The moment you start nurturing thoughts of selling your home by yourself, the first thing to do is to find out what time of the year mortgages will be more accessible to buyers, and when interest rates will be low. Sometimes, properties that are not foreclosures or short-sales could also have low housing inventory. This will help you save money, since you aren’t using a property agent to help transact with buyers.
However, you will also need to learn some real estate lingo to help with the selling process, a real estate solicitor, and maybe some pieces of advice from an experienced realtor. Once you’re ready, here are some tips for selling your house without an estate agent.
Selling your home without the help of an estate agent might sound pretty easy – like painting a room, changing bathroom tiles, mowing a lawn, or even selling a piece of jewellery all by yourself. In as much as you will save some cash, you may end up making your room look too gloomy, the bathroom more slippery, or sell the jewellery below current market value. This also applies to selling a property.
Can you sell your home by yourself? Yes, you can. But if you are not in a hurry to let go of the property, you will have to stay organised, focused and do your homework properly in order to attract the right buyers with a good asking price.
Estate agents in the US for example, charge about 6% of your property’s worth. So if the sales price of your house is $375,000, they’ll take about $22,500 – which is a pretty big cut. However, you can save all of that when selling on your own – except when the buyer comes with their own realtor, at which point you may have to pay just half of that amount. However, you are still saving. On the other hand, the business savvy buyers will want to price your property 6% below the market value – due to the fact that there are no agents. This means that you have to do lots of research and improve your negotiation skills.
According to the US’ National Association of Realtors, sellers without negotiation skills tend to lose up to 20% from the sales price of their house – as compared to those who use estate agents. This survey shouldn’t dampen your guts: it simply means you have to work on yourself to become a good negotiator.
First of all, you will need to see your home from a Realtor’s perspective – with no emotional connection. Do not start thinking of how you raised your kids there, held your first birthday party, lit Christmas trees, and so on. Viewing without the emotions will prevent you from being biased, and you will consider the house a financial asset and a source of revenue – like your stocks. Except you have an emotional connection to your stocks.
Secondly, you have to learn how to be firm with buyers. For example, do not just let any window shopper into your home. Ask them for a pre-qualification letter. This saves you the time and stress of walking people who have no serious plans round your home. Besides, those with nefarious plans will simply take note of expensive items they can easily steal later (or even right there). Therefore, learn to say “No” and “I am not selling my house below that”.
Are you willing to be your own agent? Can you pick up calls in the middle of the night, go out in snowstorms to bring in clients, and market your property everywhere and at all times? If yes, then you’re halfway there. A lot of people think selling a house is just about waiting for a buyer to drive by and give you some cash after seeing your “for sale” sign post. You need to be ready to get inside the minds and eyes of an estate agent if you wish to save that 6% commission fee.
Carry out research and find out the value of your home. There are 3 ways to find out your home’s worth – the actual market value, the current appraised value, and tax assessed value.
The actual market value is the price a buyer is willing to offer for your property. If you put up your house for $250,000, for example, and a buyer actually offers you that price, then that’s the value of your home. But if the buyer prefers mortgage payments and the appraiser values your home at $120,000, the buyer has to either agree to complete the remaining payment, or that’s how much your home is worth. You can determine your property’s value through comparative market analysis of homes sold, features of your home, square meters, the neighborhood, and what makes more sales. It’s easy for realtors to calculate this. So you can ask for their advice and assistance, or research for yourself.
The current appraised value is easily found by measuring everything in your home, measuring other houses that are similar, and then making adjustments after comparing yours and the others. You can get an appraiser to do that if it will be awkward checking out people’s houses by yourself. For instance, if your house has a basketball court and others don’t, £7,000 could be added – or if your house is a 4 bedroom while others are 5. However, you will have to be sure of how much a basketball court costs. You may not get an accurate current appraised value, because this is majorly based on what you (or the appraiser) feel is right. A Realtor can help advise you too.
Taxed assessed value is the set of digits on the tax statement of your property. If it’s many years old, it may not value your home accurately enough because it’s calculated based on annual property taxes. It’s usually determined by your city, state, county, or province. You can request another assessment if you wish, but it doesn’t totally mean that’s how much your home is worth – it simply gives you an idea.
However, you find these values, do not earn a bad reputation for yourself by trying to drag an estate agent along under false pretense of giving them a commission after sale.
In as much as you will want to negotiate, do not inflate the price of your property either. Buyers already have an idea of how much a home like yours should cost. Even if yours is the first for them to visit, they will likely not come back if they check out others and find out you inflated the market value of your home. Those who call you over the phone to ask about the sale price when they see your property listed already have an idea of what it should cost.
Everyone thinks their homes are castles. No doubt, but you still need to get thoroughly prepared before listing in the house market.
A survey once showed that the value of your home could increase by 27% if your curb creates a good first impression on the buyer. Some people won’t even enter the house if it looks unappealing from the outside. Factors like outdated colors, peeling wall paint, damaged window siding or gutters, broken driveways or walkways, missing tiles, unkempt lawns and poor looking landscaping can keep buyers away from your property. Your home should be as neutral as it can be. Cut short the flowers and extending tree branches, pick up fruits littered over the lawn and dispose of them, use neutral colors, remove wall papers and personal photos.
Clear out clutter from your laundry cabinets, bedroom cupboards, bathroom cabinets, under stairs cupboard, pantry, kitchen cabinets, attics, the basement, storage, and your garage. This will help make your house look less stuffy. If you do not wish to sell or throw away these items, you can rent a storage unit and move them there. Only leave major furniture, utensils, and features that still makes your house livable.
Go through every room and wash the curtains, replace burnt bulbs, vacuum the carpet, remove old bedding, repaint the bathroom, treat mould or mildew, clean the bathroom mirror, replace broken toilet seats, and make a list of adjustments you need to carry out after a walk through of your home. Once done, then it’s time to market your home.
In the process of marketing your home, you need to make up your mind whether you will allow buyers to bring their agent. The main reason for selling your property yourself is to save, but if you don’t mind buyers bringing their agents, then you will have to pay the 3% commission.
The advantages of allowing a buyer’s agent are: that all the responsibility of negotiation, inspection and even contact with the buyer’s lender in cases of mortgage are placed on the agent’s shoulders. However, the disadvantage is that estate agents are experienced, so you will have to work on your negotiating skills.
The moment you start listing and advertising, include all the items in the house and on the landscape – that can make your home’s value rise. From paintings, statues, pools, bathrooms, and kitchen fixtures to decorations, ensure that you only leave out items you intend to take along when you move. Avoid being sneaky by taking off features that majorly attracted the buyer – maybe because you suddenly have an emotional attachment to them. You can get sued later on. From the cabinet knobs and the light bulbs to the door mat, buyers notice everything.
When you start listing, there are some home marketing tools that can help gain you some exposure. Signage is the most obvious. When designing your signage, use the right bold font, neutral colour, and words to subtly call buyers to action. There’s no need to put everything on one sign post. A simple “House for Sale” with your phone number and 2 or 3 major landscape features can help. If the signage is at both ends of the street, then you can include the house address. Make sure it’s legible and can be seen from afar.
Online marketing is another tool that gives your home exposure. These days buyers search online property sites when they want to purchase a house. So you can search for good websites with great reviews and contact them to help list your home in the open house market. You can simply search “property buyers” in Google (you can include your region), and the first page will show you sites that attract the most traffic. You can start from there. Facebook, Twitter, Google+, Pinterest, and other social media sites are also good platforms to advertise on.
In as much as you’re leaving (for whatever reason), some of your neighbours probably wouldn’t mind having their friend(s) move over to the area. So word of mouth also goes a long way in getting potential buyers to take a look at your property.
Find a title company or an escrow officer to do your paperwork. Once you tell them about your listing, they will get information like date of birth, address, NI number, and so on – to make sure that nothing will affect your sale. A title insurance is also important. You and your buyer will be protected from any liens on your property if your purchase it. The title company holds the buyer’s money till you have submitted the signed contracts.
You will need a real estate attorney to help advise you on pitfalls that occur during property sale, laws governing advertisement and sale, amongst other factors they have experienced while in the field.
With all these said and done, selling your house without an estate agent is possible once you put your mind to it and also follow these tips.