For-Sale-By-Owner Paperwork

This post is the fourth and final post in a four part series on how to sell your home without a real estate agent.

Once our house was listed we got our first call just a couple hours later.  Our lock box hadn’t arrived so we had to let the agent and their clients in and we walked to the park while he was showing the house.  Each time our house was shown the agent showing the house left their card.  I called each agent afterwards to find out what their clients thought and their overall impression.  It was during one of these phone calls that I found out that an offer was being made.  The agent simply faxed the offer to the mls4owners.com fax number that was listed.  The fax was supposed to be automatically forwarded via email to us, but mls4owners never received it (fax’s not going through was a frequent problem).  I had not yet purchased our fax machine so I had to go to Staples and have him fax it there while I was on the phone with him.



Once the offer was made we had to review it and decide to accept, counter-offer, or decline.  I forget the exact details, but the initial offer was about 5k less, they wanted us to pay closing costs (3 percent), and give them a $1500 carpet allowance.  We had already felt like we had priced our house low and didn’t really like the offer.  I forget if we officially countered or not, but eventually they offered our asking price and us to pay closing costs, they explained that there bank would give them no more.  We had listed our house two weeks before the federal tax credits for buying homes were just going to expire.  We said that we wanted to wait and see if we could get any other offers the next weekend.  



We went looking ourselves that weekend and found a house we liked so we accepted the offer.  The paperwork involved is called a purchase agreement.  The purchase agreement was what was faxed to us.  When we countered we simply crossed stuff out, and added our amendments and then initialed it and dated it and sent it back.  The entire timeline for closing is based on the dates you signed so dating the initials is important.   If we had received a buyer who did not have an agent mls4owners.com provided a copy of a purchase agreement and we would have provided it to the buyers, or possibly have sat down with them and negotiated the price in person and signed the agreement together.



Our agent we were using to buy a house was very concerned about us not having an agent.  She insisted that we get a copy of the letter that said the buyers of our house had pre-qualified for the loan.  Their agent gave us the copy but insisted that really the paper was meaningless.



Once a purchase agreement has been signed by both parties then there is a whole host of things that need to happen.  The buyer’s agent should be in charge of it all and tell you what they need from you.  The main item is a Seller’s Disclosure.  The agent representing our buyers never requested one and pretty much told us the paper was pointless and we didn’t need to fill it out (I wasn’t impressed with this guy), but if we didn’t give them one it would give them a potential way to back out of the agreement without forfeiting escrow money.  I ended up faxing it to their agent anyway.  When we bought our house the Seller’s Disclosure was returned with the signed purchase agreement.  Once again mls4owners provided this form.



The inspection (assuming this was part of your purchase agreement) is one of the first things that will be completed after the purchase agreement is signed.  I think it is customary for the agent to let the inspector in, and sometimes the buyer will come to the inspection as well (at least this is what happened on the house we were purchasing).  I ended up having to let the inspector into our house because once again the agent we were dealing with was kind of lame.  After the inspection is complete negotiation happens again depending on what the inspection found..  The only things our buyers asked was that our furnace be serviced, which is very common.  For the house we were buying we asked that the sellers clean the gutters, adjust the garage door opener safety settings, and fix a support beam in the attic that was not bolted together properly.  



Other things that have to be completed are: the buyers agent contacts a title and escrow company and starts things going including collecting the buyer’s earnest money, the buyer’s need to turn in all necessary paperwork for their loan, an appraisal will be ordered by the buyers, you need to provide the information about where the money for the sale is to go.  There is a lot of hurry up and waiting.  People demanding paperwork that they could have requested a week ago to be sent to them right away, etc.  It is prudent to get everything done as soon as possible, since most of the responsibilities are the buyers, calling the agent to check up on them is a good idea.  I had a hard time with this because I felt like I was telling him how to do his job, but unfortunately he was slow having his client turn in their loan paperwork and due to some freak FHA problem we ended up closing a day late so maybe if I had harassed him more we could have avoided that.  All of the things that need to be done and how many days you have to do them are described in the purchase agreement, so read it carefully.



Due to discrepancies about when we were actually closing we ended up agreeing on a different possession date than closing date.  When we signed the papers for closing we also paid the buyers for 3 days “rent” so we could stay in the house till we actually had some place to move our stuff.  The rent amount was simply their monthly mortgage amount divided by 30 times the three days we were renting.

Finally the last thing to do is to sign the closing papers.  The title company called and set up an appointment and we signed stacks and stacks of paper and then the house was no longer ours.

If you find these posts useful and wish to offer monetary reciprocation I would gladly accept paypal donations or amazon.com gift certificates.  Even just a dollar would be nice. ;)

How to Use a Self Service Realty Service

This is the third post in a four part series on how to sell your home without a real estate agent.


We decided to go with a flat-fee self-service real estate agency called mls4owners.com. The benefits of this were: we would be listed in the MLS where the vast majority of home buyers are looking for houses. Real estate agents would not be hesitant to show our house because we have clearly stated what their commission is in the MLS listing. And finally, by foregoing an agent we would save about $6000.


There were a few other companies with similar services, but I decided on this one because I liked their selling statistics section on their website and I could find their listings on all the other real-estate search engines I used.   Mls4owners provided us with a lockbox for our door, a professional sign for our house, listing in the Northwest MLS, and the legal forms we needed.   The lockbox came one day after the house was listed, our sign was installed (and uninstalled) for us very quickly.  



Filling out the forms was pretty easy.  Some forms were filled out online while others needed to be faxed.  I highly recommend purchasing a fax.  I went to a used computer store and got one for $20.  At first I kept on going to Staples, but they charge a $1 a page and some things are 10 – 20 pages and sometimes faxes don’t go through.  It was much easier having one at home.  

We were allowed to post 12 pictures.  I highly recommend posting the maximum number of pictures as I personally did not feel inclined to visit houses that did not have many pictures. For my camera I bought a fairly inexpensive wide-angle lens to take the pictures and then used Photoshop to touch them up a bit.  The key in taking pictures with the wide angle lens is to include as much of the room as possible in the picture, but not to distort the picture so much that the room looks a lot larger than it is.  Distorted pictures may upset potential buyers if they feel lied to by the advertisement.  There are different techniques you can use in Photoshop to make the pictures pop. Many agents use these techniques to emphasize and call attention to the listing, but I chose to forego that technique, and go for the most natural look, as I found it a bit distracting as a buyer looking at the unnatural pictures.



I also made a simple color flyer to put in the display box on the sign.  While the flyers were probably mostly taken by nosy neighbors I do think having a nice color flyer aids in the overall positive impression of the house.  


We had two young children and a dog at the time so it was hard for me to have the house in a presentable state at all times so I emailed mls4owners and explained that I wanted a note in the MLS listing that agents should call at least 2 hours ahead of time on weekdays before showing up.  On the weekends we stayed at my parents.  We only ended up having 2 people viewing on Friday so it worked out quite well.



The other item of note in the MLS listing is the agent fee.  You are allowed to list at a flat fee of $500 or more, or as a percentage.  The traditional percentage for a buyer’s agent is 3% so we went with that.  We did not want to risk having an agent try to talk their buyers into not buying our house because that agent wanted to collect a larger fee.  



I also listed our house on craigslist in the for-sale-by-owner section.  We were hoping that we could attract a buyer without an agent and split the savings of the agent fee with the buyer.  Unfortunately the only interest we got from craigslist were some “investment” people who initially posed as a family looking to buy but in the end revealed that they were looking to buy houses that were on the verge of foreclosure.  That whole situation was pretty annoying.  

If you find these posts useful and wish to offer monetary reciprocation I would gladly accept paypal donations or amazon.com gift certificates.  Even just a dollar would be nice. ;)

How to Price Your House to Sell

This post is the second post in a four part series on how to sell your home without a real estate agent.

After making your house presentable enough to be shown, you need to price it appropriately.  The main complaint real estate agents seem to have about For-Sale By Owner is that the people who are selling their home do not have a realistic expectation of what their house can sell for.  It is important to pick the correct price because if you price too high then people might be reluctant to make an offer because what they are willing to pay is so far below what you are asking that they might feel like it is a waste of time. If you price too low, then obviously you might miss out on making the most money, and also possibly make people assume that the price is too good to be true and that there must be something wrong.

The first thing to do is research what homes have been selling for, and what homes are currently being listed at, and what direction the market is headed.  A few resources available are:

• Zillow is a great source of information.  The site contains estimates of what current houses are worth, and shows you what homes have sold for recently.  While the information isn’t guaranteed to be 100% accurate, I found it to be accurate enough.  I found their z-estimate functionality to be the most helpful.
• CMA (Current Market Activity) – This is a report that real estate agents have to aid their customers in pricing and purchasing.  The self-service real estate broker we used also provided us with this report.  While it was interesting, it seemed that the comparable houses that had sold near us were sold a few months prior, and the market was rapidly going down. It seemed that a price based solely on this analysis would be too high.  
• Pretend you are a buyer.  The site that I found the most user friendly to look at houses was John L Scott.com.  They have a neighborhood function where you can select a neighborhood and it will show you all the houses for sale nearby.  Once our house was ready, and I had photographed it, I pretended I was a buyer and searched for houses in different price ranges in our neighborhood and I then compared the photographs in those listings with ours to see how I felt we compared.  

When we were picking a price it was difficult because there was lots of new construction in our area.  Those houses were bigger, but had no yards.  Our house had a yard, but was smaller.  The houses with more property were priced higher, but you could get a much larger house for significantly less.  We found a price range where our house looked very comparable to the other houses, and at 5k less ours looked noticeably better.  We decided to go with the 5k less because the market was poor, and we knew we were saving money by not having an agent thus we could afford to pass on that savings to the buyer.  

The drawback of the low price was that the people who did buy our house were looking above their price range and because the market was poor no one is going to offer full price. Thus the offer we received was well below what we were asking.  That is the one problem when researching prices is there is no information on what concessions the seller made to the buyer.  I have heard rumors that this information may become more available, but at then (and maybe now?) it was not, so it is hard to say what is fair, or not.  

As a side note when we were buying, the agent we were working with was not happy with the fact we were not using an agent to sell.  Her number one concern was that our house was not priced appropriately.  She briefly ran a CMA and from the results it seemed that we had priced our home too high, BUT she did not know the neighborhood or area we lived in.  The houses she was comparing ours to were not in our specific neighborhood, which was known to be nicer, and some were in a neighborhood that were right next to a garbage dump (which was not noted on the report).  Which demonstrates the fact that if you do work with an agent, it is important to find one who knows the specific area very well.

If you find these posts useful and wish to offer monetary reciprocation I would gladly accept paypal donations or amazon.com gift certificates.  Even just a dollar would be nice. ;)

How To Stage Your Home To Sell

This post is the first in a four part series on how to sell your home without a real estate agent.

First impressions are very important when selling a home. A potential buyer will probably be in your home for about 5 – 10 minutes and while they won’t be able to specifically detect “defects” their subconscious will notice them and will cause them to either love your house or not. Staging your home for viewing can add value to your home, and in a poor market, be the difference between selling it or not. Most of the things involved in staging your home are not that expensive, but may take a bit of work. You will want to prioritize time and money spent versus impact. I checked the book 301 Simple Things You Can Do to Sell Your Home. It was a bit repetitive but the information seemed sound.

 Here are the things we did:

Removed half the contents of our house: We packed up and/or donated tons of things. We packed up almost all knick-knacks and cleared the counters in the kitchen of all appliances. We removed about five pieces of furniture. We stored the stuff we didn’t get rid of at our parent’s house, or in our garage (neatly). The goal was to have no clutter, and spacious walkways. Cupboards and closets needed to look like there was extra space in them, not stuffed to capacity. We cleared everything off all the kitchen counters.  No toaster, no coffee maker, etc.  Overall this makes the house look larger and more spacious.

Paint: Painting the entire house inside and out was a highly recommended task in everything I read. It claimed to be the cheapest way to improve the look of your house. It may be inexpensive, but it is very time consuming. Instead we scrubbed every single wall in our house and touched up every single chink and dent. This helped dramatically and basically looked like we had completely repainted. On the outside we did the same thing. We power washed the siding and touched up the areas that were fading.

Made repairs: We went around the house and fixed or replaced everything that was broken. This included replacing the faucet in one bathroom, oiling the hinges on all the doors, replacing the towel rack in the bathroom, replacing the laundry door that had a hole in it, replacing blinds that had broken. We also replaced the roof. This was the most expensive thing we did to prepare our home to sell. The roof was old and though it looked good from the street, when you walked on it we figured it probably would not pass inspection, so we decided to deal with it up front and not wait till negotiations with a buyer. Our carpets were in poor shape as well, but we decided to not replace them because we could make them look okay by cleaning them, and flooring might be something a buyer would want to choose themselves.

Yard work: We weeded, trimmed all the bushes, fertilized the grass, trimmed edges of the grass, put in fresh bark, power washed the driveway and basically made the yard look perfect.

Cleaning: We made everything spotless, which was hard to do with two small children. We hired a cleaning lady to do 6 hours of cleaning. 

Decorating: We took down all family pictures and put up generic pictures. Supposedly people have a hard time imagining themselves in the home if they see evidence that it is someone else’s. Some of the pictures we used were pictures of animals I took at the zoo, others were things we bought at Goodwill. We hung up some curtains where we didn’t have any before. When the house was going to be shown, we turned on all the lights, and opened all the curtains so it would be bright and inviting. The house we bought had soft elevator music playing when we viewed it.

Here are some pictures to show how it looked.

If you find these posts useful and wish to offer monetary reciprocation I would gladly accept paypal donations or amazon.com gift certificates.  Even just a dollar would be nice. ;)

How to Sell Your Home By Owner

We sold our house last year with a self service realty agent and when I was looking for information on how it worked, or how to sell by owner, I couldn’t find much that wasn’t marketing material of some sort.  I wanted a first hand account of someone who did it, so I am finally getting around to writing one. I will publish a four part series on how to sell your house.  The topics will include:

• How to Stage Your Home To Sell
• How to Price Your Home To Sell
• How to Use a Self Service Realty Service
• For-Sale-By-Owner Paperwork

Most of what I will write is applicable to people selling with an agent, or selling completely by owner, as well. I am not in the real-estate business in any way shape or form. What I write is based only on my MINIMAL experience and research. For more information about selling by owner I got the book, Sell It by Owner and Save. The book wasn’t spectacular, but it was useful.

If you find these posts useful and wish to offer monetary reciprocation I would gladly accept paypal donations or amazon.com gift certificates.  Even just a dollar would be nice. ;)