Preparing to Sell Your Property
For Sale By Owner Tip
1: Establishing
The Value--Pricing A House
Our first fsbo tip is, that along with location and condition, the pricing of a house is a major component of the reasons why a house will or will not sell quickly. Although the pricing should not be dealt with lightly, some sellers have a tendency to put too much emphasis on the price and not enough on the condition, ending up with a house that is overpriced for its current condition and the overall market. Even if you find an unaware buyer that appears willing to pay the high price, when the buyer applies for a mortgage, the chances are good that the lender's appraisal will force the price back down to market value.
It's important to
get it right the first time
Care and time should be taken when
establishing the original listing price.
If the house is
overpriced, it won't sell, no matter if your a realtor or selling your house yourself via fsbo advertising.
If you overprice the
house with the intention of reducing the price later just to "see what the
market will bear", when the price of the house is lowered, it signals to buyers
that it was (and still may be) overpriced.
If the house is
under priced, it most likely will sell quickly--to the detriment of your net
proceeds.
Some factors that affect the price
Location: You can't get away from this one. If your house is located
in a desirable area that is in demand, you will be able to get a higher price
than you can for the same house in a less desirable area.
Condition: A house that has been better maintained and shows better
will always sell for more than one that has had deferred (neglected) maintenance
and needs work.
Desirable amenities: If a house has
amenities that are currently popular in the marketplace, it will bring a higher
price.
Methods of setting the price
A comparison of similar properties in the same general area that compares actual sold prices. IsoldMyHouse.com provides this information on your home through our On-Line Home Evaluation Service so you can obtain an accurate report on the value of your home before listing it for sale. Some of the information you'll see includes address, sale date, price and square footage for up to 30 comparable properties in real time. Buyers: use the On-Line Home Evaluation Service to obtain up to date values of houses you're interested in, important Phone Numbers, Agencies,Services, and Demographic info for the town, or street you are thinking of moving to. Sample reports are available. Get a Home Evaluation/Report.
An estimated
valuation is placed specifically on your house by a professional appraiser. An appraisal will take into
account location, condition and sale prices of comparable properties in the
neighborhood.
For Sale By Owner Tip 2: Selling a House on Your Own -
For Sale by Owner
With the potential rewards that can be gained by saving $4000, $8,000, $12,000, or more by not having to pay a brokerage commission, many people wonder why 20% of home sellers don't undertake the task of selling their houses on their own. Possibly it has something to do with expertise. Many home owners who consider a self sale of their house back off when they see the level of knowledge and commitment that is needed to do an effective job with fsbo advertising. If you decide, however, that self-selling is the best option for you, you will find the vast majority of the information on our web site to be of value. Most of what you will find here will be geared to doing the job yourself. The most successful home sellers are those who take an active role in the process. If you feel that the best route is to sell your home yourself, then having as much information at hand is crucial.
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Disadvantages Of Selling A House On Your Own |
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Hints on Selling Your House on Your Own | |
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Preparing Your House
Our next fsbo tip is about preparing your home for showings. Even if you have been extremely conscientious in the
maintenance of your home during the time that you have owned it, putting it on
the market requires taking the next step, which is to check every aspect of your
house, repairing, freshening, or changing whatever necessary.
For Sale By Owner Tip 3: Preparing Your House--Exterior
The first step in preparing the exterior of your house (a
buyer's first introduction to it) is to take a clear-headed look at the house
from the street. Stand at the curb and look at your house as a buyer might. What
stands out and catches your eye? The beautiful landscaping and the new roof? Or
does something else strike you? The faded exterior paint? The ruts in the
driveway? The 2 missing shutters? Remember, this is how your home will
"introduce" itself to a potential buyer. If the appeal isn't there, they will
likely move on to the next available house, no matter how beautiful the interior
of your house may be!
If you
need major improvements or renovations to your house, do them before you put it on the market. The average
buyer simply does not have the "vision" necessary to see the job done (if you
are planning to do the improvements prior to closing). If you are attempting to
sell the house as a "fixer-upper" be aware that even though many buyers say that this is what they want, when confronted
with the prospect of actually buying one, they
often run for the hills!
Exterior Preparation For Sale By Owner Tip 4: Preparing Your
House--Interior If you get the buyer into the house, it is important to
make their visit as pleasant as possible--and that means having the whole house
ready. You want them to be as comfortable as possible, and to linger in the
home. A "turn off" will send them scurrying quickly to the next house on their
list! One Room
At A Time Entry Must be especially inviting for your guests (your
potential buyers). Make certain it is well lit, clean and has nothing
laying around either inside or outside. Paint the front door if it even
remotely needs it. If you normally use a back or side entrance to your
house, pay particular attention to the front entry. You rarely see it but
this is where the buyers will enter! Living Room or Great Room
If possible, keep furniture at a bare minimum so that
traffic flow is easier and the room does not appear smaller than it
actually is. If bookshelves, curio cabinets, and the like are
overflowing with books and knick-knacks, remove some of
them. Family Room If this is the room you live in the most, make it
look inviting but not overly lived in. Keep furniture at a minimum but make the room look
like a comfortable place to spend time. Kitchen Clean the exterior of all appliances. Clean the
oven interior. Clean or replace the stove hood filter. This is often
overlooked, usually dirty and greasy, and looked at by a lot of
buyers. Clean cabinet faces. Make them
shine! Remove all clutter and unnecessary items from
countertops and clean all countertops and backsplashes
thoroughly. Clean vinyl or ceramic floor. If you have ceramic tile elsewhere in the kitchen,
pay particular attention to the grout--make sure that it's clean. If it is
discolored, there are "grout whitening" products that are available. Bedrooms Remove all clutter. If you don't need it, store it or
pitch it! Arrange or remove furniture to maintain good traffic
flow through rooms. Remember, there may be three or four people in each
group that walk through your house. Bathrooms Make sure all bulbs are working and have the highest
wattage available and safe for each fixture. Brighter is
better! Clean all ceramic tiles. Check the grout for
cleanliness and deterioration. If faucets drip, fix them. Thoroughly clean sinks and tubs. If rust spots are on
the porcelain, attempt to remove them. Remove any evidence of mildew from the shower and
bathtub. Products are available that spray on and quickly kill the
mildew. Basement If the basement is damp or musty, consider a
dehumidifier. Give prospective buyers room to move around.
Clutter...well, you know the drill! Garage Remove all junk: broken tools, old car parts, toys
from the 1960's, etc. If floor has oil marks, clean it (cleaning solutions
are available at most home improvement stores and work with a normal
garden hose). Miscellaneous Replace the furnace
filter. Interior Preparation
Painting: When it comes to preparing a house, painting gives you the best return for money
spent. Which rooms should you paint? Any that have dirty or marked walls
or any rooms that are currently painted in dark colors. Keep it
neutral--off white or antique white is the best. Carpeting: At the very least, all carpeting needs to be steam
cleaned. Any worn, stained or foul smelling carpet should be replaced. You
may be tempted to give a "carpet allowance" and that may work. Just
remember, most buyers do not have vision. Operation: If you are not having a whole house
inspection done,
check all faucets, toilets, and electrical items for correct
operation. Safety: Make sure that your house is safe. Not only can a
wobbly railing stop a sale, it Could also cause an injury to a potential
buyer who is not familiar with your house (and is spending time looking
instead of being careful). Clutter: If an item is not necessary for your day-to-day
life, box it up and store it or throw it out! Fireplace: Have a professional fireplace or woodstove cleaning
and inspection. The buyer will most likely request it anyhow. Getting it
done in advance impresses the buyer and makes the home appear cleaner and
fresher smelling. Closets: Make sure all closets are neat, clean, and
organized. See above item on clutter. Doors and Windows: Check all for smooth operation. Replace any cracked
window panes. Cleaning: Even though you may consider your house clean and
tidy, a thorough cleaning--including dusting, washing, and waxing
everything--will always make a house more
appealing.
For Sale By Owner Tip 5: Time To Show Your Home! Your house has been checked, inspected, and cleaned from
top to bottom. You've read a fsbo tip or two. You have priced it at what you feel is a fair price. The
marketing and fsbo advertising program is in full swing. Now it is time to put all of
the preparation into action: showings! All of the work that you have done up to
this point will only have an effect when a buyer walks into your house for the
first time. Give all family members assigned jobs in advance that
will go into action when a short-notice showing is scheduled. Everyone
must know their duties and carry them out, so that you don't end up
banging into one another trying to get everything done
quickly. Open every window covering. All drapes, curtains and
blinds should be positioned to let in maximum light. Buyers like a house
to be "light and bright," so accommodate them! Turn on as many lights as
possible. Make sure the house smells good.
Baking cookies, often recommended, may be overdoing it, but pet odors,
smoke, or greasy cooking odors definitely will not work! Air out the house just before
the scheduled showing, but close the windows (unless it is a perfect day)
before they arrive. Six very important words: no clutter, no clutter, no
clutter! Make sure that everything is spotless. Pay particular
attention to the bathrooms and the kitchen. In the bathrooms, towels
should be fresh and clean, sinks and baths scrubbed, and the floor freshly
cleaned. In the kitchen, make sure all dishes are put away and countertops
and sinks cleaned. Check the thermostat to make sure that the house is
at a comfortable temperature. Remove pets from the house, or at least, keep them
outside. Pets under foot will quickly put a damper on an otherwise
positive showing. Make sure Fact Sheets are available and easily
accessible. For Sale By Owner Tip 6: Home Improvements An important part of the ownership of a home is the
preparation for its eventual sale. A good example of this is maintaining records
of any capital improvements that you make to the house, since the value of these
add to the basis of your house. When your house has sold and all proceeds have
been collected, your capital gains will be based on the difference between the
sales prices (less any selling expenses) minus the adjusted basis. The IRS lists
the following as increases to basis: The chart below lists some other examples of
improvements Additions Miscellaneous Plumbing Bedroom Storm
windows, doors Septic
system Bathroom New
roof Water
heater Deck Central
vacuum Soft
water system Garage Wiring
upgrades Filtration system Porch Satellite
dish Interior Improvements Patio Security
system Built-in
appliances Lawn & Grounds Heating and Air Conditioning
Kitchen
modernization Landscaping Heating
system Flooring Walkway Central
air conditioning Wall-to-wall carpeting Fence Furnace Insulation Retaining
wall Duct
work Attic Sprinkler
system Central
humidifier Walls,
floor Swimming
pool Filtration system Pipes,
duct work Record keeping. You should keep records to prove your home's adjusted
basis. Ordinarily, you must keep records for 3 years after the due date for
filing your return for the tax year in which you sold your home. But if the
basis of your old home affects the basis of your new one, such as when you sold
your old home before May 7, 1997, and postponed tax on any gain, you should keep
those records as long as they are needed for tax purposes. For Sale By Owner Tip 7: A Pre-Listing Whole House
Inspection It is pretty safe to assume that a buyer who contracts to
buy your house will want to have a professional whole house inspection conducted. Most sale contracts are written
with a "contingent upon an acceptable whole house inspection" clause. So why not
wait until you have a buyer who wants and will pay for an inspection? While many
sellers do wait for just this situation, there are a few compelling reasons for
you, the seller, to invest in a professional whole house inspection before listing your house. 1) If you were
planning to do any cosmetic repairs or remodeling before listing your house, an inspection may
reveal additional defects that your cosmetic repairs could have masked. A
pre-listing inspection gives you the opportunity to fix possible underlying
problems right the first time. This saves you the time, trouble, and money of
fixing a seemingly small repair, then finding out there is a larger problem,
forcing you to destroy your work, fix the underlying problem, and then do the
cosmetic repair all over again. What to look
for in a professional inspector and
inspection. NOTE: Doing a pre-listing whole house inspection does not
guarantee that a buyer will not opt to have another done at the time of the
contract. Nor does it guarantee that the second inspector will not find items
that first did not discover (or think important enough to note). What it does
guarantee, though, is evidence that you have spent the time (and the money) to
make sure that the house is without defect. In addition, if you get into a
contract squabble over repairs at contract time, you will have evidence backing
up your position.
For Sale By Owner Tip 8: Yard Sales Many home sellers have a "moving sale"--they hold a yard or
garage sale after their home has been sold, right before they move. It is a much
better idea to hold your sale before you even put
your house on the market. If you have visited any of the other pages on this
Site, you probably know how important it is to not have any clutter, excess
furniture, or just plain junk anywhere in your house when it is on the market. A
perfect opportunity to get this accomplished is to Have a yard sale as soon as you decide to list your
house to sell any excess items. Plan at least 2 weeks in advance so you can schedule
advertising. Organize everything that you will be selling. Keep
like items together from the beginning. Prepare signs to be put up the night before the sale.
Locate areas where signs can effectively (and legally) be
placed. Put prices on everything before the sale. It will
save you a lot of time answering questions and buyers will feel more
comfortable. But, be prepared to negotiate!
Overall appearance:
Remove
any junk or clutter from the yard. This includes tree limbs and leaves,
but especially goes for junk cars or parts, lawn tractors, etc. Overall appearance:
If the
exterior of the house is dirty or moldy, power washes it. If it is in need
of paint, get competitive bids if you can't do it yourself. Grass: If
possible, reseed any bare areas of the lawn. Landscaping: Trim all
shrubbery and plantings. Trim trees if necessary, especially dead
limbs. Driveway: If the
driveway is stone and looking lean, add a coat of gravel. If it is
asphalt, consider resealing. Decks and
porches: Power wash and seal, stain or paint. Gutters and
downspouts: Check gutters and downspouts to make sure they are
clear and functioning properly. Lights: Make sure that all exterior lights are
operational. Landscaping: If the
season is right, plant colorful flowers where appropriate. Landscaping: Add mulch
to planting beds and around trees. An inexpensive but very effective way
of freshening the look of the yard. Windows: Make sure the exterior (and the interior) of windows
is clean and operational.
Many home sellers make the mistake of ignoring
certain repair or maintenance items in the hope that a potential buyer will
either not notice, or if they do, telling them that they (the seller) will
repair or replace the item. Most buyers do not have vision. They
are not able to look at a room that needs paint and carpet and imagine it fresh
and attractive. Telling them that something will be cleaned, or painted, or
repaired may work with some, but the majority will not be able to envision the
house after the changes have been made and will scratch your house from their
list.
1) Improvements
2) Additions
3) Special
assessments for local improvements, and
4) Amounts you
spent after a casualty to restore damaged property.
The IRS defines improvements as those items that "add to
the value of your home, prolong its useful life, or adapt it to new uses. You
add the cost of improvements to the basis of your property."
Examples: Putting a recreation room in your
unfinished basement, adding another bathroom or bedroom, putting up a fence,
putting in new plumbing or wiring, putting on a new roof, or paving your
driveway are improvements.
The records you should keep
suggested by the IRS include:
1) Proof of the
home's purchase price and purchase expenses
2) Receipts
and other records for all improvements, additions, and other items that affect
the home's adjusted basis
3) Any Form 2119 that you
filed to postpone gain from the sale of a previous home before May 7, 1997
4) Any worksheets you used to prepare Form 2119, such as
the Adjusted Basis of Home Sold Worksheet or the Capital Improvements Worksheet
from the Form 2119 instructions
2) You will know, in
advance, of defects. You will have an opportunity to repair them before the
first potential buyer ever sees your house. Experience has shown that when a
buyer, through their own home inspection, finds a defect, they tend to look for
more.
3) A completed whole house inspection signals to
buyers that you are a conscientious seller. If a buyer is torn between two
houses--your house and another that has not been pre-inspected--it is very
possible they may feel more comfortable with yours.
4)
It removes an "unknown" from your selling process. There are plenty of
"unknowns" when you sell a house--when will it sell? How much will it sell for?
Will the buyer's financing be approved? By discovering (and repairing) any
defects up front, you remove at least one uncertainty from the selling
process.
Hints
for a successful yard sale