Helpful Information for Sellers
Know how to write a binding contract
Bargain hunters avoid real estate people
Beware of the "contingency" offer
Contracts should be in writing
If selling "by owner" sounds complex
Have you made the decision to sell your home “by owner”? Other homeowners have made the same decision. In fact, about 5% of all homeowners in the US fell their homes each year without benefit of representation.
So, where do you begin? What steps will you take to attract the right buyer? Which marketing strategies will work best for you?
REALTORS know that home sales do not happen by accident. They understand the importance of having a marketing plan for each homeowner they represent. Because each home is unique, the plan they develop to attract buyers will be different for each home offered for sale.
There is no reason why you cannot develop your own marketing plan. Properly implemented, your plan can result in a sale, which meets your objectives. If you are not sure where to begin, the information contained in this brochure should help. Each step in the marketing process is identified and explained. By following the steps, you can get started immediately. Your buyer may be just a phone call away.
Before you begin promoting your home to prospects, set a price, which will attract them. It is not necessary to offer a bargain price the gain their attention. It is critical, however, that the home be priced no higher than “fair marker value”.
How can you be sure you are pricing your home at current market levels? Do your “homework”. The probable final sale price of your home will be t, or near, the prices currently being paid for other, similar homes. If you know what buyers are paying for homes like yours, you can set the price accurately.
The “asking” price of other homes currently for sale will not provide this information. You need the actual, final sale price of homes already sold. Unfortunately, sales prices are not readily available to the general public.
REALTORS, on the other hand, have access to historical records on the sale of almost all homes. With this data at their fingertips, they are able to help you arrive at “fair market value” quickly.
Ever hear the expression “You never get a second chance to make a great first impression”?
Before you show your home to the first prospect, be sure its condition is “fit for a king”.
For every dollar not spent on improving your home, buyers are likely to offer you two dollars less. If you put off necessary repairs, buyers are quite likely to make disappointing offers.
To attract the highest possible price offers, you mush “set the stage” for buyers. To do this, be sure to complete all major and minor repairs. Next, home organize and clean your home thoroughly. Get the next mildew off the shower walls, and the clutter out of the closets. Be certain the beds are made and the dishes are washed before each showing.
Finally, add special touches to your home to make buyers feel at home. Fresh flowers are great touch, or try setting your formal dining table for a king’s banquet, complete with candles and cloth napkins in their holders.
Just before a showing, heat cinnamon rolls in the over, or perk a fresh pot of coffee. The aroma is sure to trigger memories of special times gone by.
To get buyers truly excited about your home, show them you take great pride in its condition. They will sense you pride-of-ownership, and may well reward your with a full-price offer.
The first step in any marketing campaign is to identify groups of likely buyers. This is done by asking yourself the question, “which buyers are most likely to be attracted to my home?”
If you own a five bedroom, three bath home, it is likely to appeal to a large family, while a smaller, two-bedroom may be appealing to first-time buyers, or a career couple with no children. If the home is on the water, it may appeal to boat lovers.
Once you identify the group most likely to be interested, it is possible to “target” them with your advertising and promotional efforts. This is called the “rifle” approach to target marketing-zeroing in on a focused target group of buyers.
The alternative putting an ad in the paper and a sign in the yard, is sometimes referred to as “shotgun marketing”. Everyone is the target. This approach is likely to yield the wrong prospects, the lookers and bargain hunters of the real estate world.
To target the right buyers, REALTORS use a combination of print advertising and direct mail promotion. They also target other real estate agents.
Print advertising is written to appeal only to the needs of the target groups. It may appeal in the paper , yet is more likely to be placed strategically in other publications such as special interest magazines, tabloids, or home books.
Direct mail brochures and cards are sent to know prospects who have not yet purchased a home. Mailings may also be made to neighbors living on the same street, or to renters likely to make a move to home ownership.
Other agents are targets too. The objective is for them to show the home to their buyers thus improving the exposure of the home to buyers.
Be prepared to qualify buyers.
Prospects who approach a “by owner” are often trying to avoid paying full price. They may not be qualified for a mortgage loan either, so it is critical that you be able to determine their financial ability.
To get the financial information you will need means getting personal. You will need to ask prospects about their income, and their debts. Many will not give you that information, making it even more difficult for you to know if they can afford your home.
When you ask a prospect how much they earn, it is a personal question. When a REALTOR asks, it is simply business, and most serious buyers respond without hesitation. Either way, before entering into a contract with an unknown prospect, be certain they can complete the sale.
Know how to write a binding contract.
Once you locate a buyer “ready, willing and able” to buy your home, be sure you have a contract ready, and know how to fill in the blanks.
The purchase contract should include the purchase price, a legal description, complete details of financing, a closing date, and the date possession will be given. Details about the financing should include the interest rate, and discount points. Be sure to stipulate who will pay for closing cost too.
The closing date should allow time for mortgage processing, title opinions, an appraisal, and survey work. Possession is often given on the closing date, however it is a negotiable item.
If personal property is being included in the sale, i.e. a swing set, microwave, or draperies, it should be written into the purchase contract. The extra cost, if any, should be clearly stated to avoid misunderstanding at a later date.
If you plan to save the commission…
The reason often giving for selling “by owner” is to save the real estate brokerage fee. While that rationale seems logical at first glace, it is flawed.
Prospects who approach “by owners” also want to save the commission. They believe that since the seller is not represented by a real estate broker, they can buy the home at a discounted price.
Consider the prospects who approach “by owner’ vs. those who contact a REALTOR. The most serious, motivated buyers comparison shop. They look at a number of homes which match their needs. Rarely do buyers look at a single home and guy it, without first comparing it to other homes.
Informed buyers understand that, by contacting a single REALTOR, they can be shown a variety of suitable homes. They will save time too since appointments will be set only for homes in the desired area, at the requested price, and in good condition.
Before seeing any homes, they will spend time discussing their financial position and objectives with the REALTOR, who may even set up a pre-qualification interview with a mortgage lender.
Bargain hunters avoid real estate people.
Those who want to buy a low, low prices like to avoid being qualified by a Realtor. They know that if they can work directly with the property’s owner, they are more likely to gain a price concession.
No matter that the homeowner says the real estate fee has already been deducted. The bargain hunter will persist until the price is lowered substantial or… no sale will take lace. In other words, the seller and buyer cannot both save the same commission!
Beware of the “contingency” offer.
Some prospects may tell you they want your home, but have a house they must sell first. What does this mean to you, and what should you do next?
When buyers still own their existing home, they are not buyers, they are sellers- just like you. Few buyers can afford to own two homes at the same time. This means that they cannot complete the transaction on your home, until they complete the sale of their existing home.
The offer they make to purchase your home is said to be a “ contingency” offer, one made “contingent” upon the sale of another property. It’s really more upon the sale of another property. It is really more like an option to buy your home. They are not obligated to complete the sale until their house sells, but you are obligated to sell-on their timetable.
If a home has to sell in order for you to move- on, better that it be your home for sale (over with control). At the very least, ask lots of questions before accepting such you can exercise same control), rather than someone else’s )over which you have such an offer, and be sure you are satisfied with the answers.
Contracts should be in writing.
Serious buyers will sign written offers to purchase. They understand the value of written agreements, and will not hesitate to back up their written offer with a substantial earnest money deposit. Thos who are less motivated will hesitate to sign anything, and rarely offer more than $100 as a deposit.
You can insure a successful sale by insisting that all written offers be accompanied by a sizable deposit. It is your assurance to the buyers' sincerity and commitment to complete the sale .
If selling “by owner” sounds complex.
It is! Although about 5% of all homes are sold “by owner” , it is important to understand why the other 95% choose to be represented by real estate professional.
Homeowners sell once every five to ten years, while the dedicated professional is in the local real estate trenches seven days a week. It is difficult for an owner to compete with the tireless efforts of an entire community of active REALTORS.
Homeowners who choose to be represented by a REALTOR gain the loyalty and dedication, of an informed real estate specialist. The owner’s best interest are represented throughout the marketing process-right up to closing.
Before choosing to become a “by owner” take time to allow a REALTOR to explain the benefits of professional representation. Be informed!
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