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.
- 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.
- 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.
- 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.
- 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
- 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.
- 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
- 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.
- 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
- 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
- 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.
- 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.