FSBO Fatal Mistakes, Why Is Selling A Home For Sale By Owner So Hard, Part 1
Posted Sep 26, 2007 @ 11:58 pm, Viewed by 619 Visitors, Read 638 Times.To read part 2 of this 2 part series go to the FSBO fatal mistakes part 2.
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Fatal Mistake 1: Owners who try to sell their own home are prime targets for bargain hunters who will try high-pressure to force you into taking offers far below market value. In other words, they want to “steal” your home. These may be market-savvy “sharks,” who will disappear if they can’t get what they want, or they may turn out to be excellent buyers who will pay a fair price if you don’t roll over for their initial, “lowball” offer. Remember, too, that the reason you’re trying to sell your home yourself is to save the money you would ordinarily pay for the Realtor fees & not give that savings & more to the buyers. Many buyers who approach “For Sale By Owner” properties are hoping that they’ll save the broker’s fees, in the form of a lower sales price. Fatal Mistake 2: It’s easier to resist the pressure from bargain hunters if you’ve done the right kind of research to determine the value of your home. Try to find a minimum of 3 homes similar to yours that have sold in the past 3 months and in this market price your home at least 1% below them. Also, try to find at least 3 similar homes that are currently for sale. These homes are your competition. If your competition offers more home for the money, your home will increase their value in the buyers eyes, and of course remain unsold. Pricing your home in the fair market range is critical to your success. When collecting information about recent sales, don’t rely on word of mouth. Verify every sales price at your county Recorder of Deeds office. This will let you know if the neighbor is being truthful or if they are stretching it (you’ll be amazed at the number of homes in a neighborhood that have sold for less than the neighbor said). If you price your home too high, you’ll quickly lose credibility among potential buyers. Remember, a home will sell for the highest price it is going to sell for if it sells in the first 2 or 3 weeks it is for sale. If you are still unsure, have a professional appraisal done on your home. This will give you something to show potential buyers the value of your home. Do not rely on appraisals that were done in connection with a refinance loan, or home equity loan, though – these have often been inflated to enable the bank or finance company to write a bigger loan and collect more fees.
Fatal Mistake 3: There are thousands of horror stories about for sale by owners who have tried to sell their own home only to have a would be home buyer tie up the sale of the home for 3 to 6 months while they try to get financing. Eager to sell, homeowners fail to find out, before any contracts are signed, whether the buyers have made arrangements for a loan or whether they have even spoken to a lender at all. 85% of buyers in the market to buy a home today do not know how much they can afford, according to lender guidelines for home loans. It is very disheartening when a homeowner finds out the buyer cannot qualify for a loan to complete the sale. Even though you may feel uncomfortable doing so, you must require buyers to show proof of their ability to get a mortgage before you sign a sales agreement. Do not tie up your home in a contract until the buyer has brought you a letter from their lender stating they are pre-approved. Pre-approved generally means the lender has done at least some of the checks necessary for approval (credit report, income verification, etc.). Following this advice could save you months of headaches, lots of time and money, and the loss of other buyers who may be legitimately qualified to buy your home.
To read part 2 of this 2 part series go to the FSBO fatal mistakes part 2.
James Boyer
Realtor Associate
488 Springfield Avenue
Summit, NJ 07901
973-376-0033 (Office)
973-647-0253 (Direct)
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Social Bookmarking2 Responses to “FSBO Fatal Mistakes, Why Is Selling A Home For Sale By Owner So Hard, Part 1”
James Boyer
Taj, listing by owner on the MLS almost always requires that you pay a company such as fsbo.com or forsalebyowner.com to do this for you. It hardly increases your chances of selling at all, but it does guaranty that another 0 of the FSBO's money gets spent with 100% no guaranty of success. In watching the FSBO's in New Jersey who pay extra to get listed in the MLS I have not seen one of them that sold before they listed their home for sale with a full service Realtor. My advice, stay away from the FSBO companies, all they are doing is making money off of the illusion that what they offer may work. 19 our of 20 times it does not work, just the same odds that a FSBO who goes to Home Depot and buys his own FSBO sign, so why pay those companies $500 + for no value added???
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James Boyer, is a resident of Morris Township in Morris County New Jersey and Specializes in listing and selling homes in Morristown, Morris Township, Madison, Florham Park, Chatham, Summit, Short Hills, Millburn, Maplewood, & South Orange New Jersey and Morris Essex & Union County Real Estate. Read More
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flat fee mls Listing by owner on the MLS is worth a try.