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Selling a Home

Selling on Your Own?

At Four Seasons Real Estate, we are committed to help you get what you want. Some people may want to try to sell their home without the assistance of a REALTOR®. Although there are tremendous risks involved in doing this, we understand that some people will still want to try, and we still want to help you. We’ve put together some things that you need to be aware of to protect yourself and your home if you choose to try to sell on your own.

  1. Beware of“For Sale By Owner” systems or organizations. Typically they are selling advertising, not service. The fees they charge are paid, regardless if you sell your home or not. They cannot legally represent you or advise you without a real estate license in your state. The value they provide is in their advertising or marketing tools. They cannot “list” or “offer” your home for sale without a license.

  2. Know the costs involved in selling your home. Selling your home is not like selling your car or a bicycle at a garage sale. There are many things to consider that need to be negotiated up front that will be needed to get from the buyer saying he wants to buy your home to actually collecting your money and turning over the keys. There are Home Inspections, pest inspections, appraisals, mortgage commitments, Title Searches, judgment searches, Preliminary Title Commitments, Surveys, Deed preparation, tax pro-rations, Title Fees, Closing Fees, Escrows, mortgage pay-offs, release of liens, pre-payment penalties, liability transfers, and many other concerns and potential costs you may have in selling a home. Make sure you are aware of these before you enter into an agreement.

  3. Know the value of your home. Keep in mind that any Appraisal or Competitive Market Analysis is almost exclusively based on homes that were sold with the value of the services of a REALTOR®. Just like the value of an extra bedroom or a garage is part of the value of a home, so are the services that were provided. For that reason, most buyers will want to deduct that value from your price. Since the buyer will be working without the service or advice of a REALTOR®, they will most likely expect to deduct from 10% to 20% from your asking price to compensate for that value. The services of a REALTOR® add nothing to the cost of a buyer. People looking for homes not listed with a REALTOR® will most likely be looking for a bargain.

  4. Know whom you are letting into your home . Opening your home up to strangers is probably one of the most dangerous things you will do if you sell on your own. Not only is it a physical danger to you and your family, but you allow strangers to view all of your possessions and then let them know when you will or will not be there. Develop a verifiable screening process before letting people into your home. Even giving out your address or phone number can be dangerous if you don’t know whom you are giving it to.

  5. Be Prepared to provide all the disclosures required by law to prospective purchasers before they decide to purchaser your home. Failure to provide the proper disclosures could make any agreement you sign worthless if the buyer decides not to buy. It could also expose you to accusations of fraudulent or deceptive practices. There are Federal and State disclosure laws you must abide by. Know them and make sure you have made the proper disclosures.

  6. Be Prepared in the event a purchaser wants to buy your home. You may want to have an attorney prepare a contract that will allow you to fill in a few blanks so you can get a commitment from your purchaser when he’s ready to buy. Another, less likely, alternative is to have your attorney available when you have an appointment to show your home. Most attorneys will require you and the buyer to make an appointment during their regular business hours. If the buyer feels that he should have an attorney to represent him, (your attorney will advise the buyer that he is representing your interests), you may have to wait until he finds an attorney, who will need to talk to your attorney. An attorney’s responsibility is to protect you from the legal perspective in a transaction. Most of the basic terms of your agreement need to be negotiated between you and the buyer before you meet with the attorney. You need to be prepared to negotiate the price and terms of the sale of your home yourself.

  7. Know if your buyer can purchase your home. This may be difficult, but you need to know if your buyer can afford to buy your home before you tie it up for 60 to 120 days, only to find out he can’t. You will need to ask him some personal questions about his job, how much money he makes, how much money he has to put down, if he has ever filed bankruptcy, and even determine if they have good credit. You will need to know where and what type of financing he is getting and determine if there will be additional costs or time involvement for you. A pre-approval letter is important but they usually are not binding on the lender since they will still have conditions that need to be met before they give the buyer the money. A rule of thumb that lenders use is that a buyer will qualify for a payment that is no more than 28% of his gross monthly income and his mortgage payment and all other payments cannot exceed 36% of his gross monthly income. FHA and VA financing use a 29%-41% rule of thumb. Keep in mind that these are only guidelines and all information must be verified. Even what appears to be a qualified buyer can still be denied a loan. In fact, your home has to qualify too. Some types of mortgage loans require specific minimum standards and other guidelines that could dictate if a loan is approved or not.

  8. Beware of entering into other agreements that are dependent upon selling your home without making sure you are protected. If you have to sell your home, for example, before you purchase another, you need to spell that out completely and allow for the possibility that your home doesn’t sell, even if you have an accepted agreement. You must be certain that if something goes wrong on the sale of your home that you are not stuck with two home and two mortgages.

  9. Make sure that all terms of your agreement to purchase are being fulfilled . Everything needs to be done within the time limits spelled out in the agreement or it could become void. The last thing you want to happen is to go to the closing expecting to collect your money and find out that something wasn’t done and the lender won’t close. This includes things that you need to do too. You have to make sure a deed has been prepared, you need to order a payoff for your mortgage well in advance of your closing, with a per diem amount you will owe until it closes. If you have other liens that have shown up on your preliminary commitment for title, you need to have specific payoff amounts for those. There are hundreds of things that need to fall into place for a closing to happen. Some of them will be done by the mortgage company, some will be done by the title company, some will be done by the buyer and you have your responsibilities too. Until they are all done, the transaction cannot close.

  10. Know what you are signing at closing . In addition to knowing what you are going to be charged for and what you need to bring to closing, you also need to know what you are signing. There will be dozens of documents you will need to sign at the closing. An attorney can advise you if he is present at the closing and many times the closing agent will attempt describe the purpose of each document. If you are uncertain, make sure you read and understand each document before you sign them.

  11. Avoid stress. As you can see, selling your own home can be dangerous, risky, complicated and devastating if it falls apart. As we said before, we want to help you get what you want. The real estate professionals from Four Seasons Real Estate can help you through the process with the least amount of inconveniences to you. Since the value of your home is based on what other homes have sold for, with the assistance of REALTORS, we are confident we can get the full market value of your home in the least amount of time. If you decide to sell on your own, please take heed of the advice we have given here. We will always be there to help you. Avoid the stress. Please contact a Real Estate Professional from Four Seasons Real Estate to discuss marketing your home today.

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