FSBO Guide

Ask Maine Home Seller

For Sale By Owner Guide

 
Welcome to the Real Estate Business!

You have probably put a lot of time and effort into your home and understandably desire to get the most out of it now that it is time to sell and move on.  I am not here to either encourage or discourage you from taking on the sale of your home, but rather I do feel it is important for you to have as much information as possible to make the decision that is right for you.

I know there are some that may find it strange for a realtor to share information with people who are considering selling their home themselves, but it is important to know that realtors want homes to sell.  We do not like it when homes linger on the market and we all benefit from a healthy housing market.  For Sale By Owner (FSBO-known as "fisbo") homes are part of that market.

Where Do You Start?  Planning & Research

This FSBO guide is meant to be a starting point.  You should consult with as many sources as possible, including state and federal resouces, while preparing to sell your home on your own.  This preparation time can save you a lot of headaches down the road.  Some of the information may seem daunting and a FSBO sale is certainly not for everyone.  This guide includes information on forms you will need, service providers, choosing a price, FSBO marketing, and other details of the process.  I have made all of the information below available in a printed and/or email version of my "For Sale By Owner Guide."  Simply call (689-9886) or email me at mainehomeseller@gmail.com to request a copy.  Please know that I will not pester you, flood you with junk mail, or fill up your inbox.  I do not look at us as competetors, but rather as colleagues.  As you go through the process of selling your home, please let me know how it is going and feel free to contact me with your questions and concerns.  Most especially, give me the happy news when your home sale has closed.

Forms You Will Need To Sell Your Home

1. Property disclosure form. You are required by law to disclose all known defects of the home to potential buyers.  Additionally, the state of Maine requires you to provide potential buyers with specific information regarding a private water supply,  the home's heating system, waste disposal system, and known hazardous materials.  Check with the state for specific details of required disclosures.
 
2. Purchasers access to premises agreement. This agreement sets conditions for permitting the buyer to enter your home for activities such as measuring for draperies before you move.
 
3. Sales contract. The agreement between you and the seller on terms and conditions of sale. You will need to check with the state and/or a local real estate attorney to be sure that the contract is in compliance with all federal and state regulations.
 
4. Sales contract contingency clauses. In addition to the contract, you may need to add one or more attachments to the contract to address special contingencies — such as the buyer’s need to sell a home before purchasing yours.
 
5. Pre- and post-occupancy agreements. Unless you’re planning on moving out and the buyer moving in on the day of closing, you’ll need an agreement on the terms and costs of occupancy once the sale closes.
 
6. Lead-based paint disclosure pamphlet.  If your home was built before 1978, you must provide the pamphlet to all sellers. You must also have buyers sign a statement indicating they received the pamphlet. This pamphlet is available from the EPA athttp://www.epa.gov/lead/pubs/leadpdfe.pdf. You will need to check with the EPA for the appropriate form. This is a federal requirement that carries a hefty fine if not completed.

$$$$   Tips For Pricing Your Home   $$$$

This is the most crucial step of the process.  I have noticed that a good majority of for sale by owner homes in our area are overpriced for the market.  Remember, you cannot save the same money twice.  Sellers of FSBO homes want to save themselves the commission they would need to pay to have the sale and marketing of their home handled professionally, and buyers of FSBO homes are looking for a deal as well.  The most successful FSBO sales, will meet somewhere in the middle.  

·          Consider comparables. What have other homes in your neighborhood sold for recently? How do they compare to yours in terms of size, upkeep, and amenities? Try to keep an objective viewpoint when considering comparable home sales. 
 
·          Consider competition. How many other houses are for sale in your area? Are you competing against new homes?
 
·          Consider your contingencies. Do you have special concerns that would affect the price you’ll receive? For example, do you want to be able to move in four months?
 
·          Get an appraisal. For a few hundred dollars, a qualified appraiser can give you an estimate of your home’s value. Be sure to ask for a market-value appraisal. To locate appraisers in your area, contact The Appraisal Institute (www.appraisalinstitute.org) or ask your REALTOR® for some recommendations.
 
·          Ask a lender. Since most buyers will need a mortgage, it’s important that a home’s sale price be in line with a lender’s estimate of its value.
 
·          Be accurate. Studies show that homes priced more than 3 percent over the correct price take longer to sell.
 
·          Know what you’ll take. It’s critical to know what price you’ll accept before beginning a negotiation with a buyer.

No-Hassle Home Evaluation Request



Is Your Buyer Qualified?

Unless the buyer who makes an offer on your home has the resources to qualify for a mortgage, you may not really have a sale. If possible, try to determine a buyer’s financial status before signing the contract. Ask the following:
 
1.  Has the buyer been prequalified or preapproved (even better) for a mortgage? Such buyers will be in a much better position to obtain a mortgage promptly.
 
2.  Does the buyer have enough money to make a downpayment and cover closing costs? Ideally, a buyer should have 20 percent of the home’s price as a downpayment and between 2 and 7 percent of the price to cover closing costs.  Although many current loans may still work with as little as a 3% downpayment.
 
3.  Is the buyer’s income sufficient to afford your home? Ideally, buyers should spend no more than 28 percent of total income to cover PITI (principal, interest, taxes, and insurance).
 
4.  Does your buyer have good credit? Ask if he or she has reviewed and corrected a credit report.
 
5.  Does the buyer have too much debt?  If a buyer owes a great deal on car payments, credit cards, etc., he or she may not qualify for a mortgage.

If at any point, you decide that
selling your own home is simply not for you,
I would be happy to meet with you for a
free no-pressure consultation.
Just give me a call. 689-9886.

 
Other Considerations

Consider offering a buyer's agent commission.  Most buyers in this market have signed up with a buyer's agent to represent them in the purchase of their home.  If they choose to purchase a for sale by owner home, they will still owe a minimum commission to their agent (generally 3%-depending on the agreement.)  This may discourage them from even looking at FSBO homes since they will need to pay the commission themselves.  Offering a buyer's agent commission can bring more potential buyers to your home, resulting in a quicker sale.

Consider hiring a local real estate attorney and/or title company to help you with the sales contract and closing process before you begin.  This may make the process smoother and avoid surprises.

Consider holding an "Open House" to jump start the marketing of your home.  Here are some tips for preparing for your open house.

·          Advertise your open house. Ideally you should advertise both the weekend before and the weekend of the open house. Check with the local paper to see when their ad closing deadlines are.
 
·          Create a property summary sheet. This sheet gives prospective buyers an overview of your home. Include dimensions for each room, copies of a property survey, summaries of utility costs and property taxes, and a list of when capital items such as roofs and furnace were added.
 
·          Develop a sign-in form for prospects’ addresses. You’ll ideally want both phone numbers and e-mail addresses to follow up with prospective buyers.
 
·          Put up signs. One or two days before the open house, place directional signs at major intersections within three to four blocks of your house. Be sure you check on anti-sign regulations in your area.
 
·          Get your house ready. Remove clutter, clean your house, wash your windows, add flowers, turn on lights, open draperies and blinds, remove valuables and breakables, confine pets, turn on soft music, and set up a table for your property fact sheet near the entrance.
 
·          Develop a follow-up sheet. Getting feedback on your home from prospects who attended your open house will give you a better understanding of how to make your home more appealing to buyers.



Be sure to read my webpage 
"Getting It Sold" 
for important information on how to
sell your home faster and for top dollar.


Aggressively Market Your Home


Once your home is ready to sell and you have completed your planning and research, you will need to market your home to the public.  Since most buyers find their homes through their real estate agent who sends them properties listed in the Multi List System (MLS) or through tools like Realtor.com only available to sellers through realtors, you will be at a disadvantage and will need to aggressively market your home to be successful.  Simply posting a sign will not be enough.  Here are some marketing ideas that may help you spread the word.

1.  Take a lot of photos!  Use a digital camera to take flattering photos of your home.  You will be able to use these in any flyers or internet advertising you create.

2.  Consider creating your own website for advertising your home.  Search google for "listing website" and you will find several companies out there that have template sites available for this purpose.

3.  Mail or email a flyer about your home listing to everyone you know.

4.  Use Postlets.  This is a free website at www.postlets.com that you can use to create a web flyer for your home that can then be posted onto craigslist, twitter, and even facebook.  Be sure to re-post to these sites using postlets every week to keep your listing fresh.

5.  If you have decided to offer a buyer agent commission, be sure to mail or email your home's flyer (with commission information) to all local real estate agents.

If at any point, you decide that
selling your own home is simply not for you,
I would be happy to meet with you for a
free no-pressure consultation.
Just give me a call. 689-9886.


Once again, this FSBO guide is meant to be a starting point.  You should consult with as many sources as possible while preparing to sell your home on your own.  I know that real estate can be tough and a FSBO sale is not for everyone, but I hope this guide has been helpful.  All of the information above is available in the printed and/or email version of my "For Sale By Owner Guide."  Simply call (689-9886) or email me at mainehomeseller@gmail.com to request a copy.  Please remember, I will not pester you, flood you with junk mail, or fill up your inbox.  I do not look at us as competetors, but rather as colleagues.  As you go through the process of selling your home, please let me know how it is going and feel free to contact me with your questions and concerns.  Most especially, give me the happy news when your home sale has closed.


Kristen Wheatley
Direct:  207-689-9886
Cell:      207-240-2250
mainehomeseller@gmail.com