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7 Common For Sale By Owner Mistakes

1. There are tons of horror stories out there among homeowners who have tried to sell their own home only to have a buyer tie up their home for 3 to 6 months trying to get financing. Because of anxiousness to sell, homeowners fail to find out ahead of time, before any contracts are signed, whether the buyers have made arrangements for a loan or whether they have even talked to a lender at all. 85% of buyers in the market to buy a home today do not know how much they can afford, according to lender guidelines for home loans. It is very disheartening when a homeowner finds out the buyer cannot get a loan to complete the sale. Even though you may feel uncomfortable doing so, you must be firm about getting information out of buyers vis a vis their ability to get a loan. Do not tie up your home in a contract until the buyer has brought you a letter from their lender stating they are pre-approved, not pre-qualified. There is a difference. Pre-approved means the buyer has been approved for a loan by the underwriter (the person who says yes or no) and there is money waiting for them once the house is approved. Pre-qualification is the loan officer's opinion as to whether the buyer qualifies for a loan. The loan officer does not make the loan decisions. They only take the buyers' information and pass it on. The underwriter is the one who says yes or no. Taking this advice could keep from experiencing months of headaches, bunches of time and money, and turning away other buyers who may be much more qualified to buy your home.

2. Watch out for the bargain hunters. Owners who try to sell their own home are prime targets of bargain hunters who will try to high-pressure you into taking offers far below market value. In other words, they want to steal your home. Do not let the dollar $$ signs intimidate you. Stick to your guns.

3. Make sure you do tons of market research before you price your home. Try to find a minimum of 3 homes similar to yours that have sold in the past 6 months. Also, try to find at least 3 homes that are currently for sale that are similar to yours. These homes are your competition. If the other homes offer more for the money, your home will sell your competition. Pricing your home in the range of fair market is critical to your success. Many homeowners get greedy and grossly over-price their homes. This destroys the marketability of a home. Do not rely on rumors or what your neighbor said. Verify every sales price. This will let you know if the neighbor is being truthful or if they are stretching it (It is amazing the number of homes in a neighborhood that have sold for less than the neighbor said). At the other end of the spectrum, some homeowners price their homes too low. They fail to get the fair price they are entitled to. The asking price should represent good value to a potential buyer. Buyers are not likely to make you an offer based on an unreasonably high asking price.

4. Watch out for the stalkers. These are dishonest people who come through your home to see what they can come back to steal at a later time, when you are not home. They will appear to be very legitimate buyers. Always ask to see the potential buyers' driver licenses. If they refuse, do not let them into your home. Explain the reason you want to see their driver licenses. If they are legitimate buyers, they will be more than happy to show you them. Write their names and drivers license numbers down. This could mean the difference of being safe or being robbed. Be firm in this step. Do not be a wimp. It could cost you more than you imagine.

5. Be prepared for the buyers who make you an offer less an amount equal to a real estate commission. This will come right off the top before they start to negotiate with you. Buyers who look at homes for sale by the owner know the seller is trying to save the real estate commission. Decide how you intend to handle this problem ahead of time. A home is worth only so much, regardless of who sells it. If you net the same amount as you would if you listed your home with a professional from this kind of buyer, there's not much point in doing all the work yourself.

6. Be prepared for phone calls late at night and very early in the morning. Potential buyers are only concerned about one thing - their own needs. They will try to pressure you into showings at times that are convenient for them, but may be very inconvenient for you. Don't be so anxious that you let them walk all over you. Be friendly and kind, but be firm. If they are really interested in looking at your home, they will be accommodating. Experience has shown that the high-pressure, pushy buyers are the ones that are the time wasters.

7. Do not fall into the trap of trying to copy what the traditional real estate companies do in marketing your home. Do not spend the money you are trying to save on display ads placed among the traditional real estate companies' ads. Studies have shown that owners who sell their own home and place ads in the classified section under "homes for sale" will get five times more calls than those who run ads in the display section (including traditional real estate companies). Be creative in your marketing. Look to other industries which use good marketing to pattern your marketing after. Don't be afraid to be different. Advertising only sells 5% of the homes advertised (statistically proven by the National Association of Realtors). Incidentally, only 1% of realtor open houses sell at the open house. Why would you want to have your home open for 3 hours on a Sunday afternoon, only to have potential buyers come straggling through and never buy. If you want to hold an open house, hold it open for only a fifteen-minute period of time. Place signs in strategic places. Flood the neighborhood, apartment complexes, laundromats, grocery store bulletin boards, and a bulletin board at work with flyers stating this is the only time you will hold your home open. Everyone must be on time. State that no showings will be held prior to this time. If someone wants to look at your home prior to this time, be firm in telling them the date and time set is the first time they can look at your home. This open strategy creates the auction affect when a group of people shows up. Have written hand outs to give them on price, features, and other information. Let everyone in attendance know the date when you will be looking at all offers. Make this date 3 days after the open house. This gives legitimate buyers time to get other opinions and inspections, if they desire. All of this creates, in the mind of those in attendance, scarcity (We'd better move on this one before someone else beats us to it), social proof the house must be a great value, and the urgency to make a decision... just like an auction. The mindset is this must be a great home, if there are so many others looking. This is creative marketing.

Last but not least...

Know what's involved in the paperwork, and be familiar with local laws and prictices regarding real estate transactions. There are many complexities to todays transactions from representation issues to time limits and various contingencies. The last thing you want is to have an invalid contract on your hands. This information is only intended to help you sell your own home, if that is your desire. Why would I be so willing to share this information with you? Is their some kind of catch? The answer is no. My way of doing business is to provide value without expecting anything in return. My business exists because others tell their friends, family, and co-workers about the extraordinary level of service they receive. When your needs are met, I know you will tell others how we have helped you in some way. In addition, you may eventually need some help. I hope you will call on those who care about your needs before their own. This is not a common way for business people to conduct themselves today. Good luck in your home selling! If you would like information on my services for home sellers, like yourself, Contact Me or call 206.954.3859.

 

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