Amy Hamilton, REALTOR

 
 For Sale by Owner: Everything you need to know about Selling a House on Your Own

Checklist for Selling a House

Selling a house can be a very involved process. By keeping track of your progress with this checklist, you can eliminate many of the pitfalls, time delays and aggravations that can erupt at any time during the house selling period. Bookmark this page so that you can return to it frequently and maintain control over the experience.

Preparing Your House--Interior

If you get the buyer into the house, it is important to make their visit as pleasant as possible--and that means having the whole house ready. You want them to be as comfortable as possible, and to linger in the home. A "turn off" will send them scurrying quickly to the next house on their list!

Preparing Your House--Interior
General

Many home sellers make the mistake of ignoring certain repair or maintenance items in the hope that a potential buyer will either not notice, or if they do, telling them that they (the seller) will repair or replace the item. Most buyers do not have vision. They are not able to look at a room that needs paint and carpet and imagine it fresh and attractive. Telling them that something will be cleaned, or painted, or repaired may work with some, but the majority will not be able to envision the house after the changes have been made and will scratch your house from their list.

Showtime!

Your house has been checked, inspected, and cleaned from top to bottom. You have priced it at what you feel is a fair price. The marketing and advertising program is in full swing. Now it is time to put all of the preparation into action: showings! All of the work that you have done up to this point will only have an effect when a buyer walks into your house for the first time.

Fact Sheets

Sometimes called house brochures, Fact Sheets are one of the strongest marketing tools that you or your Agent can use when selling your house. They are the information sheets that you find attached to many For Sale signs and can also be found inside homes for sale. They give information on the property and will often answer buyer's questions relating to items such as square footage, room sizes, and available schools.

Why should you use a Fact Sheet? First and foremost, because an effective Fact Sheet will put your house above others in buyer's minds. After looking at five or six houses in a single day, a buyer's mind tends to become a little mushy--after the second or third one they no longer remember which house had the beautiful deck off the kitchen and which house had the stunning master bedroom suite. With a Fact Sheet on your house in hand, they will be able to refresh their memory when they review their day and the houses they saw. In addition, Fact Sheets attached to the For Sale sign have the capability of "capturing" drive-bys. Rather than looking for paper and pen to write down your phone number and address--and probably losing it anyhow--prospective buyers will have a record of how to contact you as well as information about your house

What should a Fact Sheet include? At the very least, it should contain all of the most salable features of your home. In addition, it should give the total square footage, sizes of individual rooms, as well as any additional information about your house that you believe important. Indicating which schools serve your neighborhood is always a good idea. (Put a note saying that school assignments are subject to change--please call to confirm). Always put your phone number (or your Agent's) on any Fact Sheet as well as any special instructions regarding showings (e.g., due to our young children, we must keep showings before 9 PM).

Where should they be placed? One set of sheets should be in an all weather box attached to your For Sale sign. Another set should be inside the house. The dining room table is usually a good location there.

The best Fact Sheets are those that are printed on quality paper and use a glossy photo print. It actually is usually less expensive to do it this way, since printed color copies can cost as much as $1.00 apiece, while a 24 exposure roll of film can often be developed for less than $10.00. If you have Desktop Publishing software, you can make your Fact Sheets for not much more investment than the cost of the film and processing. With a glossy photo, you give your Fact Sheet a professional appearance.

Closing and Settlement

After the searching for a buyer has been done, the negotiations have been completed, the house has been inspected, and the mortgage has been applied for and committed to, the focus suddenly turns to the Closing, Settlement, or Escrow as it is known in some localities. For simplicity, in our discussions here we will refer to the process when it all comes together and you finally sell your house as Closing. An understanding of the elements of and players in the closing, as well as a concise preparation for it, will eliminate many nervous hours as the day approaches.

What is involved?

It is the proverbial "signing on the dotted line:" the process of which will take the title to the house out of your name and put it into someone else's--your buyers. The keys to the house leave your hands for the last time and are delivered to the buyers. The weeks and months of anticipation are all settled in a very short amount of time at the closing.

Closing procedures will vary from locality to locality. In some areas, the buyers and sellers (as well as their Real Estate Agents) will all attend the closing. In other areas, only the buyers will be present. The closing will take place at the office of an Attorney, a Title Company, or an Escrow Company (again, there is some variance here based on your local laws and tradition). In general, though, the closing will be attended by all of the buyers involved and their Real Estate Agent, as well as the Closing Agent.

As a seller, you will in all probability have an attorney who will represent you, either physically at the closing or through a review of all the documents relating to the sale. At the very least, your attorney will prepare the deed and coordinate all paperwork with the buyer's attorney or closing agent.

What forms are involved?

Although there may be additional documents involved, the primary items which are dealt with at the Closing are:

The Settlement Statement--Page 1 and Page 2
The Contract
The Loan Papers (for the buyers)
Title Insurance (for the buyers)
Homeowners Insurance (for the buyers)
The Title or Deed
The Down Payment and Closing Costs (of the buyers)
Payoffs of any existing mortgages
Funds available to the sellers upon recording of new deed

How to minimize closing problems

From the time that the contract is ratified by all parties and you have secured an attorney, it is a good idea to keep in regular contact with your attorney--right up to the day of closing. Make it a point to contact the attorney's office on a regular basis to monitor progress toward closing. In this way, you can often avoid problems that seem to often arise on closing day or shortly before.

Planning for your Move

Whether you have moved once or a dozen times, it never seems to get any easier. The culmination of all the emotion associated with selling a home is another huge emotional challenge: Moving! Here are some hints that we hope you will find helpful as you prepare for moving day.

With the potential rewards that can be gained--saving $4000 or more (minus your expenses) by not having to pay a Brokerage commission, many people wonder why less than 10% of home sellers undertake the task of selling their houses on their own. Possibly it has something to do with expertise. Many home owners who consider a self sale of their house back off when they see the level of knowledge and commitment that is needed to do an effective job. If you decide, however, that self selling is the best option for you, you will find the vast majority of the information on this Web Site to be of value. Most of what you will find here will be geared to either doing the job yourself or monitoring the job that your Agent is doing. The most successful home sellers are those who take an active role in the process, whether it is as a sale by owner or a sale by an Agent. If you feel that the best route is to sell your home yourself, then having as much information at hand is crucial. You will find many helpful hints on this web site.

Advantages Of Selling A House On Your Own

There is no Brokerage Fee (commission) to be paid. You receive all of the proceeds (less marketing costs). This is, of course, the biggest benefit of selling your own house.

You are in total control of the transaction.

If mistakes are made, they are your own. There is no one else to make mistakes "for" you. All the liabilites will fall on you.

If your equity is low, you may be able to sell your house without having to write a check.

You will have to be always available at the home for showings, answering inquiries, etc.

Disadvantages Of Selling A House On Your Own

You must rely on your own instincts.

All marketing and advertising costs are your own, which can be an expensive proposition.

Unless you pay to have your listing included, you will not have access to the MLS--the Multiple Listing Service. You must hunt for buyers one at a time. Most homes are sold from a connection in some form with the MLS.

Without all the tools in hand, you may underprice or overprice the house. For information on getting price comparisons for your neighborhood, visit our site to receive a free home value report. . Knowing how much your home can be worth is one of the first steps in beginning to market the property. Click here for more information

If you are not skilled in negotiation, you may leave money on the table.

All of the paperwork, legal forms, etc. are your responsibility and must be handled by you. Ignorance of what is required by your state is no excuse in keeping matters legal.

If you want to give maximum benefit to your efforts, your free time will be somewhat or severely limited.

Many buyers believe that if you are selling on your own and not paying a commission, it is they (the buyers) who should get the saving--not you.

As you approach negotiations, you must sever emotional ties with your house or you will place yourself at a disadvantage.

You must become knowledgeable of legal and financial issues to be most effective.

JUST THE FACTS: Of the owners that attempt to sell thier home themsleves, less than 16% will actually sell by owner with half of those involving a Realtor bringing the buyer.

Hints on Selling Your House on Your Own
	Don't scrimp on your house preparation. Remember, you will be in competition with house listed by Agents who will coach their sellers on all aspects of preparing their homes. Consider hiring some to help you "stage your home".
	Be aware of all legal requirements for disclosures in your area. Not disclosing necessary information or not using the correct form could leave you open to legal action from a buyer.
	Become an expert in advertising and marketing. Make your house stand out!
	Familiarize yourself with offers and contracts now--don't wait until you have one in your hand.
	Get maximum exposure. by purchasing space for your listing on a FSBO service. They offer services if you want to sell your home on your own. Packages available range from a comprehensive marketing plan up to a complete deluxe package that will market your property until it is sold and keep your home on the MLS and Realtor.com for 6 months.
	Be aware of equal housing laws. Not only is discrimination stupid (you limit your potential market), it's illegal!
	If selling your house on your own appears to be your best option, our checklist will be of great value to you. If you feel that using an Agent may be the way to go, please contact us.
	Is selling quickly the most important goal? You may want to consider sources such as those that advertise they will buy houses. Be aware you will only receive a portion of your homes value using this method.

What makes one house go on the market, have a number of showings in the first week and have a contract in place shortly thereafter, while an apparently similar house sits on the market for months? Of course, luck may have a little to do with it, but there is a good chance that the quick selling house (and its owner) was prepared to sell while the other house and owner were not. Although pricing is a very important factor (see the discussion on that topic) there are other issues that will have a great deal of effect on whether or not you have a quick sale.

All the decisions have been made. The house has been prepared like a model. Advertising and marketing has begun. The listing is in the MLS and the showings are in full swing. Now it is time for the reason that all the work has been done: an offer.

An offer in Real Estate is a bit different than it is in many businesses. If a buyer asks a shopkeeper "could I buy this for $10?" and the shopkeeper accepts the offer, the buyer can still change their mind and walk away. Not so when you are dealing in Real Estate. When a buyer makes an offer, it is in the form of a legal contract. If you, as the seller, accept the offer, the house is sold. If you counter-offer, negotiations may continue. It is important to understand that all of the offer and counter-offer activity that you will engage in is framed legally.

This is why it is so important that a seller never gets involved in oral offers and negotiation. If you have a house listed at $175,000 and the buyer asks "would you sell the house for $165,000?" almost any response you make--short of "put it in writing"--can cause problems. If you verbally accept the offer, not only does the buyer have no obligation to actually buy the house, many will say to themselves, "gee, that was easy....I wonder if $150,000 would work?" This is why an Agent will never deal in verbal offers. If you are selling on your own, it is very good advice!

1) If you intend to accept an offer (or make a counter-offer), do it as soon as possible. At any time prior to your acceptance or counter-offer, a buyer can withdraw their offer.
EXAMPLE: Seller Jones receives an offer from Buyer Brown. The acceptance date on the contract is the next day at 6:00 PM. Seller Jones knows that he is going to counter-offer at a price just a bit over Buyer Brown's offer. At noon the next day, Buyer Brown, in a cold sweat, withdraws the offer. Seller Jones is out of luck.

2) Any changes made on the contract require written approval of all parties for the contract to be enforcable. Even seemingly minor changes open the door for either the seller or buyer to change their mind.
EXAMPLE: Seller Smith receives an offer on his house. He accepts all of the conditions of the offer (selling price, financing agreements, etc.) except for one. He changes the occupancy date from July 31st at 12:00 noon to July 31st at 6:00 PM, wanting to give himself a bit more time for moving. If the buyers agree (in writing), there is no problem and the contract is valid. If the buyers change their mind about buying the house, however, the contract is not enforcable. There has been a change (the occupancy time) that has been approved by only one party to the contract.

No matter how well you have prepared your house and how certain you are that it is priced at fair market value, there is always the possibility of receiving a low offer. It could be simply a shot in the dark, or it could be due to a limit in the buyer's mortgage qualification ability. No matter what the case is, though, the most important thing to remember is do not take it personally. Many home negotiations, if they had just been allowed to run their course, very well may have come together acceptably for all concerned if the negotiations hadn't fallen into a "grudge match". Yes, it is your home, and yes, you have put a great deal of love and effort into it, but taking a low offer as a personal affront solves no purpose. Reject the offer or counter-offer it and move on.

If you do get a low offer, it is far more important to try to get as much information as you can relative to the offer. Why was it at the price that it was? What was the motivation of the offer? (Be aware, though, that if the offer has come from a Buyer's Agent, the information you receive will only be as much as the Buyer's Agent wants you to know. They owe their loyalty to the buyer and cannot disclose any information that may put their client at a disadvantage.) There still may be information that will be revealed to you, which will help you as you structure a counter-offer.

Becoming familiar with the components of a contract before you have one presented to you puts you in a better position when it comes time to negotiate one.

Although there will be some variance based on the location of your residence, most Real Estate contracts contain most or all of the following items: As these contracts are modified to meet the changing state laws, be sure you have the most recent forms avilable.

The Real Estate Sales Contract: What It Includes
	What: A legal description of the property as well as the street address.
	How much: The selling price and method/s of how it will be paid.
	Mortgage contingency: Subject to obtaining a mortgage (if applicable) and the specifics of the mortgage--amount, rate and term. Application to be made in X number of days.
	VA/FHA Loan Addendum: THe form usedto specify the details of this type of loan
	Deposit: How much money accompanies the contract and in who.s escrow account shall hold it.
	Time Limit of offer: When does the offer expire and then what happens?
	Survey and Flood Certification: What are they and are they needed?
	Special Stipulations: Any miscellaneous stipulations to the purchase.
	Binding Agreemnt Date: Date and Time the offer was accepted after all counter offers have been accepted by both parties. This makes the offer a contract.
	Closing: When and where and who will pay for what.
	Inclusions and exclusions: What is and is not included in the sale of the property. Comprehensive list of any and all non-real property.
	Contingencies: What is the potential sale contingent upon and how will the contingencies be removed.
	Home inspection: Contingency for and to be done in X number of days.
	Warranties: Any that are included with the house and description of the warranty.
	Home Warranties: Are they provded and if so by whom and what will they cover?
	Condominium: If the property is a condo, other provisions will apply.
	Well and Septic: If applicable, they must be tested (and pass). State laws now require you to prove your land is approved for your number of bedrooms if not on sewer.
	Termite and Pest inspection: Who will pay and if there is infestation or damage, who will repair to what limit. What time period must the inspection be done to be acceptable to the lender?
	Repairs and Replacement costs: What is covered, how it is accepted or declined by either party and what limits are negotiated on this potential expense.
	Possession Date: When the buyers take possession of the house--before, at or after closing.
	Acceptance: How long the sellers have to respond to the offer with either acceptance or a counter-offer.
	Arbitration: Any provisions for arbitration of disputes.
	Insurance: Whose insurance covers the property up until the closing date.
	Property Disclosures: Notices of any property disclosures concerning the house including builiding and land, Mold and Related Hazards, Lead based Paint, Septic and Residential Property Condition Disclosure.
	Compensation Agreement with the selling agent and thier Broker.
	Final Inspections: When shall they be perfromed and when.