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NOTE:
This article is posted in it's entirety to help educate
YOU. Thanks for visiting us! Jody Hudson.
Here is an example of one of our FSBO properties as
featured on our site. Cinderberry Estates,
Restricted and Exclusive Wooded lots in Georgetown,
Delaware 19947
Mistakes to Avoid When
Selling Your Own Home
By
PERRI
CAPELL
Wall Street Journal
Owners who've sold their homes without a real-estate
agent say it isn't difficult once you've mastered the
basics. You need to price it correctly, make sure enough
people know it's for sale, understand what paperwork is
required, and be able to negotiate with
potential buyers.
Yet many people start the process and give up. I
know, because I did. In 1999, while planning to move to
another state, I thought I could quickly sell my
three-bedroom townhouse near Princeton, N.J., and save
the 6% commission. I spread the word that my desirable
end unit was for sale and soon had an offer at my asking
price from a friend of a friend. He was a university
professor, so I assumed the deal was solid. But a few
weeks later, the professor didn't get the job he'd hoped
for and said he couldn't purchase my home.
With the move looming, I was under the gun to sell my
house. Since no documents had been signed, I returned
the professor's deposit. I then began passing out fliers
in my neighborhood advertising my home. Unknowingly, I
handed one to a real-estate agent. He told me he could
sell my home swiftly for thousands of dollars more than
I was asking. I hired him, and we raised the price of
the house. The day after my house went on the market, a
bidding war ensued, and I was offered even more than the
new higher price. Instead of accepting an offer
involving a bank mortgage, we chose one that would be
paid all in cash, and I was glad to pay my agent his
full commission.
It didn't work out for me, but hundreds of people
every year sell their homes in "For Sale By Owner"
(FSBO) transactions. In fact, between 1997 and 2001, 13%
to 18% of all U.S. home sales were FSBO (pronounced
fizbo) transactions, according to the latest data from
National Association of Realtors in Washington, D.C.
Steve Schleuning, a 50-year-old Overland Park,
Kansas, resident, has sold five homes this way since
early 2002. He fixes up "slightly distressed" properties
and resells them at a profit. He says if he paid
real-estate commissions - which average between 6% and 7
1/2 % -- the business wouldn't be worth the investment.
"All I have to do is look at the money I'm saving and
the money I'm making, and it's well worth the effort,"
says Mr. Schleuning. What do Mr. Schleuning and
other FSBO sellers know that those of us who use
real-estate agents don't?
FSBO Services
For starters, you don't have to go it completely
alone. A mini industry has sprung up to help
FSBO sellers with the details for fees that are
usually a fraction of a typical realtor's commission.
Among the services they may offer are:
advertising in magazines and on Web sites
real-estate lawyers' services
disclosure and contract forms and other sales
documents
yard signs
weatherproof information boxes and flyers
seminars
informational booklets and materials
These companies know what sellers are required to
disclose in their respective states. They sometimes help
owners price their homes correctly or ensure buyers are
financially qualified. Some are affiliated with title
and mortgage companies. Fees vary depending on the
package of services owners select. For listings of FSBO
services nationwide, visit
www.fsbonetwork.com or
www.homesbyowner.com.
Mr. Schleuning uses Pearson's For Sale By Owner
Services Inc., based in Overland Park, Kansas. It
charges $695 for a package that includes a three-hour
seminar, ads in its FSBO magazine and Web site, a
real-estate lawyer's services, necessary documents, yard
signs, and other aids.
Other owners simply hire a lawyer. Karen Jones, 43,
of Oak Brook, Ill., paid a real-estate attorney $500 to
handle the sale of her four-bedroom suburban Chicago
home two years ago. However, she cautions sellers to be
sure to use a real-estate lawyer. This way, they will be
sure to comply with the disclosure and other
requirements in their states.
Of course, you also can purchase necessary forms
(note from Jody: If you purchase generic forms they will
not likely work to protect you in Delaware) and do the
documentation yourself. Ms. Jones' mother, Martha, sold
four homes herself over a 30-year period and is readying
a fifth for a FSBO sale. She did all the paperwork on
the first three transactions, but now hires an attorney
because real-estate laws have become more complicated,
says Ms. Jones.
Tips for Selling Swiftly
So does the prospect of keeping the 6% to 7% realtor
commission in your own pocket appeal to you? FSBO
sellers say if you decide to sell your home on your own,
knowing the following sales tactics will increase the
likelihood that it will sell easily and swiftly at the
price you want.
1. Your home must be priced correctly. You can't
just pull a price out of thin air, as I did initially
for my townhouse. It may be either too high or too low.
Consider paying for an independent real-estate appraisal
or do a survey of the actual prices comparable homes
("comps," in realtor lingo) in your area have sold for
recently. This information is public and available in
county courthouses. It's also published on Web sites
and in local newspapers
or the newspapers' Web sites, although these don't offer
square-footage information and other details. You can
have this information ready to show buyers who question
your asking price.
Ms. Jones reviewed such "comps" when pricing and
selling her home. Within two months, Ms. Jones' house
went for her asking price -- $282,000.
Mr. Schleuning also uses comps to determine the price
of his homes. For him, it's important to price his homes
correctly so he doesn't have to hold them long and keep
paying carrying costs. "Don't be greedy," he says. "I
never assume that my home is worth more than the top
price of a similar house in the neighborhood just
because it's fixed up."
Boise, Idaho, real-estate attorney Barry Peters
recalls an owner who bought a Boise home for $28,000
years ago and decided to sell it herself in 1998. She
decided on her own to price it at $110,000, and thought
she had gouged a buyer, who agreed to pay it, says Mr.
Peters. But an appraiser hired after the deal went
through valued the home for $20,000 more than the
purchase price. The original owner wanted to cancel the
deal and ask for more but couldn't because she had
signed a contract, Mr. Peters says. "This was a tragic
situation," he says. To avoid it, "you need to get your
home appraised if you have owned it for more than two
years," he says.
2. You can get the price you want. Some buyers
assume that owners selling homes themselves should
deduct the amount of an agent's commission from their
asking price. FSBO experts disagree. They say that homes
sold by real-estate agents have prices that are marked
up to cover their commissions.
"Whether you sell it or an agent sells it, a property
is worth what it's worth," says Dale Pearson, publisher
of Pearson's For Sale By Owner Services. "You make money
by not paying the commission, not by discounting the
property."
Some FSBO sellers think they need to start with a
high price and then lower it during negotiations, says
Mr. Pearson. But their initial price is too high or
isn't based on the home's actual worth, and they
typically don't get it or can't sell their homes, he
says. He tells owners they should ask for a little more
than what they want. For instance, if your home is
appraised for $400,000, and you'd like to sell it for
that amount, start by asking $410,000. Then, during
negotiations, if a buyer makes a $390,000 counteroffer,
"you bring them back up to the price you want," he says.
3. Enough people must know your home is on the
market. You can't plunk a "For Sale By Owner" sign
in your yard and expect buyers to show up if your house
is located off the beaten track. Have a plan for
marketing your home to a wide audience.
FSBO services publish monthly magazines distributed
free with all the homes they're helping owners to sell
in the area. A Boise FSBO service, Property By Owner,
distributes 29,000 copies of its magazine advertising
about 250 to 350 homes monthly, says publisher Rudy
Weisshaupt. Pearson's contains about 400 to 500
advertised homes and about 30,000 copies are distributed
each month in the Kansas City area.
Another option is to advertise in local newspapers or
on a Web site listing homes for sale in your area. Ms.
Jones did both, but says that no one responded to the
Web-site listing and only a few people called after
reading the newspaper ad. Her yard sign was her best
marketing device, she says.
"The main thing that helped us sell our house so
quickly was that there were several houses in the
neighborhood for sale through realtors," she says.
"People would drive through and then give us a call."
4. You must be aggressive about weeding out
unqualified buyers. If you accept an offer from an
unqualified buyer, you'll delay the sale of your home
and need to start the sale process over again. But you
can prevent this by asking potential buyers to contact a
lender and become prequalified before accepting their
offer and taking your home off the market. If a
potential buyer claims to be prequalified already,
contact the lender and verify the terms of the approval.
When buyers already have letters of approval from
lenders, determine if they're preapproved -- meaning a
lender has examined their finances and believes they can
secure a loan -- or prequalified, which means the lender
has agreed to finance a certain amount, says Ms. Jones.
Mr. Schleuning says he had a sale fall through
because a buyer wasn't prequalified. Other buyers have
so many conditions attached to their loan approvals that
they can't get financing for certain homes, he says. For
instance, one buyer had been preapproved for a mortgage,
but not if the home was an A-frame, which Mr. Schleuning
was selling. In others cases, buyers have been required
to make down payments they couldn't afford.
"I had some deals falter because I took [buyers] at
their word" about their preapprovals, he says. "You need
to really get involved with the sale and call the lender
and find out what they're qualified for."
Mr. Schleuning also cautions owners to find out if
lenders are legitimate. "With the low rates, a lot of
fly-by-night lenders are out there," he says.
5. You can show your home at your convenience. To
avoid the headache of having to straighten up your house
and show it at a moment's notice, FSBO experts advise
deciding which days and times of the week you want
buyers to view your home and take appointments for only
those times. "We say you can sell your home in two hours
and people say, 'What do you mean?' " says Mr. Pearson.
"It means telling buyers you're showing the home on
Saturday between 1 p.m. and 3 p.m. and asking, 'What
time would you like to come?' "
Ms. Jones also showed her home by appointment only.
Putting this condition on your "For Sale By Owner" sign
is important, she says, "or you could have people
ringing your doorbell at 10 p.m. wanting to see your
house." If you're leery of having strangers in your
home, you can increase your security by arranging to
have another person in your house with you during
appointments, adds Ms. Jones. She says she learned a lot
about the process from "How to Sell Your Home Without a
Broker" by Bill Carey (John Wiley & Sons, 2000), which
includes tips for first-time FSBO sellers.
6. You can't be in a hurry. It takes time to sell
a home yourself, but be patient, both Ms. Jones and Mr.
Schleuning say. Otherwise you may not get the price you
want or you'll be tempted to give up.
Ms. Jones says real-estate agents who saw her "For
Sale By Owner" sign dropped by her house and asked if
she'd be willing to work with them. "I said I'd consider
it, but I wouldn't pay a commission, which settled the
matter," she says. "If my house had been on the market a
long time, I might have considered it, but we were in no
hurry."
-- Ms. Capell
is a senior correspondent for RealEstateJournal.com. She
can be reached at
frances.capell@dowjones.com
NOTE: Kate and
Jody will help you with your FSBO project. You can
be placed on our web site and in the MLS for a small
fee. We have, by far, the highest traffic web site
in the region and we'll even help you to get good
pictures and make them suitable for the web (make them
come up fast). You can also hire us as sales and
marketing consultants to help you with pricing, ad
writing and getting your home ready for the market!
We'll help YOU do the work we would ordinarily do for
you and you save money.
Click here for
more FSBO info:
FSBO; F.S.B.O., FOR
SALE BY OWNER
FOR
SALE BY OWNER: THE F.S.B.O. SITE.
(FSBO = FISBO means a property that is For Sale By
Owner)
YOU may have your
property listed on our site on the Sussex County
Multiple Listing Service, on the RealMLS (like the
properties on the left of this page). If you have your
home or other property for sale and don't want to use a
Realtor, Kate and Jody will still help! They will do
only what you want them to do, for YOU.
For Sale By Owner:
Marketing Fee Schedule!
FSBO article
Lots of free advice
Prepare YOUR FSBO home for sale!
More Free advice
Buyers want to buy a FSBO
Some important data
For those who want Kate
and Jody to help them, who wish to take advantage of
their years experience, thousands of hours of Internet
work hundreds of thousands of people who visit this web
site, and want to get a property listed on the Sussex
County MLS... see below.
For Sale By Owner:
Marketing Fee Schedule!
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