Complete Guide to For Sale By Owner (FSBO)
The Decision To Sell Your Own Home
Selling your home yourself depends on your personal preferences and how much time and energy you're willing to invest in your home sale.
Industry experts advise against owners selling their own homes, citing that an experienced real estate sales professional can find the right buyer, the best price and often prevents costly and time-consuming problems that may arise during the transaction.
Many sellers choose to market their homes themselves and pay a flat fee to have a professional handle the paperwork. Some services will negotiate counteroffers, handle paperwork, contracts and the correspondence between appraisers, lenders and insurance providers. Some real estate offices provide marketing assistance, writing up ad copy and pricing your property.
Home sellers need to be prepared to do a lot of the work, like holding their own open house. You will need to be outgoing and comfortable answering endless questions about your property. You will need to accept that strangers are going to look in your closets, under your sink and cabinets, etc.
Patience can also be important when holding out for the best possible offer. A good eye and a willingness to spend time staging your home are helpful, too. You can hire staging consultants to give advice on how to make your home look its best. Sometimes an objective set of eyes can see "curb appeal" that you may be overlooked.
Helpful Hints for Selling Your Home
HINT #1 - When showing your property: You do not know the people viewing your home in most cases, so beware of shady characters. Make sure your valuables are safe, in a safety deposit box or another location completely.
HINT #2 - Make a professional listing flyer: You may want to include photos, depending upon the curb appeal of your home.
HINT #3 - Financing options flyer: This will give potential buyers an idea of what income will be required by the lender, what the mortgage payments will be, including the taxes and insurance, what loan programs are available and the current interest rates.
HINT #4 - Filling out documents: If you don't understand completely, do not sign! Get a professional. Some real estate professionals will do it for you for a flat fee or you may want to work with a real estate attorney. Don't forget, if you list with a real estate professional, this is no longer a concern.
HINT #5 - A guest registry: Have every potential buyer sign a guest registry. Keep it handy so you can re-contact them at a later date if any of the terms change.
Recipe for a Sale
There are 5 main ingredients that make up the sale of your home.
#1 LOCATION - We usually cannot move a home! To coin the favorite phrase of appraisers: "Location, location, location". The pricing of your property must reflect its location.
#2 CONDITION - The upkeep and presentation of your property is crucial to obtain the highest value for your home in any given market at any given time. The pricing of your property must reflect its condition.
#3 PRICE - Price is the number one factor in the sale of your home. A property is really only worth what one person is willing to pay another to gain ownership of it. Price must be direct relationship to the other four ingredients and it is the most important of all!
#4 TERMS - The more terms available on your property the more potential purchasers you reach. The pricing of your property must reflect the kinds of terms available to purchase it.
#5 THE MARKET - Interest rates, competition, and the economy all make up and influence the state of the market when you sell your home. The pricing of your property must reflect the current status of the market.
When all of the above ingredients are in agreement...then we have a sale! If just one of them is out of line, it will take a longer time to sell, and...the more ingredients there are out of line...the longer it will take before you can begin packing and moving to your new home.
Understanding the Escrow Process
Congratulations! You Found a Buyer and Signed Contract!
Now is time to open escrow. You need to provide the title and escrow company with a copy of the full signed purchase contract.
Please be aware that the escrow company cannot prepare or advise you on the contract or addenda. The escrow company also cannot negotiate any terms between buyer, seller or lender in the transaction.
An escrow is a process wherein the buyer and seller deposit written instructions, documents, and funds with a neutral third party until certain conditions are fulfilled. It enables the parties to the escrow to deal with each other without risk, provides an accounting of all the funds deposited in the escrow, and provides the buyer and the seller with a settlement statement. In a real estate transaction, the buyer does not pay the seller directly for the property. The buyer deposits the funds to an escrow holder. The escrow holder, acting as a neutral third party, verifies that a title insurance policy can be issued pursuant to the terms of the contract. Then, the escrow holder arranges for the documents transferring title to the property to the buyer to be recorded, for the issuance of the title policy, pays any liens and all costs associated with the sale that are chargeable to the buyer and the seller, and distributes the sales proceeds to the seller. If the buyer gets a new loan, then the lender's money is deposited into the escrow and the lender's security documents are recorded at the same time as the deed.
WHAT HAPPENS NEXT?
If the buyer is obtaining a new loan, the buyer's signed loan documents will be returned to the lender for the review. The escrow holder will ensure that all contract conditions have been met and will ask the lender to "fund the loan". If the buyer's loan documents are satisfactory, the lender will send the funds directly to the escrow holder. When the loan funds are received, the escrow holder will verify that all necessary funds are in. Escrow funds will be distributed to you and other appropriate payees. The sellers will then turn the keys over to the buyers.
Congratulations on your sale!
If any of the (abbreviated) steps or parts of process are not clear enough, I will be more than happy to answer any of your questions or concerns. So please feel free to call me any time. I look forward to seeing you soon.