Practical steps to sell your house privately
Why sell privately?
Well let’s get straight to the point, the main reason to sell your home privately is to save money. And this is a big reason, because by not paying commissions to agents, you can save up to $15,000 on a $500,000 house. This is calculated using an agent’s commission of 3%, however they can often be higher than this.
So if an agent sells your house and spends about 60 hours (it can often be much less, especially during boom markets) of work selling your house for $500,000, showing people around, answering phone calls, and placing their advertisements in the newspaper. This means that you are effectively paying your agent $250 per hour, for something that you could easily do yourself.
Why don’t people sell privately…?
The main reason people choose to use agents is because they think there is something mystical about selling a house and also that they couldn’t handle the negotiation.
However, the simple fact is that homes sell themselves, not agents. If your home is priced well, you’ve put some effort into the appearance and marketed your property, you’ll find a buyer, no problem.
This means that for every hour you put in, you will pay yourself $250 per hour using the example. Wouldn’t this money be better in your pocket instead of the agents?
And who is more qualified to sell your house than you? You can point out all the features and good aspects of your house, little things like, this part of the house gets a lot of sun in winter, things the agent just wouldn’t know about.
How to Sell Private..?
Once you’ve decided to sell privately, all you have to do is follow these steps, and you’ll be on your way to opening the bubbly…!
Step 1. Study the market in your area
To ensure you have a good understanding of the current real estate market in your area, take the time to study current trends and prices. Pay special attention to houses similar to yours, in your area. Look at the advertised sales price vs. How long the house has been on the market.
Pay particular attention to properties that have sold, this will give you a good idea of current market value, as those homes have actually sold for that price.
You can find this information yourself by looking at real estate Internet sites, however, there are companies that will provide you with current real estate statistics for your area, usually for a fee. If you are interested in this information, simply type ‘real estate statistics’ into a search engine.
Step 2. Get an independent assessment (not through agents)
Pricing your home right is imperative, as a home that languishes on the market for too long will become outdated, buyers will wonder what’s wrong, and undervaluing your home could lose you money.
Studying your local area will give you a good idea of your home’s value and what price to set. However, it’s generally a good idea to get an independent appraisal (not through an agent) to give you an appraisal of your home. This service will usually cost a couple hundred dollars, but it will keep you from undervaluing your home. They will also be able to point out problems with your home, which you can take care of before the sale.
Step 3. Get a contract drafted by a lawyer before you start the sales process
Selling a home yourself is simple, however one thing a professional must do is the sales contract. Regardless of whether you are selling privately or through an agent, a lawyer or conveyance agent will be needed to draft your sales contract.
It’s important to give some thought to things like the clearance period and sale inclusions and exclusions, and other factors at this stage. However, your transportation attorney will be able to guide you through this. This will ensure that all the factors you want to determine in the sale are worked out in advance.
Step 4. Get a Pest and Building Report on Your Property
It is a very good idea to get a pest and construction report on your home before you put it on the market. This will ensure that you can repair any problems you may have with your home that may delay the sale.
It will also give buyers the peace of mind that the home is structurally sound and free of pests. It’s a good idea to make copies of this report and include it in your information packet that you give out to potential buyers.
Step 5. Put together a home information packet that you can give to buyers.
This will ensure that the most common questions buyers may have (and forget to ask during the inspection) are answered. You can also use this packet to point out good features of the home, such as a sunny backyard during the winter, which is why the private seller is best qualified to sell your home.
Information to include is things such as:
o Cost of fees/amenities/utilities
o City Hall Area
o Nearby schools
o Nearby shops and services
o Recent repairs/extensions completed
o Any other information that you think will help sell your property
o Dimensions of the land
or Dimensions of the house
o Contact details (please provide a mobile phone number if available and be sure to answer it)
Step 6. Marketing/Advertising
Even if you are selling privately, it is very important to establish a marketing plan. Traditionally, the way most houses were noticed was with a for sale sign out front, since most buyers already live in the local area. A for sale sign is still essential, however statistics show that the internet is the first port of call for buyers looking for property these days. So to get your marketing campaign started at the very least, you need to have a for sale sign and an internet listing.
For-sale signs and internet listings are the cornerstones of advertising your property, however there are other simple, inexpensive and easy steps you can take to market/advertise your property.
You can print a brochure on your computer, which has the relevant details about your property and a photo. You can then post this on the bulletin boards around town.
You can tell all your friends and family that your house is for sale. An effective way to do this is with a mass email. Using the network of people you know will quickly and effectively reach hundreds or thousands of people, as your contacts let other people know.
You can also place a small text ad in your local newspaper, where you can state your Internet listing ID so that people who like the sound of your property can take a look on the Internet. This way you get cheap advertising and people can still see your property.
So, to summarize your marketing/advertising campaign, you should include some or all of the steps below…
1. Organize an Internet listing of your property
2. Set up a ‘private sale’ sign for your property for sale
3. Make a flyer about your property and distribute it around your city
4. Use your personal contacts to spread the word that you are selling your house
5. Place a cheap text ad in your local newspaper
Step 7. Prepare your negotiations
Before starting your ad campaign, it’s a good idea to have a trading plan. The negotiation is the part of the private sale that most people think is the ‘hard part’. However, if you know what outcome you want, it’s as easy as selling a car.
Again, I must emphasize that it is important to have your home appraised correctly, so that you know how much your home is worth.
Things to consider about your situation when thinking about the negotiation are things like:
o Are you willing to negotiate the price and what is your lowest number?
o Will you offer a small discount for a quick (or long) sale?
o What settlement terms do you want?
Knowing the value of your home and knowing what type of deal you want (this should be stated in the contract) makes negotiating a breeze. Dealing directly with the buyer also allows both parties to reach the best deal to accommodate both parties.
Step 8. Solve and celebrate
Once the deal is closed, your attorney/transmitter will do the rest.
Now all you have to do is congratulate yourself, enjoy the satisfaction of selling your house yourself and save thousands in the process, and open the champagne!
