Tips for Home Sellers

Preparing Your Home for Market - Thinking Like a Buyer

IMPORTANT:  FORMULATE A HOME SELLING PLAN, THEN WORK YOUR PLAN.  For a Seller, it’s all about Preparation, Preparation, Preparation.

Think of your preparation plan as including just three areas: Curb appeal ‑ the first 15 seconds are critical, outside preparation, and inside preparation.  The suggestions listed here are very important. You should make every effort to put them into practice and be done BEFORE YOU ATTEMPT TO MARKET YOUR HOME. 

First, remember that first impressions are vitally important. Make everything about your property appear as close as you reasonably can to: NEW, NEAT, & NEUTRAL!  Second, homes that are decorated in unusual colors (black, red, dark blue, etc.) attract few buyers. Consider painting all walls and ceilings a neutral white, off white or light tan color. Your best choice for carpeting is also a neutral color. This allows the prospective buyer to better visualize their special items and furnishings in the rooms of your house. Neutral colors give the appearance of spaciousness. A little (or a lot) of paint, and replacing the carpet can make the difference in attracting that "one" buyer.  Consider this: A carpet allowance doesn’t improve the look of your house when showing it to a prospective buyer!  Third, make certain that your home is absolutely CLEAN and free of any unpleasant odors ‑ especially animal odors. Most people love their pets, but pets can be, and often are, a real “turn off” to prospective buyers. Remove your animals when you are showing the home. Many people are very threatened by a strange barking dog and allergies to cats are common.  Fourth, clear the home of collections, clutter and mismatched furniture.  Large collections of family photos, trophies, plates, etc. shows the outside world how you’ve made this house YOUR home.  But you now want the house to appear as spacious as possible and enable the buyer to imagine their possessions in your house to make it THEIR home.  Don’t let them be distracted by too much clutter.  Areas of special concern are kitchen counters, bedrooms, and closets.

The most inexpensive thing you can do for the most return in value is to paint.  This does the most to make a house fresh inside and out.  Always consult a real estate appraiser before embarking on a renovation project.  He/She can advise you as to what you can expect for a return on your investment.  You’ll be surprised to find that in many cases there is no return, but the improvement may make your home more saleable.

Price Your Home Competitively!

Methods for Establishing Home Values

1. Appraisal ‑ Accepted by mortgage lenders – most accurate and reliable.

2. Comparables ‑ Not accepted by mortgage lenders, accuracy varies greatly.  Agents call these CMAs (comparative market analysis) and offer to do them free for you in an attempt to get your listing - it’s worth what you pay for it!

A common concern for sellers is where to start with their asking price. In fact, it is one of the most important decisions you will make as a private seller. Do not make this decision lightly. One of the biggest mistakes private sellers make is to over-price their home to leave room for expected negotiations.  Consider that you’re most likely going to meet your buyer in the first 30 days your home is for sale. Over-pricing may cause the buyer to eliminate your home from consideration immediately.  Fortunately, there is a professional available to help you in your pricing decision - a licensed appraiser. You can ask any price you want; however, there will probably be a mortgage loan involved and financial institutions make loans based on the sales price and the appraised value - whichever is lowest. The rule here is: Price it right, maximize exposure to buyers and it will sell itself.

Certified appraisal by a licensed appraiser. COST TO SELLER: $300 to $450

Of all the pricing methods available to you, this is your best option. It is conducted by a licensed appraiser who has invested years in his/her reputation for providing accurate, fair market values to local mortgage lenders and owners. Having an appraisal done helps you avoid two major problems: under-pricing your property, leaving money on the table that you didn’t know about; or, over-pricing and languishing on the market eventually selling for a lower price. A certified appraisal can assure that you are maximizing price while staying competitive; and, it will keep buyers from crossing you off their list because your price is unreasonable.  It is the ONLY method by which you can prove to a buyer what your home is worth and is your only real answer to a “Low-Ball” offer.  Buyers won’t take your word for it and they also know that agent CMAs vary widely and can be unreliable - a lender won’t lend you a dime based on an agent CMA.

FACT: Buyers are "market smart." They know the market. They know how many homes there are in their price bracket. They have already shopped around and know if your home is priced fairly and competitively. 

The Value of a Pre-inspected Home

Most mortgage lenders will advise a buyer to have a whole house inspection as a contingency on their purchase agreement.  This is usually written into the contract such that, if the inspection is not to the buyer’s satisfaction, they can simply walk away.  Your attorney will advise you, as the seller, and place in your contract specific remedies to handle defects you were unaware of if found by a buyer’s inspector.  However, this may still have the effect of putting you back into the negotiations phase of your sale after you’ve taken your home off the market and are expecting to close within weeks or less.  The buyer may want further compensation or demand that the defect be fixed by you at your expense.  A way to help avoid all of this, and increase a buyer’s confidence in your home’s condition, is to have a pre-inspection done by a certified home inspector.  Make sure the inspector is insured, bonded, and comes recommended by another real estate professional you trust - your attorney is a good source.  This will lessen your anxiety about the buyer’s inspector finding something costly that you were totally unaware of; and, it has the added benefit of removing your buyer’s fear that your home may have hidden defects or that they may incur major expenses in their first years of ownership.

The Marketing and Sales Process

1. The key word for any seller is PATIENCE. A real estate agent’s greatest source of income is an impatient seller.  Selling your home takes time. An agent will ask you to list with them for a minimum of 90 days, shouldn’t you give yourself at least that much time. Remember, if you are properly priced and advertised, real estate agents cannot sell your home any faster than you can.

2. Avoid amateurish, homemade signs. A large professionally pre-printed or painted sign sends the message of value, neatness and professionalism. For Sale by Owner & Builder signs are widely recognized and convey a very positive image to your prospective buyers and more importantly, it shows that you are associated with a professional private sale entity. It also shows “Pride of Ownership.”  You don’t want a buyer inferring from your choice of signs that you may have also chosen the cheapest materials to maintain the upkeep of your home.

3. Let your neighborhood "Busybody" know that your house is for sale. Possibly have a "Sneak Preview" Open House for your neighbors. Give friends and neighbors your home photo flyers.

4. Deliver some photo flyers to the relocation departments of large businesses, colleges, hospitals, and anywhere else that may have a transient group.

5. Suggestions for your telephone answering message: "You've reached the Smith house. Yes, it is for sale and yes, we'd love to show it to you. The price is $195,000; it has 3 bedrooms and 2 baths with a finished walkout basement. Please leave your name and number and we'll call you back as soon as possible to make an appointment to show it."

6. Buyers appreciate dealing with a seller who:

A)    is clearly motivated to sell and has done their homework.

B)     knows what they are doing. Without being overly assertive - being organized beforehand demonstrates this.

Absolutely advertise your home on fsbolocator.com and we'll put you on Google and Yahoo.  Agents don’t rely exclusively on newspapers and you shouldn’t either.  In fact, the agent’s purpose in advertising in a newspaper is to sell their agency and gain more listings, not to sell the homes. Additionally, national surveys have shown recently that less than 2 percent of all residential homes sales have come from newspaper ads.  Agents for years have told private sellers that they can’t get the exposure to buyers unless they list with them.  We've effectively eliminated that argument.

Being Professionally Represented

If you’ve decided to be a private home seller, you assume you’re going to be doing all the work yourself.  From the marketing and preparation standpoint this is true whether you’re listed with an agent or not.  As stated previously, having a For Sale by Owner Assistance company in your city solves your marketing issues.  What you don’t have when selling privately is a separate, experienced professional to do the negotiations with your buyer, gather buyer feedback about your home, and protect your legal rights throughout the entire transaction. A large number of private sellers WRONGLY assume that a title company performs this function.  Most title companies in this area have done nothing to dispel this myth.  In fact, most will send out preprinted purchase agreements; and, some title company personnel have been reported to be assisting sellers in filling in the blanks of the contract.  This according to legal experts, borders on, if not plainly constitutes, the unauthorized practice of law as defined by the Nebraska State Bar Association.  Even if an attorney working for the title company is the one giving contract advice; that attorney is clearly causing the title company to practice law without a license, BECAUSE THAT ATTORNEY DOESN’T REPRESENT YOU!

So, where does that leave you?  You have really only two choices: One, represent yourself - not recommended. Representing yourself has a number of drawbacks if you don’t deal in real estate sales on a daily basis.  Ask yourself several questions before you select this choice. (These are the same questions real estate agents will ask you in order to gain your listing by discouraging you from trying to sell privately.) Do you have the time available to deal with all the buyer’s questions and issues?  Are you legally trained to handle contracts and understand all the real estate laws that will affect your sale?  What happens if you misstate a “material fact” about your home?  How do you verify the buyer’s financing?  Who schedules the closing, sets up the inspections, and establishes the escrow account?  How much earnest deposit do you ask for and what can you do with it?  Who’s going to review the Title Binder and ensure there are no Title Defects?  Who’s going to answer YOUR questions when you’re faced with decisions requiring information beyond your experience?

Your second, best and most cost effective choice is to hire a highly experienced real estate attorney with strong negotiation and transaction management skills - you don’t want a personal injury trial lawyer in this position.  Even if you’ve bought and sold numerous homes, this option will greatly reduce your anxiety levels, increase your buyer’s confidence, and help you save two of your most valuable assets - time and your home’s equity.  A good real estate attorney will have a practice focused primarily on real estate and charge a reasonable flat-fee for the entire process.  He will provide you with instruction on how to answer buyer questions; and more importantly, how to handle questions that could affect your legal rights or place you at a disadvantage in negotiations.  He will take all offers directly on your behalf, negotiate your sale, prepare your contracts, coordinate the title and escrow, verify your buyer’s financing, assist in scheduling inspections, and arrange for everything needed to close the sale.

What does an attorney with these skills cost?  The best we’ve found are Robert J. Remack in Omaha (402-898-3145), Mark C. Brown in Lincoln (402-421-1199), Traci Comstock in Council Bluffs (712-256-7150).  These firms charge as little as $895 to handle the entire transaction from negotiations through closing.  Having dealt with numerous so called real estate attorneys over the last decade, our office has found these firms to be the most ethical and consistently successful for both buyers and private sellers.

 Putting Your Plan to Work

 Selling your home requires you to develop a marketing plan and put it to work.  Every real estate sale involves a collection of professionals to properly complete the transaction.  You can hire all of them yourself for less than $2000, pay an agent 7 percent of the sales price of your home for the same services, or pay a bank $2500 plus a buyer’s agent commission (typically 2.8 percent of the sales value) for considerably fewer services. If you hire an agent or a bank, they will receive the commission regardless of how much or how little work they do to sell your home. If you expect to sell your home for next to nothing in marketing costs, you’re probably not going to be successful and will end up signing a listing agreement with an agent and paying that agent thousands, netting far less than you would have if you sold by owner.  With a good real estate attorney on your team like Robert Remack or Mark Brown, and the marketing power of For Sale by Owner Registry, you can SAVE thousands!