing, etc.), the buyer may wish
to negotiate the price downward on the basis of anticipated repair
costs. So even though the repairs won't be made until after the
sale, practically speaking, you'll be paying for them.
Sometimes, repairs may be required before the transfer of
title
takes place. This is especially true in sales that involve
financing that's insured or guaranteed by the government (FHA/VA
loans, for example).
You may also have heard about lawsuits involving sellers who
failed to disclose major problems before the sale — like an
addition to the house that wasn't built to code. Most states now
maintain very specific disclosure laws that require sellers to
disclose any pertinent information related to the condition of the
property. For example, most states require sellers to notify
buyers about the presence of any lead-based paint. It is important
for you to be knowledgeable about your state's disclosure laws.
These are just a few good reasons to retain a lawyer or
sales
professional who know as much about the condition
of your property as you do. It's also a good idea to get the
buyer's written acknowledgment
of any major problems when you accept their offer.
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HOME
WARRANTIES
- What about home warranties? Are they available to sellers as
well as buyers?
Yes they are, and they're worth investigating. It's our belief
that the a home warranty is one of the best selling
points you can add to your house. It's easy to see why. After a
buyer has invested substantial funds in a down
payment and moving expenses, the last thing they
want to worry about is a costly home repair. With a home warranty, they don't have to.
The warranty
offers protection for you and your buyer, covering repair or
replacement costs for breakdowns to most major systems and
built-in appliances for up to a year after the date of closing.
In many states, there is no additional cost to sellers who provide
coverage for their buyers, except for a small deductible if you
make a claim. And when you consider the peace of mind that comes
with knowing 24-hour emergency service is always just a phone call
away, it's hard to imagine a better investment.
SHOWING
TIP
Buyers want kitchens to be spotlessly clean and efficient,
with as much counter space as possible. |
MARKETING
YOUR HOME
- How do I reach the right potential buyers?
Today, people are moving farther and more frequently than they
used to; it's not unusual for upwardly mobile executives to
relocate across the country more than once in a year. The result
is that the pool of potential buyers for your house is much larger
and spreads far wider than ever before, and the competition to
reach them is fierce.
| These
developments make it more important than ever to choose the
real
estate company with the most sophisticated
and savvy marketing techniques. Companies with
much-visited Web sites, extensive available listings, web
tools designed to help consumers buy and sell, and
prominent, effective advertising and marketing materials
are essential for identifying the right buyers and
convincing them that yours is the house for them. The yard
sign is just the beginning, but with a knowledgeable sales
professional, your selling process can promptly reach a
happy ending. |
- What's an MLS and why do I need one?
A Multiple
Listing Service, or MLS, is another resource to
help ensure you reach a large number of prospective buyers and
dramatically increase the exposure of a property.
Quite simply, it's a system under which participating brokers
agree to share commission
on the sale of houses listed by any one of them. So, for example,
if you list your house with one broker
and another broker actually sells it, they share the commission.
The advantage to you is clear; more people have an interest in
selling your house.
Over the years, the MLS concept has grown from a strictly local
sales tool into a powerful national marketing system.
SHOWING
TIP
Remove any attached decorative items — e.g.,
chandeliers, stained glass, etc. — that you don't intend
to sell with the house. |
- How important is advertising?
Advertising remains an important component in the marketing
process. Today, however, this means much more that an ad placed in
the local newspaper. Today's real estate brokers have the
knowledge and resources to market your home through an array of
proven modern methods, including TV, magazines, radio, the
Internet and direct mail in addition to traditional print
advertising. They are trained to determine where the pool of
buyers for your particular property might most likely be found and
from that, can best determine the type of advertising that is best
for your property
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OPEN
HOUSE
- What should I expect from an open house?
The open
house is another valuable part of the marketing
process, offering prospective buyers the chance to view houses in
a low-pressure, "browsing" atmosphere. With that in
mind, you shouldn't expect it to generate a sale, at least not
directly. What you should look for is interest expressed and
requests for private showings made to your sales professional in
the days following the open house.
Open houses are always valuable. If many prospective
buyers attend, it shows you that the property is attractive and
saleable. If very few people show up, it can indicate that the
price is too high, and cause you to look for ways to improve Curb
appeal. Try not to draw your own conclusions —
your sales
professional will give you a full report on
open-house activity and offer a professional assessment of its
results.
Sales professionals often hold an open house for other sales
professionals shortly after a house is listed. This event, usually
held mid-week when real estate people can give it their full
attention, can be as important to your efforts as your listing
in the local MLS. The more professionals who see your house, the
more prospects you're likely to reach.
- Should I try to avoid being at home when the house is shown?
You should definitely plan to be out of the house during any
open
house your sales professional has scheduled; the
same goes for first showings to prospective buyers. People often
feel uncomfortable speaking candidly and asking questions in front
of current owners. You want them to feel as free as possible to
picture your house as their "dream home."
- Who actually sells my house — a broker
or a sales professional?
Both. In legal terms, a real
estate sales professional is an individual trained
and licensed to act for other people looking to buy or sell a
piece of property. While that definition applies to both, the
broker is permitted to collect fees and/or commission
for such work.
Thus, the sales professional — with whom you have most of
your day-to-day contact — works on behalf of, and is compensated
by, the broker.
- Will my sales professional be present at the
closing?
If you wish. while the law does not require their presence,
both the buying
agent and the selling
agent may attend the closing.
Even though most of the procedures are handled by the lenders, title
companies, and in some cases an attorney, you'll find that your sales
professional can be a valuable source of
information and counsel, especially if any last-minute problems
arise.
Good sales professionals are also extremely helpful in the days
immediately prior to the closing. They'll help you prepare by
giving you a step-by-step preview of the entire process and what
will be expected of you. And they'll make certain you bring all
necessary documents and other information.
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WORKING
WITH A REAL ESTATE PROFESSIONAL
- What makes a sales professional effective?
We believe good training and experience make the best
sales
professionals. But the truth is, not every sales
professional is right for every seller. That's why we suggest that
you follow this simple formula to help you decide whether a
particular sales professional will work well for you
COMPETENCE + COMFORT = CONFIDENCE
Competence: When you first meet with a real estate
professional, they'll do their best to show you that they have
what it takes to sell your house. You can expect to see a
portfolio of credentials, past achievements, sales volume and
letters of recommendation. Look for evidence that their background
is relevant to your needs. The sales professional you choose
should also be up-to-date on the current pool of potential buyers
for houses like yours; professionals can stay informed of this
through real estate company Web sites, such as
sellingproperites.net, and
industry networking.
Comfort: The importance of being comfortable with your
sales professional as a person cannot be overstated. You're going
to be dealing with this individual on a regular basis, maybe for
months, during a time that can be emotionally trying for you and
your family.
It takes a unique combination of these two characteristics —
competence and comfort — to inspire the confidence a homeowner
needs to maintain peace of mind through the process of selling a
house.
- How do I find the sales professional who's right for me?
A good place to start is by talking to friends, neighbors, and
relatives — anyone whose recommendation you trust. You can also
try responding to sales
professionals' local advertising, direct mail, or
Web site profiles. If they have the resources and initiative to
maintain such a presence in your marketplace, it's a good sign
that they may have the sales skill you're looking for.
- Do I have to pay a commission even if I find the buyer?
That depends on the type of listing
you agree to. If you sign an exclusive
agency contract, you may sell the house on your own
without paying a commission. In an exclusive right-to-sell
agreement, you owe a commission even if you find the buyer. Which
type you choose may largely depend on which sales professional you
work with and how much trust you place in his or her abilities (as
well as how much time and expertise you feel you have to devote to
finding a buyer and negotiating a contract
on your own.)
- What is the advantage of an exclusive right-to-sell?
Incentive — it lets sales professionals know that their time
and effort will not go unrewarded. That's one reason the great
majority of residential listings are marketed under exclusive
right-to-sell agreements.
- What if my sales professional doesn't produce?
Besides commission,
the most important matter you negotiate at the time of listing
your house with a broker
is the duration of the listing contract.
Terms vary, but listing
agreements are seldom for less than three months or
greater than one year.
But what if you find yourself dissatisfied midway through a
nine-month contract? While the listing contract is legally
binding, some brokers offer homeowners an "out" if they
are unhappy with the services they are receiving.
- Why list my house with a Keller Williams
Broker?
Exclusive services that can make selling your house faster and
easier, and unparalleled expertise in local and national markets
— those are two of the most important reasons why no one can
sell your house more effectively than a Keller Williams professional.
Beyond that, we're sincerely interested in helping make the
experience of selling your home as smooth and easy as possible. So
even if you're not ready to list your house — if you simply have
questions about the market in your area, price or mortgage trends,
or anything else about real
estate as it relates to you — just pick up your
phone and call the Keller Williams office nearest you.
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