Many For Sale By Owners I speak with all ask, “Why should I pay you to market my home? I can market it myself and save the commission.” My response is always the same……. “You shouldn’t use an agent to “market” your home.”
You do not pay me to market your home. You pay me to get your home sold. This means we complete the sale, go to closing, you get paid. You pay me for what happens after the contract is accepted.
Marketing is something I pay for as an upfront cost of listing the property. When a listing is taken by an agent, the sole purpose is to get the home sold to the satisfaction of both parties. Period! No one will be able to attract the right buyer without marketing property, and I do not get my marketing costs reimbursed. If the home does not sell, I do not get paid. So, I pay to market your home.
The value that I bring, as a licensed Real Estate Broker, is what I do after a purchase agreement is received. In fact, when you look at the entire process of selling/buying a home, roughly 10% is in the marketing to attract the buyer. 90% is what happens between getting a purchase agreement and successfully closing on the sale. Contract to Close is where the rubber meets the road. And it can be a very bumpy road!
Here are a few things to consider:
- When you get a call to show your home, are you prepared to qualify the potential buyer? Do you ask to see a letter from a lender stating they can purchase? Do you know if a lender is real or reputable?
- Are you prepared to assist with possibly writing the offer? If you do not allow an agent to bring you a buyer, you are going to have to assume some of the agent’s role.
- Do you know, and have, all of the forms/disclosures that are required to sell your home? Do you understand them?
- Are you familiar with the process of the transaction? Inspection periods? Dates that certain items need to be completed? These are very important, as you can put yourself in breach and not realize it, until it is too late.
- With regard to the inspection period, are you familiar with the different types of inspections? Which are required? Which are not? Which ones are your responsibility? Which are the buyers?
- Can you negotiate the inspection repair request that the buyer makes? Can you do this without killing the deal? Most Inspection Reports are around 50 pages and can scare a buyer. If you are not working with a buyer that has an agent, you are going to have to really negotiate. Most buyers, without agent representation, will simply hand over the monster of a report and say, “Fix all these.”
- Do you understand the appraisal process? Do you have access to current, comparable sales in your area? If the appraisal comes back lower than the purchase price, are you prepared to present your comparable sales to the lender, for possible review?
- Do you know which loans will not allow you to give an “allowance” for repairs, instead of making the repairs? Are you familiar with which loans will require a second inspection to determine that repairs are complete?
- Are you aware that not all loans fit every property? Do you know which loan programs will work with your home?
- If the appraisal comes back with conditions, do you know how to handle them?
- Did you know that certain appraisals stay with the property for 6 months, for the same type of loan? For example, if you receive a contract and the buyer is using an FHA loan, the FHA appraisal received will stay with your home for the following 6 months. It will not be changed for a new buyer, who is also using the FHA program. If you property does not appraise, and you do not adjust to appraised value, you have eliminated the entire FHA buyer pool for the next 6 months. FHA continues to be one of the most used loan programs through out the area.
- Are you prepared to follow up with the loan process during the contract? Are you familiar with what you can and can not be told, by the buyer’s lender?
There is so much more that happens once a contract is accepted than simply getting a buyer interested enough to make an offer. These are just a few of the things that a seller of a For Sale By Owner will need to know.