Tips of the Trade
In the Four Points area, educated DIYers may question the idea of paying a listing and buying commission in a home sale. It is a significant amount of money.
Some may opt to go the “For Sale By Owner” or FSBO route – phonetically pronounced fis-bo in the real estate industry.
But often understanding the entire value proposition may go unknown due to the amount of work done behind the scenes.
People want their homes sold without complications and a good realtor will ensure that happens with little involvement from the client.
For anyone considering listing their own home, here are a few tasks to ensure your transaction closes smoothly.
Value proposition: Understand the condition of your home and how to showcase its finest features. Make sure that you get the appropriate amount of money for your home – do not leave money on the table. According to the National Association of Realtors, FSBO listings net twelve percent less than homes listed professionally.
Preparing home: With hgtv, people now have a sense as to how the house should show – spending money to make money is critical. Articulating unique features to the buyer is key to netting more money.
Pricing home: Setting the appropriate price ensures that the home doesn’t linger on the market. Statistically, homes sell for the highest price within the first thirty days of being listed.
Exposure: Make sure you get your home exposed to the greatest number of buyers – remember approximately 150 people are moving to Austin daily. Your target market is not just local buyers. Also hire a professional architectural photographer – iphones take good photos, not great photos, and resolution is critical for buyers who are browsing on the Internet.
Negotiate: Begin with the sale price and then negotiate for the highest price. Talk about terms to protect yourself. Understand that potential buyers purchasing a FSBO typically think they should receive a greater discount because you are not paying a real estate fee.
Qualify buyer: Verify that the offer is binding. Contracts are 20 - 30 pages long; make sure the terms written protect you. Include inspection, appraisal and finance options. Complete your due diligence by: interviewing the buyers lender, ensuring their loan is verified, the money to close is present and there are no contingencies. For example, we have seen offers written as non-contingent and upon due diligence it was discovered that the buyer’s home needed to be sold and the buyer’s buyer also needed to sell their home, constituting a double-contingency. If any one negotiation falls through in this offer, it has a domino effect on the other properties. Contracts need to be written to protect you.
Repairs: If repairs are needed, try to determine a dollar value and adjust the selling price or put that amount towards closing. If you have the work done, you may be legally liable for that repair in the future.
Appraisals: Properties appreciate which means there may not be comparable comps to ensure the property appraises. Physically meet with the appraiser to explain the full value of the property and land. Specifically, in the Four Points Area, we price differently by section due to lot size, view, upgrades, etc. If an appraiser is not local, you need to meet with them to sell them on the value of the home.
The appraisal is your last major hurdle on the sale of your home. If you have completed the aforementioned steps successfully, you should be well on your way to signing a contract. Best of luck to you and make time for due diligence.
This article first appeared in the Four Points Newspaper, Volume 11 - Issue 16, page 4a, April 22, 2015.