For Sale by Owner thoughts..

[Bird]

i used a real estate agent twice: what a joke..i will never do it again.
Staples has most of the paperwork needed..offer and acceptance forms etc: have some offer and acceptance forms ready: when someone says, "well, would you take ????" hand them a form and say, put all offers in writting with earnest money.
heehaw

You know there are still people who just have more trust in a realtor. When we sold our house in '89, we had a buyer (the woman worked for the same company as my wife) and agreed on a price. Then they asked if we'd be willing to deal with a realtor. Seems they had bought a house in the past from a realtor they liked. I said, "Sure, but we'd have to increase the price 10%." And they agreed. The realtor showed up in his new Cadillac and wearing enough gold jewelry to sink a small boat. I asked him if he wasn't ashamed to collect a 6% commission, but he wasn't.

 

[stumpfield]

You can try FSBO if you have the time and not in a hurry to sell and don't really care if it sells or not. But if you want to sell your house quickly at the highest price possible, I recommend using real estate agents to *sell* your house. I meant *selling* not listing. I have done this in the past and it worked quite well. Put your home up FSBO and note in big letters that you will cooperative with any real estate agent (another word, offer selling agent's commission usaully 1/2 of the typical commission). You will get a lots of real estate agent trying the house for you. Some even advertise it at their own expenses. Local agents usually have a list of qualified buyers and know what they are looking for. In most cases, you can sell at a better price which covers the commision paid to the selling agent. Once the deal is made, the escrow company handles most of the work anyway.
Keep in mind that most home buyers shopping for FSBO properties usually are bargain hunters and always looking for a good deal. Many times, they are not willing to paid a full market price. The mentality of buying from FSBO already factor into the owner saving big on the commision therefore, they expect price to be a little lower.
Just my two cents....

 

[Hakim]

We successfully sold our nice log home on six acres in Upstate, NY, in early 2002. It was probably the WORST time to sell a house in NY because of recent events of 9/11. We had a broker list it the whole year before, and MANY people came (maybe 50-80), but no buyers.

So, I did it myself (typical TBN trait ).

Points:

1) Once a contract is offered, the lawyers (yours and theirs) are going to do ALL the work. Believe me, the agent does nothing but wait for the lawyers to finish up (and liaison with the mortgage company if any) then show up to collect their cut.

2) We created a web site specifically to sell the house. We titled it "Almost Paradise" and we had every detail of the house, plus about 30 photos (see attached document; the links no longer work, but you’ll get the idea). This is much better than a "listing" in MLS with a broker. We gave exact dimensions of all the rooms, acreage, and any questions that a buyer might want to know.

The web site reduced to -zero- the people who might otherwise just drop by with a broker. We got a FSBO sign in our front yard and had the web site on it in large letters.

3) We took out a full page ad in the local FSBO magazine --- it cost about $100, but ran until we sold the property. Good deal, IMO.

4) We screened anyone who called, and told them to go to the web site and look first. We also told them in unambiguous language, that we would not offer any owner financing; that we would not wait for them to sell their house; that we did not want a lease-purchase; that we did not want to list with any broker; that they must be pre-qualified to buy a house in the price range; etc.

5) On the web site, we also had a sheet of FAQs for prospective buyers, with answers to things like, "Is it legal to buy without a broker" etc. Yes, people are totally brainwashed about RE brokers.

6) If you need to get a true estimate of the value of your home, use http://www.domania.com. It is free and has actual prices paid on your exact street, or by neighborhood.

We also had a sheet for prospective "buyers agents". This simply said that we would not "list" with a broker, but that if they brought a buyer who purchased the house, we would pay a total of 3%. See attached document.

7) Yes, you will need various boilerplate forms and disclosures. Ask your lawyer for them for your state. They are available for free.

8) I made a spreadsheet with all of the various improvements we had made to the property. Spend some time on this, because it will be a good tool to show the prospective buyer the "value" of your house. Especially is you did work yourself (like install a septic, or a fence around a pool) it can have a true value of thousands of dollars, even though you did not lay out that much cash.

6) Have a professional "home inspection" done BEFORE you list your house. Most buyers demand this anyway. It is best to know ahead of time what issues may be there, and to correct or deal with them before the buyer inspector shows up. You do not want to be negotiating over inspection problems while in closing.

7) Insist that all house showings occur on Sunday only (or whatever day is convenient to you). It is GOOD if you stack 4, 5 or more appointments on the showing day, because the prospects will see a lot of interest in your house. When two people are in their cars in your driveway waiting for the current looker to finish up, they will get serious fast.

8) DO NOT accept contracts on contingencies like selling their house first. Could take a long time, and no reason to do so. If you want to do something like that, get your lawyer to draw up an "option" contract. I still wouldn’t advise it, if your intent is to sell.

I have attached a document with most of the text & pictures we used to sell our own. It saved us about $10,000 in commissions, so it was worth it. Took about a month to get a buyer, and another month to close. This was in about the worst real estate market in the US at the time.

I am not a lawyer and nothing herein or the attached documents is legal advice. Consult your own experts and professionals with any questions.

Good selling!

 

[dmccarty]

You are getting good advice. If you are in an area that is turning over the house quick AND you know what your house is worth the try FSBO. We sold our house ourselves. The person buying had an agent though. And my wife was getting her brokers license. We also had sold/bought property before so we knew the ropes.

To get the value of your house you can have an appraisal done or do what we did. Look up which houses have sold in your 'hood at the county. In our case it was even easier since our house was one of a 3-4 model built so we could easily see the value. Course we had to walk by and see what kind of shape the house was in but it was pretty easy for us. Worse case get an appraisal done.

If its raw land or a house in the country it gets more problematic I think to sell. Talking to people at work I'm always surprised at what they DONT know about buying/selling houses in cities. Getting in the country is a new ball game with septic, wells, etc.

I'll have to defend brokers since my wife is one. Are there bad broker/agents? Yes there are but there are honest ones as well. In NC if you hire a broker they are legally obligated to work in your best interest. My wife just spent three long days with a couple. She did not get home until after 8:00 each night. What did she get nothing. Zip. NADA. Zero. Maybe the will come back. Maybe they won't. So what did she get for days worth of work? Nothing. She put out a lot of time and expense. But that is the way it works in any business you own. Sometimes you get a contract sometimes you dont. There is a LOT of work that goes on between agents/brokers that the client does not see. And that is what you pay the agent to do.

Later,
Dan

 

[Bird]

Yep, you're right, Dan. There are good and bad realtors, just as in any other business. Finding the right one is sometimes the problem. We listed our place in the country with a Century 21 realtor; bad mistake! Since Century 21 places are independently owned and operated, there are a lot of good ones, but we got a guy who did absolutely nothing but put a sign in the front yard (on a road with no traffic), then went to Europe on an extended vacation. If WE had sold it, he'd have gotten his commission.

When his contract expired, we got a good realtor. He not only put a sign in the yard, but also at two corners where people would have to turn to get to our place (3/4 mile and 2 miles down the roads), he advertised it in the Dallas newspaper, put it on the multiple listing, made appointments to bring potential buyers (lookers), and said he'd pay for ads anywhere else I thought might help. I suggested the Thrifty Nickel, he placed an ad there, and that's actually the ad that got our buyer. The buyer wanted a professional appraisal and survey and needed some financing. Financing can be a problem with a mobile home in the country. The realtor promptly arranged all that without us doing anything other than signing paperwork. So, yes, he made a nice 6% commission, minus his expenses, but he did put some time and effort into it and got it done.

 

[bbse]

All of this is good advice. I am a real estate agent in middle TN. You guys are hurting my feelings . I do my best with listings. Most of it is location and market. There are some properties I have had listed you could not give away. There are others I had contracts on in 3 days. If you are in a hot area try to sell it yourself. If you want some help use forsalebyowner.com or yourigloo.com. etc. One other thing you could look into is a thing mortgage brokers are doing called Yellow Sign. They will help you market your house so they can try to get the loan from the buyer. Nowadays it is a lot easier with the net and I will put one one for a small fee. But there is a reason 90% of FSBO's get listed. Most people do not know how to get exposure or how to market there property. Most of you old tractor salts are the self reliant, independent, do-it-yourselfers so you could and that is great. I agree with the guy who pointed out how realtors get knocked around. I have drove people all over creation, burned tons of gas, and got squat. Some even bought behind my back . That is why I prefer investment real estate. It much more matter of fact and stays on a business level. No emotions. Keeps my blood pressure down.. I still do residential but only when I have to.

 

[heehaw]

if someone has property for sale at a good price in this area, and they go to a real estate agent: the real estate agent buys it, and then re-sells: instead of telling them they are asking to little for the property, and helping the people like i think should be done: then when they show you a house, afterward, they tell you, they are building a subdivision, and will build you a new house, exactly like the one you just looked at, for less...been there, had it happen..so i stay way way clear from now on.
heehaw

 

[bbse]

if someone has property for sale at a good price in this area, and they go to a real estate agent: the real estate agent buys it, and then re-sells: instead of telling them they are asking to little for the property, and helping the people like i think should be done: then when they show you a house, afterward, they tell you, they are building a subdivision, and will build you a new house, exactly like the one you just looked at, for less...been there, had it happen..so i stay way way clear from now on.
heehaw

If I had that kind of experience with an agent I would not use one either. Let me say that if an agent buys your property under market with the intention of reselling it without disclosing that as his intentions, you probably have a good law suit on your hands. I am not a real estate attorney, so at this point I have to through in a disclaimer that I said probaly and that my advice is to seek legal counsel. I know in TN, if I did that I would be in trouble. As to shifting clients to property I am also selling, that is just a sleezy tactic to try and double dip (get both sides of the commission). Again I say, fire him and find a real agent. Do not get so-and-so's brother-in-law. Ask around and get someone who is professional and behaves that way. They are out there. I will (and have) give up part or all of my commisions to make sure my customers are treated fairly and to make sure the deal goes down like I promised and contracted with them. My future reputation means more to me in the long run than a few quick bucks now.

 

[Doc_Bob]

So, I did it myself (typical TBN trait ).


I have attached a document with most of the text & pictures we used to sell our own.
Good selling!

Wow, very impressive post and great advice.
Bob

 

[Bird]

Wow, very impressive post and great advice.
Bob

Yep, and like Yogi, Hakim's smarter than the average bear.