Friday, January 12, 2018

ARE YOU UP FOR THE ULTIMATE DO IT YOURSELF CHALLENGE?

 NOW IS THE TIME TO GET READY FOR YOUR ULTIMATE DIY PROJECT- SELL YOUR OWN HOME!



There is an old saying in the real estate world that "Only an idiot would try to sell their own home"-NOT TRUE!!. Times are changing and the need for a real estate agent is no longer necessary. With the introduction of the internet combined with more Do-It-Yourself folks like you, selling your own home has become more of the norm than an agent would like you to think. Websites like Trulia and Zillow have changed how we look at selling real estate. They have the ability to determine price, list for sale by owner properties, and to determine values based on historical records (although they are often not accurate, I will explain later in this blog).

Helping folks like you is the very reason I entered the real estate business world.  After retiring from a 20 year active management position to Sedona, Arizona, I quickly realized that there were only three things to do there- Eat out, play golf, or sell real estate. I gravitated to real estate, signed up for the class and passed my exam in two weeks. My first experience was selling a 1.2 million dollar home, I was hooked. We then moved to Redding, California  where I obtained my first Broker's License. The extreme heat that Redding had to offer was more than we wanted to endure so we started looking for our forever retirement spot. Coeur D'Alene, Idaho had everything we wanted in a retirement spot, lakes, forests, four distinct seasons, moderate temperatures, close proximity travel to Canada, Montana, and Washington. Here I obtained my second Broker's License. Now fully retired I once again became bored and started this blog to offer my experiences and knowledge to anyone that wanted to complete the ULTIMATE DIY PROJECT, SELLING YOUR HOME AS A FOR SALE BY OWNER. 

You are probably wondering why I am offering my broker knowledge and experience to homeowners instead of real estate agents. There are several reasons for this, first the commission you pay is the equity that you worked so hard to build into your home, secondly the commission is truly not negotiable as required by contract real estate law in almost all states. Brokers will generally not allow an agent to negotiate away their profits. Third, you will never see a contract written that places a variable commission rate based on time spent, effort put forth, and marketing costs. Now if you were to pay for services rendered, time spent, and actual marketing costs, then and only then would paying an agent make sense. Last, even if you hired an agent to sell your house, you will still have to spend your money preparing your home for sale, stage the house for showings, and comprehend the contract that you will sign. You are going to be doing most of the work anyway, WHY GIVE UP YOUR EQUITY TOO!!

Now that you know who I am and why I am writing this blog, let's get down to some info sharing. The most important step to take first is to determine if selling right now is the right thing to do. Setting aside the immediate need to sell because of job change, personal relationships, or financial stress, you need to take the steps necessary to make this very important change one of profit. Getting to a realistic Market Value can be a little tricky, but is essential in making the decision to sell. Never try to sell your home for what you think it is worth, but sell it for what a reasonable person would pay for your home, that is what market value is all about. First, you will need to gather some data to be used to get to a value. You will need to use comparable homes to yours, they must be similar in size, number of bed and baths, have similar rooms such as living rooms, kitchen style, and garage stalls. find at least 4-6 homes that are currently for sale in your immediate area (try not to use homes out of your area), 3-5 homes that are in a pending sale stage, and 4-6 homes that have sold recently, (within the last 6 months).

Most of this data can be gathered by going online and looking at the local MLS, which usually can be accessed by going to the local real estate association website. Sold properties are the most difficult to get for two reasons; the MLS will only generate sold properties to its Multiple Listing Service members, county records seldom show the actual selling prices for valuation, but show their own outdated tax valuation. If you know of some recent properties that sold in your area, go to the Zillow or Trulia websites, type in the address and it should show the sold price. Although there are formulas for computing this data, you can average each category and using your instinct and gut feeling to determine a value. There is a one way to get an exact Market Value and that would be to pay for an appraisal. This would not only be the best method, but doing so will give you the leverage you need in negotiating the sale to an interested buyer. Seldom does a buyer question the validity of a reputable appraisal.   

Let's decide if you should sell or not. Looking at the Market Value, subtract the balance on all mortgages including early pay off fees. Next call a title company and get an estimate for title insurance based on the asking price, escrow fees, unpaid taxes that will need to be adjusted in escrow, and the expected costs of any repairs determined by you when you take a hard look at your property as if you were the buyer. Subtract all these costs and fees from your gross profit to determine your net profit from the sale. If after you get to your net profit (basically cash in hand), will this be enough to purchase your next home? If not, maybe selling under any circumstance should not happen yet. But if you are happy with the net results and can purchase your next home let's start this FOR SALE BY OWNER DIY PROJECT

My plan is to write a new blog at least every week to prepare you for the upcoming March Start to the 2018 selling season. If you have any questions or want a specific question answered just email me at fsboanswerman@gmail.com or make a comment on this page.

Thanks for reading my very first blog.

Roger,
the FSBOANSWERMAN