Wednesday, January 31, 2018

THE PROPER WAY TO DO HOUSE SHOWINGS - PROTECT YOURSELF AND MAKE THE DEAL

 SUCCESS WITH ALL DIY PROJECTS COMES WITH FOLLOWING THE PLAN
AND PUTTING SAFETY FIRST!!

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The statement above says it all. If you follow your plan to sell your house as a For Sale by Owner, complete the plan of preparing the home for sale, getting a buyer interested in putting in an offer by showing your house, and negotiating the sale, these come with some risks that can be avoided by placing your safety in focus during the process. The principles of being safe that are used by real estate agents apply to you as a homeowner as well. The showing process is part of the business transaction of selling and not a social or bragging event. The suggestions that follow are common sense ideas that will create a safe and professional environment while you get to the finish line of the selling process.

Just because you have a for sale sign in your front yard does not mean that your house is available to show right now. It is imperative that you place "By Appointment Only" on all your advertising. There is a saying that "Buyers are Liars" in this industry, because some buyers will tell you anything to get to see a home, even lie as to whether or not they can afford the home, or if they are  truly ready to buy, or anything else in order to satisfy their curiosity about the inside of the house. You can avoid the curiosity seekers by asking them questions on the phone prior to allowing them into your house. Here's a list of questions you should ask before setting up that showing appointment:

          1. Are you looking to buy now or in the near future?
             (This might reveal their need to buy right away)

          2. Are you represented by a real estate agent?
             (If they are, you will need to determine if you are willing to 
              pay a commission to the buyer's agent, this sort of defeats 
              the reason you are selling as a For Sale By Owner.)

          3. If they are unsure about that representation, then ask
              Have you signed an agency agreement with an agent?   
              (If they have not, you should be Ok in setting up a showing.)

          4. Are you Pre-Qualified by a Lender or Bank or will this be cash?
             (If they are pre-qualified, ask them to bring it with them just in
              case they like the home and wish to put in an offer. Being positive 
              about a potential sale indicates to the buyer that you have something                 worth writing an offer for.) 

          5. When you are satisfied with the answers, and your gut feels good                       about the way they responded, your next question should be:
              What day and time would you like to see my home?
              (Remember to allow yourself enough time to stage the home and set                  up your security for the showing.)   

You feel good about the upcoming showing, so let's get it ready and set up some security measures that will ensure that it goes well and safely. The first thing to do is hide all valuables, medicines, and heirlooms in a safe place. I have often told my clients to purchase a decent sized flat tote box with a snap-lock lid and put all these items into it and place it under the master bed. This way you can keep them safe and have access to them between showings without having to constantly gather and hide these items. The large tote is hard to steal by itself and awkward for a thief to manipulate while the showing is going on. This is just a precautionary measure and is not to assume all buyers are thieves, most are not interested in your stuff.

Make sure the home is back to its staged look and do a walk thru for your own peace of mind knowing that everything is ready. This will give you the confidence you need in showing your own home. After a couple of showings, you will know what to expect a buyer to ask about, and you will be better prepared to answer their questions. It is unusual for the first showing to become the new homeowner, but it can happen. As a matter of fact, our last home that the wife and I recently sold, the first showing was our buyer, they made a full price cash offer. That deal was done within 24 hrs. By the way, our home was decluttered and staged to sell, our market price was right on, and the buyers indicated they were ready to buy now and they were paying cash, however they needed to close on two other homes to have the cash. We were willing to wait after we contacted their agent and he said that he felt confident that both of their houses would close in our time frame.  We were prepared to sell, but feel that we were extremely lucky that our buyers were prepared to buy as well.

Let's hope that you are as lucky as we were and your first showing will be your first buyer, however, let's assume that you will need more showings. Whenever you have a showing you have to place your personal safety above the need to show. There are steps that you can take minimize your risks. First, never have a showing one on one with a  lone buyer. Make a commitment that you will not show your home by yourself and that you will have a spouse or friend at the home with you. You can ask the buyer to bring another person to the showing to provide moral support and give a second opinion. Again, never show one on one. Next, let someone that lives close to you know when you are having a showing and ask if they would call you after a reasonable amount of time to make sure the showing went safely. If they don't hear from you, then they should check on you or call someone to check up on you.  Even better, ask them to be present, but silent during the showing. Their opinion would be considered bias and not supportive of the buyer.

What if a real estate agent calls and says, my buyer saw your sign and wants to see your house. His next comment will be this question: "Are you willing to pay a commission to a buyers agent?"  What you say next will determine if he will bring out a potential buyer. If you say you will pay a commission, then expect it to be half of what you would have paid to a selling agent. In simple terms, you can expect to pay 3% of the selling price to the buyer's agent. You have to be prepared to answer that question, however, you can ask similar questions to the agent like, do they need to list and sell a home first, are they pre-qualified, are they ready to buy now. These answers will help you decide if you want to show them the home. What if the buyers show up and want to deal without the agent involved. They can deal with you without an agent, but it will put the buyers at risk of a lawsuit by the agent and broker for violating their agency agreement, if there is one. You as the seller will not be bound by any agreement that the buyers previously entered into, only the buyer will be at risk. That is why you need to ask that question when you talk to a potential buyer, they need to understand the risk of violating that agreement. To protect yourself, never get into a conversation that you would suggest they violate that agreement and you would reduce the selling price instead of paying the commission. This is a definite path to a lawsuit involving you. Keep it clean and honest!  
After all is said and done, the majority of home showings go easily and are safe.
I am not trying to scare you, but being prepared is better than being sorry.
Speaking of being prepared, there are a couple of things you need to have available during the showing. First, as you are decluttering, grab all the appliance and utility manuals that you possess and put them in a three-ring binder individually in plastic sleeves. Now contact your gas and electric utilities for a month by month yearly usage, put that in the same binder. Next, put a recent property tax statement in the same binder. What you are building with this binder is a property binder that stays with the home and can help answer all the questions about utilities, appliances, heaters and a/c units in one simple to look at location. I always got creative and put a printed picture of the house on the binder cover, used tab sheets to identify the pertinent sections, and provided a list of area attractions in the book.  Again, get creative with this project,  the items in the book could make the deal happen. Place the binder in a conspicuous spot. Remember you are the one selling the home, you would be providing that information to a buyers agent if they had one.

The next thing that you will need on hand is a set of legal documents that would include a Purchase Agreement, Seller's Disclosure form, Lead Paint Disclosure form, and any addendum. Sounds complicated, but actually the only form that is a little difficult will be the purchase contract, the others are a very easy to understand and complete.  Every time you entertain an offer all these forms will need to be used. The purchase agreement will need to be completed at the time of sale, however the sellers disclosure and lead paint disclosure can be pre-filled, copied, then signed at the time of the sale. Addendum's come after the sale. If you have a good printer, plan on making copies of the blank purchase agreement, and filled out but not signed other documents. There are probably several companies that you can order these forms from, however, I recommend USLegalForms.com as a reliable source of accurate forms to use. You can view these forms by clicking this link  http://www.uslegalforms.com/index.html?auslf=fsrl2018. Then type in "Real Estate" in the search button. It is important to identify the state you are selling in, each state has different requirements. Basically, they are the same with special nuances unique to that state. In almost every state you will need to provide copies to the buyer at the time of sale. Having a good reliable copier/printer is essential for this process to go smoothly.

Some states require that you use a real estate attorney to complete the real estate forms and then send them to an escrow company. You can always use a real estate attorney in completing the forms, but this could get complicated as most buyers don't want the same attorney that the sellers use. I am not an attorney nor am I giving legal advice, but this type of service is available in every state. Do your own investigation as to whether or not you need attorney
services.  

In the next blog post, I will provide as much information on completing the forms as I can without giving any legal advice. Again, these forms are not as complicated as they appear and in most cases they can be easily filled out. This was always the tedious part of selling real estate, but usually meant we were close to the end of the process. Future posts will include information about escrows, title commitments, and escrow closings- what to expect and what to do. 

Here's hoping this information helps and I am looking forward to your comments and email questions. Email your questions to fsboanswerman@gmail.com or comment below.

Roger
The For Sale By Owner Answerman
(The fsboanswerman)