Mistakes “For Sale By Owners” Make
Drafting the real estate contract on your own. You may think that you are capable of marketing and showing your home on your own. But negotiating the legal side of things is a whole other issue. Drafting your own contracts may result in you getting the short end of the stick and giving up more than you planned. It is always good practice to hire an attorney to help with your real estate contract if a real estate professional is not involved in the transaction. This protects both you and the buyers.
Not developing a marketing plan. You may be under the assumption that all a real estate agent will do for you is stick a “For Sale” sign in your front lawn and hold an open house or two. This couldn’t be further from the truth, at least when it comes to Picket Fence Properties. We actively search out buyers for your property. We are also able to use market statistics in order to price your home to sell. We work tirelessly to promote your home on both traditional and digital platforms.
Improperly pricing your home. Price is one of the most important points to consider when selling your home. As previously mentioned, when you hire an expert, we can use market statistics and facts to price your home comparable to similar homes for sale in the area. A home owner typically takes sentimental points into consideration, often pricing their home far too high and out of the price range of their soon-to-be-buyer. When pricing a home – it’s not what you think your home is worth. It’s the price that someone will pay for it.
Failing to provide the federal lead based paint disclosure documentation. If your property was built before 1978, you’re required to provide a lead based paint disclosure to the buyers. Failing to do so could result in legal consequences and termination of the contract.
Wasting time with unqualified buyers/neglecting to follow up with qualified buyers. Holding an open house seems like a great idea. You have a dozen couples interested in your home, asking you countless questions, making appointments to come back. You spend hours with these potential buyers only to find out that there’s no way they can qualify for a mortgage at this point. Because you spent so much time on them, you failed to follow up with a couple who is already working with a buyer’s agent and came to your home pre-approved and ready to go.
Failing to negotiate. Most for sale by owners aren’t used to negotiating price and other terms during a real estate transaction. Understanding important issues such as earnest money, possession, loan commitment and inspection dates all can play a major role in negotiation in the sales contract. Understanding what items can be negotiated for more or better terms is something the “for sale by owner” should take into consideration.
Providing too much information. You don’t want to come off as sketchy or shady, so you feel the need to disclose eeeeeeverything. The bathroom sink leaks. After a bad summer storm, the basement gets damp. The master bedroom’s window often gets stuck opened or closed. While a seller’s agent would be sure to disclose any important information (the roof needs repair or the attic has asbestos), there’s no need to scare off potential buyers by pointing out tiny flaws. After all, every home has them.
Offering concessions in place of repairs/failing to understand contingencies. If you have a trouble spot in your home (like that leaky faucet), you are much better off repairing these before closing, rather than offering the buyers a concession to fix it themselves. And as for contingencies – this goes back to writing your own contract. Do you know how long the buyer has to secure a loan? To complete the inspection? These play a major role in how fast your home will close. Most FSBOs have problems in this area. This is where we can help you.
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