Have you ever tried to sell your house by Owner? This is not as easy as it seems, Realtors seem to have a monopoly on the home selling business. Well atleast it did not seem easy until I did it, and successfully sold my own house netting more money.
Yes, this is my home, but when selling, the mind frame needs to be that it is now a property, a house, and marketable item which is no longer my home. Detach yourself, it’s the one biggest thing you need to do! We will have a new Home soon (well, maybe we won’t have a traditional home, but that is another blog – stay tuned).
I would like to consider myself a little knowledgeable about some things, and thought selling my house by myself would not be that difficult. Most people seem to use Zillow. I figured I would get a good audience reach, specially if I priced my house correctly and took good pictures.
Making repairs around the house. We all know there are those thousand little things we have put off, just do them! For me it was a loose faucet handle, loose doorknob, roof fascia which needed to be replaced, etc… There are numerous little things you can do which cost very little more, and can make a big improvement, specially if trying to sell your house by owner.
Things to check:
- Roof, soffit, and Fascia around the roof.
- Exterior of house for wear, cracks, damage, re-paint.
- Plumbing, faucets, toilet mechanism for leaks, water heaters…
- Electrical, replace faulty outlets, replace outlet covers and light switch covers, or clean existing ones.
- Showers, scrape off old dirty grout and re-grout or silicone corners and edges. We all know how grimy some of those can get over time.
- Windows, go around and clean them, then check to see if they need to be resealed.
These are all little things that won’t cost much, but trust and believe later one if not down, they can cost to you alot more. There will normally be a home inspection done.
Cleaning up; Depending on what paint you had used, most walls and doors can just be wiped down with a damp cloth to remove stains, dirt, and dust. If not, then do some touch up paint. Sweep and mop everywhere. Re-grout those showers, re-seal the windows,
DECLUTTER and DEPERSONALIZE!!! We are all hords, and love our families. After years in a house, you have tons of little knick knacks, and little items from trips and vacations everywhere! Pictures of the family (for us, it was the wife and I) are on all the walls. Go around and put all those knick knacks and personal items in a box. Stock the pictures in a closet if you have to.
The people who are coming to see your house need to put themselves in your house, they need to think of how this will be their home. When they see the knick knacks you have collected over time and all your family pictures, they will see it as your house, not their future home. Put it away, store it, box it.
Spray and fumigate. I bought some bug killing spray at Home Depot and sprayed the lawn, around the exterior walls, and every doorway and window. I sprayed inside around the corners, baseboards, and behind cabinets and furniture. I wanted to make sure no even an ant was crawling around. I normally spray about once a month, so this was not that big for me. We live in South Florida, there are bugs everywhere!
Once you think you are ready, step back and look again!
I spent a two weeks cleaning up, painting, repairing things and just making sure the house would look nice and fresh. Took what I thought were really good pictures using a go-pro camera on wide angle, and I was ready to list the house on Zillow.
Just as I thought, I got plenty of views the first day, over 200 views and 9 users saved my home details. Problem is I got calls from 2 investors and 18 Realtors who wanted to list my house on the MLS. But not one call from an actual home buyer…
Why no Calls from Buyers…
After talking to one Realtor, he said that It would be difficult selling my house by owner because all the calls from Zillow and most for sale by owner websites go to Realtors, and since I was not offering a commission to Realtors they would funnel the leads generated from my house listing to other properties for sale which did pay them a commission.
That was not what I had seen on Zillow, actually I saw a button to contact the seller on Zillow. So I went to my browser, opened a new incognito window and went to my property listing… It was there, the button said contact Agent, and not contact owner.
I tried to make a contact with my self through my own Zillow listing, and sure thing, it did not go directly to me, it went to a Zillow service where they hand the lead to a Real Estate agent. I soon received a text message from a Zillow rep contacting me. They did not send me the contact information on the person interested in my listing, instead sending it (selling the lead) to a Real Estate person in the area.
Then I did this on Zillow…
Well since they wanted to make my personal contact information so difficult to find, I went ahead an modified the listing… The first line now Reads “For Sale By Owner Contact ###-###-####“. Now anyone reading my listing description will see my contact information right up front.
Now I started getting calls, tons of calls from Realtors. A few from actual buyers that wanted to come see the house, and even some investors which wanted to low ball and offer all kinds of “creative ideas”.
I talked to every Realtor, and even scheduled an appointment with most to “pre-view” my house. That is what realtors say, they are working with prospective buyers in my area and want to “pre-view the house” to see if it’s a match for their buyers. No they are not, they just want a chance to get you in person so they can convince you to list your house for sale with them.
I did not mind, I assed them to bring comparables in my area so I can see other homes that sold and those that were for sale. Most of the realtors did give me some great ideas and brought with them great information to help me sell my house on my own.
Some of the Realtors even offered to do open houses for me on the weekends. I know they didn’t want to sell my house, they wanted to grab leads from the buyers or prospective buyers that were out shopping.
Since I was selling my house by owner, I was able to list open houses on Zillow. The cool thing is that Zillow will email those who showed interest in your house listing that you were doing an open house on the weekend.
I did an open house every weekend, Saturday and Sunday. I bought signs from Lowe’s and placed them at the end of the road pointing towards my house. Bought a Large “OPEN HOUSE” sign, and placed in in my front yard.
I will tell you that plenty of neighbors come around just to be nosy and talk, but that is ok, they have friends..
Things to do during the Open House
During the open houses;
- we had soft music playing
- turned on all the lights and opened a opened all the window shades to allow the room to look nice and bright
- Lowered the AC to make the house nice and cool, we’re in South Florida, nice and cool is good!
- Spray some smell good sprays around the house…
One thing we did not do and wish we did was to get a welcome sheet and collect the information of those who visited the open house. There were plenty of couples who visited that I wish I would have had their contact information to follow up with- Lesson learned!
After almost two weeks, no solid buyers. Some bites, but nothing solid.
Listing house on MLS – Multiple Listing Service
By now I had talked to several dozen relators, and they all said I should list my house for more, and how they would get me more money for my house. Well, numbers are numbers. It’s what they house sells for, minus their commission. What matters in the bottom line, my NET sale proceeds. Sure they can sell my house for more, but that does not always mean more money in my pocket. With the average commission of 5%, some wanted the full 6% commission to list and “advertise” my house for sale, that is alot of money being reduced from the sale price.
I would also have to think about inspections, negotiations after inspections, and then the appraisal of the property. If they sold the house for more money to cover their high real estate commissions, and the appraisal came in lower than the sale price, I might have to lower the sale price so the buyer can achieve their finance requirements.
Because most buyers will need to finance, and the financing is normally based on an appraise value, if the appraisal came in lower than the purchase price, the buyer might not have qualified for financing or they would have had to make up the difference in cash from their pocket. Bank will normally only finance up to appraised value of the house, anything above the appraised value the buyer would have to fork out from their cash. This is above the percentage they are already being required to put as a down payment.
So the lower my selling commission, the lower I would be able to list the house for sale on the MLS. By listing at a better price I would attract more buyers and probably get more interest in the house, thereby selling the house quicker. That is what happened.
I found a “flat fee MLS” service which charged me $67 to list my house on the mls. They offered no service other than listing on the mls, but gave me access to all the forms I would need to complete the sale.
Because I am trying to sell my house during the slower real estate season, the first week I got no calls from the mls. I got a little worried and even asked the flat fee company to verify the information was listed correctly. I still continued with my for sale by owner open houses on the weekends.
I even allowed one realtor to do an open house on a Saturday. She put up signs everywhere, tons of them. Her efforts were not much more fruitful than my own open houses.
I had one guy come back a second time with his wife. He then made me a low ball offer. I just replied NO. He then said he would send me another offer, and took his time.
Then… On a Sunday a Realtor brings by a prospective buyer, shows her the house. We thought nothing of it, until the realtor shows up 2 hours later alone. He knocks on the door and says that his client wanted to buy the house. He said she was looking to make an offer. Her offer was low, and I told him what I wanted my NET numbers to be including his commission. I told him that I would not accept anything less. The next day, an offer for almost exactly what I wanted, with the terms I wanted. Perfect!!! I will take it.
Reviewing the offer to buy my house
When selling your house by owner, you need to understand that it’s not always about the numbers, but also the terms of the purchase.
Sure, we all want to sell the house for more, but what about everything else…
I wanted to have the inspections done quickly. Because I am selling the house As-Is with right to inspect, this means that if they find things wrong with the house they can either back out of the contract or we would have to re-negotiate those inspected items. This can cause the purchase to fall through, therefore I wanted the inspections done as quickly as possible. I wanted no more than 10 days to inspect and make a decision. This gives me the opportunity to get the house back on the market as quick as possible and hopefully find another buyer.
I also wanted a quick closing, and fast appraisal. When a customer is ready and pre-approved, a quick closing is not a problem, no more than 30 days.
A Prospective buyer should have some sort of pre-approval and hopefully even a preliminary underwriting statement. This means that their information has been sent to the prospective lender and underwriting stipulations have been described. Stipulations are things such as verification of income, verification of assets, and other things a lender will need to verify before approving and lending the money to the buyer to purchase the property.
After reviewing their offer to buy the house, I signed the offer and sent it back to the buyer’s agent. I also had to send them a Seller’s disclosure, HomeOwners association disclosure and lead based paint disclosure.
Since my house was built before 1978, I was required to send the buyer a lead based paint disclosure. This legally tells them if I know or don’t know of any existing lead based paint on the property.
I also need an association disclosure. This property is within an association, even though the association is a voluntary association and I am not required to make any payments. I still had to disclose this to the buyer. In Real Estate transaction, everything has to be in writing!
Closing agents, title company. In my case the buyer chose the closing agent, this is the title company that will do the closing. They normally do all the investigating and making sure the title is free and clear and the buyer is legally able to purchase the house without any liens or clout on title. They also charge for these services… Check the fees, you can always choose someone else to do your paperwork and title searches. You can even hire your own real estate attorney.
Since I am still in the process, let’s see how that goes…. Updates coming.