FOR SALE BY OWNERS – 10 NECESSARY STEPS
Are you considering selling your home yourself? You would be surprised at how many homeowners actually start out with that For Sale by Owner (FSBO) sign in their yard prior to hiring a Realtor. But the public isn’t quite aware of the vast number of sellers that try the FSBO route because the homeowner typically does not follow through with the necessary steps in marketing to the public, so the listing is essentially a secret. The number one mistake that a FSBO typically makes is only putting a sign in the yard and thinking that the perfect buyer is just going to miraculously stumble upon their dream home with a casual drive by. Do not fall into this trap as a seller and know that internet, social media, and newspaper advertising are essential in marketing your home effectively. Buyer agents are not driving around town in search for their client’s dream home. Agents and buyers have all the information regarding property for sale at their fingertips, so make sure your home is easy to locate online. If you are serious about selling your home by owner, take the time to read these 10 steps in order to prepare for your listing and market the home successfully to the public.
This article is not intended to encourage sellers to sell their home without Realtor representation because selling by owner can be a very difficult experience. Often times, sellers and buyers end up in legal disputes when they do not hire a Realtor or consult with legal council throughout the process. This information is only intended to help those sellers that are determined to sell their property themselves without representation to provide some assistance through the legalities and marketing process.
1. CONDITION: Before you put that sign in the yard or even think about advertising you have to focus on the condition so that you are ready when that very first potential buyer walks through the door. Don’t wait for the feedback from showings, fix or update those things now that you think will be a potential issue. Most sellers are also buyers, so think about what you are looking for when you preview other homes. One of the first things that attract you is the curb appeal. The front of your home is the first impression and one of the most important things that will get people inside. Make sure the yard is groomed, the landscape has nice plantings with fresh mulch, and nothing catches a buyer’s eye more than fresh exterior paint. Then focus on making sure the interior is clean, organized, smells fresh, and is staged with no clutter. The piles of magazines, pictures all over the refrigerator and clutter on the kitchen and bathroom counters have to go! To make sure your home is ready for the market, you may even want to have your property inspected by a professional home inspector and advertise to the public that you have already had a home inspection. Negotiating repairs after an accepted contract can be frustrating and is one of the most common reasons buyers back out of contracts. When you get time, read my blog on home inspections.
2. PRICING: Now that the home is ready to sell you have to price it accordingly. If you are marketing and pricing it effectively, you can usually get at least 3 showings in the first week. It is important to know that most of the time the first couple of showings are the most serious buyers. If your price is too high, those same buyers will not be around in 4-6 weeks when you decide to lower the price, because they will have already made another purchase. Make sure you have a way to obtain comparable homes that have sold in your area. Remember, just because another home in your neighborhood has the same amount of bedrooms and bathrooms, it does not necessarily make it comparable. You have to consider square footage, finished or unfinished basement, garage size, updates that the other homes have or do not have, the size of the yard, and overall condition. If you pay a small fee to the Property Valuation Assessment website (PVA), it will assist you in the sales prices of homes in your area: http://www.pvalouky.org/
3. LEGAL CONSIDERATIONS: Make sure you are prepared with all of your legal documents before putting your home on the market. You will need to complete a property disclosure form to have available for potential buyers to review, have a sales contract ready, MSD disclosure if the home is in the floodzone, and lead base paint disclosures if home was built before 1978. Most contracts and addendums can be purchased on legal websites or local office retail stores. However, I recommend that you speak with a real estate attorney or a local Realtor to help you understand Kentucky real estate laws to protect yourself and also to familiarize yourself with negotiating techniques. If you decide to not hire or consult with a Realtor prior to the listing, you may want to consider hiring a real estate attorney to ensure you are not violating any state regulations, EPA, KREC, HUD, or fair housing laws. You may also want to look into hiring a transaction broker once the home sells. Some Realtors (transaction broker) may agree to represent your best interest from contract to closing, and since they did not participate in the marketing of your home, the service is at a discounted rate.
4. PHOTOGRAPHS: This is another extremely important piece in placing your home on the market. When you advertise in magazines, newspapers, on the internet, and in social media, the picture is going to be the tool that draws customers to your home. You’ve got the curb appeal, so now it’s time to show it off! Use a high pixel digital camera with updated software so that you have options of cropping, enlarging, and enhancing colors. Your digital camera should allow you to freely upload the images to flyers you create, making it easy to send to advertising companies, and now you can use the #1 tool that sells homes: the Internet. Make sure you don’t stop with the front of the home and take multiple pictures of the rear, the yard, the interior, and the garage. You should average taking a total of 70 to 100 pictures; this will allow you the ability to have a large number of photos to choose from in your advertising. I would suggest actually using approximately 10 to 20 of those photographs for the Internet. A furnished home always photographs much better, so make sure you take those photos before you move out.
5. SIGNAGE: Make sure you use a colorful sign that is large enough for the public to see from several blocks. Make sure your sign is not blocked by telephone poles, other signs, or neighbor’s cars. Write your phone number in very large black marker to ensure that a customer can read your number. Make sure you know the sign ordinances for your area before putting up pointer signs in your neighborhood. The Louisville Metro Government is fining around $250 for sign displayed on easements and many neighborhoods have their own restrictions regarding signs on corners. Check with the ordinances and covenant restrictions for you neighborhood.
6. INTERNET AND MEDIA ADVERTISING: Over 94% of current buyers are now searching for their next home using the Internet. It is imperative that you find a way to place your home on the Internet and find a way to drive people to that webpage. Look for syndicated websites and local for sale by owner sites. The goal is to get your home on as many websites as possible. If you choose only 2 or 3 websites you are missing out on a large percentage of buyers by limiting your internet marketing. You may want to consider hiring a web designer to create a website with specific tag lines to direct buyers to your home. Once you have a website, place that website address in all of your flyers and newspaper advertising. Do not overlook the social media craze as well. It is imperative to market your home on at least 3 social media outlets. Some of the more popular websites are Facebook, Twitter, LinkedIn, and Pinterest.
7. NEWSPAPER ADVERTISING: It is currently a seller’s market because housing inventory is very low in the Louisville area. But if your home only has a sign in the yard without other marketing, your property is still a secret from these eager buyers. Be creative and expand your advertising and use local newspapers like The Voice, The Pioneer News, The Courier Journal, The Oldham Era, etc. You will find that with such a flood of people using the Internet for marketing that paper advertising isn’t as expensive as it used to be but more effective than you believe.
8. DISCLOSURES: It is important to have plenty of detailed information available to everyone that views your home. In addition to the basics such as square footage, number of bedrooms, baths, neighborhood information, etc., it is imperative that you include your property disclosures, lead base paint addendums, and MSD floodzone determinations in your packet of information. It is always a nice touch to top that packet with a cover page with bullets and pictures showcasing your home so that it stands out as they preview other properties throughout the day. If your neighborhood has any deed restrictions you should also offer the covenants and restrictions to all potential buyers.
9. OPEN HOUSES: Have as many open houses as possible to attract buyers to your home. I’ve found that sending letters or postcards to neighbors inviting them to the open house really does increase traffic and sales. Invite them and ask them to bring a friend or family member. You would be surprised how many neighbors want their friends and family to live close to them. Make sure you place an open house sign on the propery at least five days prior to the open house. On the day of your open house, place colorful balloons on the yard sign and pointer signs throughout the neighborhood leading from a main road. Even neighborhoods that do not allow signage in their neighborhood will allow it for Sunday open houses. Place at least 2 balloons per sign as they pop frequently due to the wind. The Courier Journal has a great feature on Sundays where you can place a large ad for your open house for $89 which includes a photo, price, remarks, and contact information. Do not skip this step; on average about half of our open house traffic comes from the Courier Journal.
10. EASY TO SHOW: Make sure your home is easy to show. When buyers are viewing 5-7 houses in one day the worst thing they want to hear is that they have to meet someone at a specific time to see your house. When previewing so many it is hard to give a definitive time, so allowing buyers or Realtors the ability to schedule a time frame within an hour window is usually appropriate. Place a lockbox on the property to make access easy for Realtors. Always keep jewelry, money, credit cards, medicine, and anything else of value locked in a safe. There have been reports over the last couple of years in the Louisville area of people trying to steal medication during open houses, so you may have to decline allowing the public to use your bathroom. Here is one last but extremely important point when selling your home: it is in your best interest to advertise online and in your newspaper ads that you are willing to work with buyer agents and pay them a commission. Another big mistake by FSBO sellers is the unwillingness to work with and pay a commission to a buyer’s agent. Most buyers are working with a Realtor so unless you want to completely segregate yourself from the highest percentage of buyers, market in all internet and newspaper ads that you are paying out a commission to a buyer’s agent. Good luck in selling your home!
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