Advice for sale by the owner

Provide the buyer with a list of closing costs.

You’d be surprised how many deals fail because buyers don’t take liquidation costs into account. Many times the buyer simply does not have enough cash to close, even though he wants the house very much. A good mortgage broker will be happy to provide you with an estimated list of settlement costs that he can show prospective buyers.

Do not forget about repairs that arise after the inspection.

Take into account the cost of any repairs that may be necessary after inspections. The kitchen sink or garage door opener may fail the inspection, for example. The seller must make these repairs prior to closing.

Consider paying the buyer’s closing costs.

Instead of accepting an offer that is less than your asking price, consider offering to pay some of the buyer’s closing costs. If the buyer is low on cash, paying some of the buyer’s closing costs could get the deal done.

Consider paying “points” for the buyer.

Instead of negotiating the asking price, consider paying “points” for the buyer. A “point” is one percent of the loan paid to reduce the borrower’s interest rate. Points paid by the seller are tax deductible for the buyer, so the buyer gets double getting a lower interest rate and getting a tax deduction. Lowering the buyer’s interest rate can be more beneficial than simply paying the buyer’s closing costs. If you pay $5,500 for the buyer’s closing costs, the buyer benefits exactly $5,500. But if you take that same $5,500 and lower the buyer’s interest rate (from 6% to 5.375%, for example), let’s calculate how much the borrower would benefit. Assuming the borrower held the loan for 7 years, the benefit from savings on a $250,000 loan with a 30-year term would be about $11,000. And that doesn’t include the fact that the points are tax deductible for the buyer.

Every dollar counts.

You wouldn’t believe it, but sometimes hundreds of dollars can make or break a deal. There are many sellers who have walked away from negotiations when they were very close to reaching an agreement. Listen carefully and ask lots of questions to find out what the buyer really needs to make the deal work.

Consider getting a professional appraisal.

Any real estate agent will tell you that it’s better to price a home right the first time than lower the price later. A new home for sale attracts the attention of potential buyers, but those buyers will search and move on if the price is too high. Those potential buyers may not come back for a second look after you lower the price. Undervaluing a home (even a little) could cost tens of thousands of dollars. A $500,000 home priced 3% below market value adds up to $15,000! A professional appraisal will cost between $300 and $500, but it’s better to spend a few hundred dollars than leave tens of thousands on the table or lose a potential buyer and be forced to make extra mortgage payments. The best way to price a home to sell is to get a professional appraisal.

In addition to pricing your home and getting a good night’s sleep knowing you’re not leaving money on the table, getting a professional appraisal has another great benefit. Perhaps the biggest benefit of getting a professional appraisal is that you can show it to all potential buyers dusting your welcome mat. Any and all potential buyers will be able to review the actual appraised value arrived at by a professional appraiser. This will give the buyer the assurance that he is not paying too much for the house. Paying too much for a home is every buyer’s number one concern. A professional appraisal will also give your deal a better chance of closing. Many deals fall apart before closing due to “buyer’s remorse,” a condition that often stems from doubts about the purchase price.

Don’t forget about the seller’s closing costs.

There are costs involved in selling a property. Some of these costs include: fees associated with paying the seller’s mortgage and discharging liens on the property, transfer taxes, documentary stamps, title insurance, courier fee, buyer’s credit for unpaid property taxes, fees (if you choose to use an attorney), condo/coop moving fee, association transfer fees, reverse loans (you owe more than you will receive in proceeds at closing), document preparation, prepayment penalty mortgage, escrow fee, home warranty premium (if buyer insists on having one), and certificate of zoning compliance. If you had used a real estate agent, that agent would provide a breakdown of the seller’s settlement costs. If you sell the house yourself, you will have to estimate the costs yourself.

Road signs.

If there is a busy cross street at the end of your street, talk to your neighbor about permission to put up a yard sign indicating your house.

Sell ​​in the spring if you can.

Spring is the optimal time to sell your home. If you can list your home in the spring, you’ll have a better chance of selling it quickly and at a better price.

Don’t be offended by low offers.

When buyers see a home listed for sale by owner, willpower they think they can get a burglary in the house. Expect low offers and don’t be offended when they come. Don’t forget that low offers often turn into reasonably priced sales. When I sold my second home, the buyer had originally put in a low offer. My house was listed for $459,000, but the original offer was for $425,000. Months after the original low offer, the same person appeared out of nowhere and we finally agreed on a $450,000 asking price. Basing your sales price on a professional appraisal will avoid many low offers. It also helps to make your counter offer because you can point out that any counter offer you make is below market value.

Simple trading advice.

Virtually all buyers will expect the sales price to drop. Let’s say your house is listed for $400,000. Just between you and me, let’s say you’re willing to accept $390,000. If a buyer makes an offer of $390,000, consider the following counter-negotiation strategy. Explain to the buyer that lowering the price by $10,000 only lowers the monthly payment by about $60 per month (about 6% interest). That’s not much. Instead, offer to give the buyer $7,500 CASH at closing to use for home improvements, decorating, or to apply toward the first 3 mortgage payments. At a rate of $60 per month, the buyer would have to own the home for TEN years to realize the real financial benefit of giving you $7,500 IN CASH.

The beauty of this bargaining tip is that it’s a great way to get a buyer excited and allows you to pocket $2,500 more than you wanted for the house. If you’ve asked a lot of questions, you’ll already know what the home buyer doesn’t like. If your house doesn’t have a fence, for example, you could use that as a negotiation strategy. Instead of reducing the price by $10,000, offer the buyer $7,500 cash at closing to spend on adding a fence to the property. Negotiations are all about finding out what’s important to the buyer and making a counter offer that excites the buyer.

Encourage potential buyers to get pre-approved.

Explain to prospective buyers that sellers take offers more seriously when the buyer is pre-approved because the seller has a reasonable degree of assurance that the deal will go through. Help the potential buyer understand that if a seller receives two offers, one from a buyer who is pre-approved and one from a buyer who is pre-qualified, the seller is much more likely to accept the pre-approved buyer’s offer. buyer. You just never know who is going to buy your house. You might offer this advice to a couple who are waiting for their own home to sell before making an offer. If you give them this friendly advice and they go through the pre-approval process, it could speed things up if they end up wanting to buy your house.

Keep a list of people who have looked at your house.

Fifty to eighty percent of FSBOs end up listing with real estate agents. If you end up listing your home with a real estate agent, you will need a list of prospective buyers who viewed the property prior to the listing date so that they are exempt from your contract with your real estate agent.

Consider relocating your pets while your home is on the market.

Pet owners don’t like to hear this, but pets scare off many potential buyers. Many people are uncomfortable with pets, some buyers are allergic, and some are really afraid of animals. At a minimum, keep pets and pet toys out of sight during showings. If possible, arrange for your pet to stay with a friend or relative while your home is on the market.

Copyright © 2007 Wade Young.