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"We had an enormous response to our advertised home. The results were outstanding! Not only did our house sell, but with 2 offers!" Walter and Lisa
Buying in London?
SELLING YOUR HOME BY YOURSELF
If you ask anyone who has tried to sell a home by themselves, they will tell you that from the moment the “For Sale By Owner “ sign goes up, the phone will start to ring off the hook. Unfortunately, most calls aren't from prospective buyers but rather from Real Estate Sales Representatives wanting to obtain your listing. Obviously the idea of not having to pay a fee to get the house sold is attractive to any home seller just as it those who want to fix their cars by themselves. The reality is, however, with all the issues involved selling a home is a big job, and like changing your car’s transmission on your own, it can be challenging as many home sellers will attest.
The key is to be properly prepared. If you are not, your home could remain on the market longer than you expect because you are not attracting and getting offers from qualified buyers. This can be the point where many homeowners become frustrated and consider giving up their dream of selling their home privately. However, there are sellers who successfully accomplish selling their own homes. You can be one of them.
This industry report has been especially prepared to assist home sellers, such as yourself, understand the elements involved so you, on your own, can sell your home quickly and for the most amount of profit. To help you prepare, here are 10 inside tips that you should be aware of before you make the decision as to whether or not this is the right approach for you.
1. Price Right
Correctly setting your asking price is critical. Setting your price too high can be more costly than setting it too low. A low price is likely to attract buyers and with a bit of control you may be able to build the interest into an auction-like situation but a too high a price will turn away buyers before you ever have a chance to meet them. House prices are determined by fluctuations in the real estate market – supply and demand – that you cannot control. It doesn’t matter how important the house is to you on a personal or emotional level, how much money you spent on it or who much money you need in order to take the next step in your life because the market works on the rule of substitution –what else can I get at a lower price that will meet my important needs? Think about canned soup, do you really need the Brand Label or will the No Name work as well?
In order to establish a realistic price for your home, objectively compare the price, features and condition of all similar homes that have sold in recent months in both your neighbourhood and other similar ones. It is also important for you to be familiar with the terms of each potential sale because, for some sellers, the terms (closing date for example) are as important as the price.
Carefully budget your selling costs and prepare net proceeds sheet to calculate your best estimate of what you will take away fro hour home sale. Prospective buyers may also request this kind of analysis of buying costs. Prepare a detail summary of your operating costs; electrical, gas, water, taxes, maintenance as a buyer is quite likely to ask for this information.
2. Prepare your home for sale
It’s a cliché, but you can only make a first impression once. Make sure your home will make a positive statement by carefully inspecting all details and by viewing it through the eyes of a prospective buyer. Don’t gloss over needed repairs, replacements and fix-ups, as your prospective buyers won’t. Your job is to ensure that our home stands out favorably form the completion.
3. Prepare Yourself with all Necessary Legal Documentation
The sale of land must be done with a written contract and it is the terms and conditions of this contract that define the sale; verbal representations and promises don’t count. Not surprisingly, there are many important legal contracts and documents which you must assemble, complete and understand. A partial checklist of forms that you will require for prospective buyers and for legal documentation is as follows:
Seller Disclosure Purchase Contract
Mortgage Payoff Loan Application
Deposit Receipt Property Profile Fact Sheet
Buyer’s Cost Sheet Personal Property
Exclusion List Land Survey
Buyer Identification Form Open House Guest List
4. Market Your Home Effectively
The Internet allows anyone with a connection to shop the world so a seller who is entering an international market and bidding for buyers from around the world, you need to find effective ways to spread the word about your home. Local buyers can be reached through the newspaper but more and more, buyers are turning away from print media because much of it is too slow to deliver the “latest” news and not everyone receives the media. Studies show that more than 85% of buyers begin their search for a home on the Internet so that’s where you home needs to be. Buyers can hire a Realtor at no cost to obtain access to the vast majority of homes that are for sale and receive expert support through the buying process so as a seller, you need to tap into this market so don’t exclude “ready-to-buy” buyers who are working with a Realtor. You need to target as many top-producing Realtors as you can and be willing to pay a selling fee if one of them is able to bring you an acceptable offer. Out of town buyers are also an important target, you need to create a strategy to reach these people as well. Above all, you should be service minded and make it easy for buyers to view your home. Ensure that there is always someone available to answer the phone, pick up messages promptly and be ready to give qualified prospects a tour of your home as soon as possible.
5. Remain Objective During the Showing of Your Home
As a society Canadians are not negotiators, we tend to accept the price asked or quietly move on until we find the item on sale or a lower priced substitute that meets our needs. This makes it difficult to ask questions about the “product” or negotiate when dealing “face to face’ with the other party. As the seller, you need to “step away” from your home and when showing it to a prospective buyer, remain in the background. If a buyer makes a negative comment, it’s better to counter with a positive feature to illustrate the features of the home rather than becoming defensive.
6. Pre-Qualify Your Prospects
This is a hard thing to do because money is a very private issue and so too are the reasons why a buyer wants to see your home. You, of course, want everyone to see you home because, potentially, each is the buyer you seek but the reality is not every “interested” person is a qualified buyer. You don’t want to waste your time showing your home to nosy neighbours or those who want to see “how the other half live” so be prepared to ask some tough questions. Ask about why they want to see your house, research their financial steadiness with respect to job security, salary, debts, liabilities and credit standing. You don’t want to go through the buying process only to have it fall apart because the buyer never could afford it or had the ability to buy it.
7. Negotiate Effectively and Knowledgeably
There will be many details to resolve before a sale can be considered final: price, terms, inspections, possession date, and buyer concerns and objections. Make sure you fully understand the contract you have drawn up so you can in turn explain details and ramifications to the buyer and make any amendments to the sale that are necessary. The contract you use should be thoroughly examined by your real estate lawyer. Some real estate brokers may be willing to help you do this. While this is going on, manage the buyer's interest in your home so that it doesn’t wane during negotiations.
8. Know your Buyer
Your objectives during negotiations are to control the pace and set the duration. Try to determine what your buyer’s motivation is. Does he or she need to move quickly? Does he or she have the money to pay your asking price? Knowing this information will give you the advantage in the negotiations because you will know up front what you will need to do in order to get what you want.
9. Don’t Move out before You Sell.
Studies have shown hat it is more difficult to sell a home that is vacant. It looks forlorn, forgotten, simply not appealing. It could even cost you money. If you move, you’re also telling buyers that you have a new home and are motivated to sell fast which can, of course, give them an advantage at the negotiation table.
10. Know why you are selling and keep it to yourself.
The flip side of “understanding your buyer” is to understand yourself”. Your reasons for selling will affect everything from your asking price to how much time and money you will invest in getting your home ready for sale. Your motivation will help you determine what is more important; the money you walk away with, the length of time your property is on the market, or both. Different goals will dictate different strategies. As someone who wants to sell without a real estate agent in an effort to save the commission, it’s likely that money is one of your primary considerations. Whatever your reasons, however, it is very important to keep them to yourself so as not to place yourself at a disadvantage at the negotiation table. When asked, simply state your housing need have changed.
How To Assess Your Net Gain
To analyze whether or not you choose to sell on your own, consider the fact that most buyers, including those coming from other communities and don’t have local knowledge, use a real estate sales person because it does not cost them anything (the sales person is paid from the proceeds of the sale) to have access to recent market statistics and information about the houses around yours that recently sold or are for sale. They also get all the support they need from their representative who is working for them.
Be cautious as buyers, investors and speculators who seek out For Sale By Owners are typically those in search of a bargain. Low-ball offers from these buyers may net you much lower over the long run. What you will have to judge for yourself is the following:
1. Can you be as prepared with your marketing, negotiations, evaluations, showings and legalities as other sellers who are using a sales representative?
2. Consider what it will cost you to effectively market your home and assemble all the materials you will need. In some ways, it’s like fixing your car, while you can do it, is it worth the money and time you spend assembling all the “one use” tools you need to do the job?
3. What price will a buyer offer you as a “For Sale By Owner minus the costs indentified in point 2 above. Remember, if the buyer is working on his/her own, the h/she is also looking for a savings otherwise why not have the benefits of using a sales person? Is the net price higher that the price an experienced sales person could net for you minus the commission?
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