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I am looking for detailed steps in how you would go about selling and
buying homes and/or property on a private basis. Right from the best
ways
to advertise the property or home, contacting a lawyer, submitting
offer sheets, to finally closing the deal, and everything inbetween.
If someone has gone about
this proceedure before, I would love to hear the full story. As I said
I am looking for detailed information. Thank youIn which country ?Hello, your question is a good one with several parts, which I'll go
through in the order you give them. Note that I expect you'll have
areas for clarification, so you should consider this a first
installment, and I'll gladly follow up once you read the main text
that follows. I have some experience having bought and sold several
houses, including two where the sale was done privately. These
comments are applicable to the United States in general, but laws and
conditions vary so much from place to place, some adustment might be
needed.
The first point is something I've had to assume, that "privately" in
this instance means not through a realtor, but directly negotiated
between buyer and seller. The advantage of this is often speed and
even friendliness, but mostly it is financial, avoiding a commission
of between 4 and 8 percent in most areas. To be sure, all real estate
sales are never completely private, even where property is given
between family members. Deed transfers and mortgage commitments are by
law a part of the public fact in County or Parish records, for many
reasons including tax assessments.
Good sources: One terrific resource, because it applies to your
situation so well, is the "For Sale By Owner" web pages and booklets.
You may even find one in your local grocery store by the exit. On
line, I will mention just three of the biggest, but a Google search
will turn up many more.
http://www.forsalebyowner.com/
http://www.fsbo.com/
http://www.4salebyowner.com/
Books: I haven't read these, but just wanted to remind you of all the
books that have been written on the subject.
How to Sell Your Own Home: The Practical Homeowner's Guide to Selling
by Owner, by William F. Supple. Picket Fence Productions. (1996) This
gets good reviews on the Amazone site.
Dress Your House for Success, by Martha Webb and Sarah Parsons
Zackheim.
Crown Publishers (1997) Also gets good Amazone reviews.
House Selling For Dummies by Ray Brown and Eric Tyson. John Wiley &
Sons (2002) This is from the famous and respected series, and is the
most recent.
The first rule is, the more you can do, the greater your odds of
selling.
Advertising: Beyond listing in the For-Sale-By-Owner outlets, the best
place to list is in the newspaper, and usually the best newspaper is
the largest one in your area. The reason for this is the simple fact
it reaches the largest audience and that any specific home or property
sale ultimately appeals to just a few actual prospective buyers, or
possibly just one or two, and so you need to cast a wide net. If you
live in an area that is home to even a small population of outsiders
with weekend or seasonal homes, think about advertising in a newspaper
that is home to those people.
For example, if you had a property in Southern New Hampshire, you
would advertise in a newspaper there, and probably in a Boston paper
as well. The Boston readers will have a higher price point they can
afford, and may act more quickly in areas they don't fully know the
way a local will.
If you give me an idea of the kind of property or properties you have
in mind, I can help with the kinds of keywords you want to include to
make the property attractive. But in a general sense, you want to keep
descriptions clear, fairly short (less is more), and keyed into the
qualities that make the property different from other properties, the
unique aspects.
Signs: Remember that local traffic will see a For Sale sign on the
property...a professional looking sign with a contact phone number
easy to read. Realtors will profess that a sign greatly increases
calls--sometimes from curious neighbors, but often from people who
like the area and were hunting for places for sale.
Presenting the property: Houses and commercial buildings should be
spotless, in excellent repair, uncluttered, and if possible freshly
painted. Appearances and first impressions are enormously important.
If a house is still lived in, it should be neutralized as much as
possible--it can feel lived in and homey, but not strange or overly
idiosyncratic. Someone has to picture living there. Strange as it
seems, a property for sale has to be much nicer than it ever normally
is when lived in, which ironically might make some people wonder why
you are selling it, since it suddenly looks so nice. The trick of
baking some apple pie or freshening up with furniture polish can truly
help, if not overdone. There's nothing dishonest about making a place
look and feel (and smell) its best.
Lawyers: Most real estate transactions are routine for lawyers, and
any lawyer who lists real estate as one of their specialities in the
phone book will know the ins and outs. It is a regulated industry with
certain standards of disclosure required all around, reinforced by
bank inspectors and insurance companies, who want to secure their
stake in the property. So choosing a lawyer might actually depend on
easy access to their office, and price. Call and ask what their fee is
and if they do real estate transactions routinely. Another way to find
a lawyer is to call a real estate office and ask for suggestions.
Realtors can't afford to get stuck with lame lawyers, and will know.
Telephone contacts: This is hard, but if there is any way to always
answer the phone, do it. Answering machines will put off even many
interested buyers. People want questions answered right away. If you
have a machine, by all means mention in the message that the
house/land is for sale, and try to say when you'll return the call.
Open houses: I've had many realtors tell me that open houses don't
always make much of a difference, but I suspect that's so they don't
have to tie up their weekends. Because in truth, the more you can do
the better. Open houses are useful ways to compress visits into a
single time frame, and when busy, they give a sense that the house is
possibly going to go quickly, that other buyers might be there right
at that moment. We sold our house because of a busy open house.
Offer sheets: A lawyer will be able to provide a basic form for buyers
to make offers. These will vary by location and by state, and the
amount of deposit and whether it will be held in escrow (and by whom)
will also vary. But the idea is the same: buyers suggest a price, with
any stipulations, and they offer some cold cash to make their offer
sincere. The lawyer will have the proper sheets for any contingencies,
such as water tests, building inspections, and so on, and these will
be routine for them. Once you reach this point in a sale, you will be
going through the lawyer to the buyers rather than directly, just to
avoid unnecessary tensions.
Inspectors etc.: Finding people to do water tests, pest inspections,
and so on is usually easiest, again, through a realtor's office. Most
even have sheets with the names and numbers of people they have come
to depend on. If this is uncomfortable or difficult, the phone book is
a natural place to look. The For-Sale-By-Owner booklets often have ads
by area specialists, and even real estate brochures by established
realtors might have similar ads.
Negotiating and setting price: Have a feel for what other houses and
properties are going for. There is no substitute for this first hand
knowledge, unless you pay for an appraisal (or go the tricky route of
having a realtor look it over and give their opinion, and then go
ahead without them). Read ads, look at other houses, compare to
similar properties in similar areas. Even though you are trying to
avoid using a realtor, if you can find one willing to help with this
step, take them up on it. Most realtors can search their database for
houses that have recently sold in various categories and price ranges,
and you can learn quickly what the market is capapble of. In general,
realtors push starting prices high to begin with, and this is probably
good advice. The idea is to give room to both 1) compromise on an
offer as a negotiating tool and 2) lower the asking price gradually if
no offers come in. It's quick and easy to lower the price, and nearly
impossible to raise it.
Competing bids: Increasingly common in some areas, and an important
point to maximize seling price. When a bid comes in, hold it for as
many days as you can (there is usually an expected limit of 3 days,
possibly 5). Don't eagerly accept a good offer. This gives time for
other offers to arrive, and those later offers will be made knowing
that a previous offer is pending. This creates an auction-like
competition. If a higher bid comes in, the first bidder can be told
this and time given for a counter offer.
Creating a bidding war: One strategy used by a house I actually bid on
was to create a cutoff date two weeks after holding an open house.
Everyone was told that bids would be accepted up to the point, and
that the highest bid, or the best bid (in case there were conditions
or contingencies to compare) would be accepted then. Deposits were
taken from all bidders and returned by certified mail to losing
bidders. This automatically makes buyers bid as high as they can right
away, since there is no back and forth negotiation afterwards.
Prequalification letter: For some reason, people going it alone have a
harder time with buyers making offers when they don't have the
finances to back it up, and the deal falls through. It will not put
people off to ask them for a letter of prequalification from a bank.
This is a normal step, and many realtors insist on it. You should,
too. Real estate contracts always have the escape that all is refunded
and nullified if a buyer's finances are not approved. This is not
always avoidable, but asking a buyer for some proof of their ability
to pay is good sense. You might ask, as well, where they work, what
they do, that sort of thing, to get a sense of their likelihood of
finding a willing bank.
Closing: This is the same as through a realtor except they won't be
part of the closing, and there is one less check to write. The usual
tax and utilities adjustments will be calculated by the lawyer. Title
searches and lawyer fees are likewise the usual.
This is a summary, and (as I said) a starting point. I think the
aspects you ask originally about, specifically selling/buying
privately, belong mostly to the first phases of the process, before an
offer is accepted. After that, the procedure will resemble most other
real estate transactions.
Additional Links:
This was a broadly comprehensive site about this same subject:
http://content.realestateabc.com/homeselling/
This site had similar advice but has a handy way to order real estate
forms--just be careful that they will be appropriate for your state
and county:
http://www.audrie.com/
The US Government is always a good source for thoughtful advice and
links:
http://www.hud.gov/selling/index.cfm
Search Strategy:
Mostly based on my experience but also searched these terms:
For Sale By Owner
Home Selling Advice
Home Selling US Gov
Well, that's a start!
This is a summary, and (as I said). I think the aspects you ask
originally about, specifically selling/buying privately, belong mostly
to the first phases of the process, before an offer is accepted. After
that, the procedure will resemble most other real estate transactions.
Let me know what clarifications you would like. It's a big and diverse
process, and some specific questions will surely arise that I can't
anticipate. Thanks.CanadaHello again,
The principals of buying or selling a home apply in Canada in the same
way they do in the US, or course. I've gone through my answer looking
for any additions that you really need, and I've added them below.
I've also come up with a couple additional points that are good in
general, such as the value (or note) of web advertising.
In searching for Canada-specific for sale by owner sites I come up
with these as just starters. Remember that these are given because
they all have advice and tips that will parallel my own. Once you get
going you'll find they are all relatively similar.
For Sale By Owner.ca is a nicely laid out web site for sellers:
http://www.fsbo.ca/
For Sale By Owner Canada is similar:
http://www.forsalebyownercanada.com/
House Web is another for sale by owner site, and has a special
commercial property section:
http://www.houseweb.ca/
Home Sell Canada has slightly different examples and tips:
http://www.homesellcanada.com/
These do bring up the fact that actually selling through the For Sale
By Owner in your area is yet another way to go. I didn't think of this
as quite as "private" a selling method, but it does remove the
variable of the outside realtor. And it has the tremendous advantage
of offering not only support materials, but listing on the web. In a
way, these are becoming sort of cooperative real estate agencies, and
they make their money in fees, which are rather small, rather than
percentage commissions.
I searched the indexes and user comments of about 12 books on selling
a house without a realtor, including the ones mentioned, and there is
never a separate comment or index listing for Canada. The comments and
strategies are simply the same in both countries. The particular legal
and regulatory differences are again something you let your lawyer
worry about (ask him or her a lot of questions, they should be glad to
help).
Because a lawyer is so essential, no matter where you are buying and
selling, here is a page that should be useful, giving advice and links
for finding a lawyer in Canada:
The Law Society of Upper Canada
http://www.lsuc.on.ca/public/lawyers_finding_en.jsp
To help with questions about buying, selling, and keeping up with a
house:
Canada Online: Homes in Canada (gives general home ownership tips):
http://canadaonline.about.com/cs/homes/
Finally, I found this general site on Canada real estate sales:
Real Estate Listings: Canada (has many links)
http://www.real-estatelistings.com/links/canada.html
Further general information as an addition to the first answer.
Handouts: This is an important addition to an open house, or to an
individual house visit. At the very least, you need to list the facts
about the house honestly but in a positive light. Give square footage,
number of rooms and what kind of rooms they are (mentioning closets),
whether there is a garage or other outbuildings, and the size of the
land. For land in particular, describe its boundaries, its frontage on
roads or waterways of any kind, and describe its general nature
(forested, hilly, wetland, etc.)
Give estimated annual taxes (all of them), utility costs (look at old
bills, or you can in some areas call your provider and ask for an
annual total). Also give helpful information like the age of the
house, the size of the fuse or circuit breaker box (in amps), the type
and age of the heating/cooling system, whether it has septic or
municipal sewage hookup, and so on. Finally, mention its special
features: hardwood floors, built in dishwasher, utility room features,
central vacuum, high ceilings, quality of windows (if newer), and so
on. Whatever makes the house more desireable. Things to remind them of
on paper when they drive away.
Web sales: The For Sale By Owner sites offer a way to get a house
listed on the web, including photographs. Posting your own web site,
even a simple one with pictures, is also a good idea, though not all
buyers will search for houses this way. If you are appealing to out of
town buyers (which I mentioned in the first part to this answer) you
might find a web site more useful, since they will likely be doing
some looking remotely.
Photographs: This is most pertinent if you are listing on the web
somehow (FSBO or your own site) and if you are having a listing in a
FSBO flyer. But it will also come in handing if you want to attach
them to your handout, or use your computer to incorporate an image or
images onto the sheet. In any case, you need to pick one or more
excellent pictures. Exterior shots should show the house well, in good
light, without obstructions, and hopefully in a good season. Interior
shots need to be done with some care--snapshots using flash will
probably not help your case, because they will make a room look harsh
and unattractive, even if the picture provides some information. The
photos are not as much about fact as about feeling, the aura of the
house. Shoot without flash, use a tripod if necessary, and wait for
times of day with the light comes nicely through the windows. Clean
and tidy it up as if having an open house, so it looks showroom
perfect.
Additional Search Strategy:
For Sale By Owner Canada
Sales House Law Canada
Sales Land Law Canada
I still anticipate you will have more questions that will help me fill
in the gaps. This is a huge subject...that's why so many books have
been written, and I am giving necessarily brief guidelines, of course.
But I hope one or more of the books will give the same information in
more detail. And I think the many links and sources I give will be
useful. But if there is some personal experience I can add, just ask!#If you have any other info about this subject , Please add it free.# |
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