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For Sale by Owner – FSBO

Feb 1

Posted by admin in Real Estate FSBO

On the positive side :

Selling a home will save you literally thousands of dollars in real estate commissions. You are in control of the sale process from deciding when to show and where to advertise. Since it is your home you will be motivated to make it a priority.

On the negative side :

You will need to make a commitment in time and energy plus be willing to embark on a fairly rigorous learning curve. Selling is just that..dealing with potential buyers and working to close the sale. Closings too require an expertise in taking certain steps to get the paper work and legalities straight.

If you have the time and the willingness to learn a few basics and realistically believe you are up to the challenge, then you can essentially earn that big fat fee for yourself and smile all the way to the bank.

Do You Need to Give A Property Disclosure? Your state law may require that you give potential buyers one or more property disclosures? Disclosures deal with the condition of the property or facts about its location. Don’t assume that disclosures are only necessary for homes listed with real estate agents, because most for sale by owner sellers must usually furnish them, too. Even if a formal disclosure isn’t mandatory, you are probably required by law to tell your buyers about known problems, often referred to as material facts. Learn your obligations by contacting the agency that oversees real estate sales in your state. Many offer disclosure forms online Lead Paint? If your house was built prior to 1978, federal law requires that you disclose that the home could contain lead based paint and give buyers details about past tests for lead paints. You must also offer buyers the opportunity to do their own lead paint testing. Most people don’t perform the tests, but you must furnish them with a lead paint pamphlet, which is available free online from the EPA.

Can the Buyer Really Buy?
A good real estate agent verifies a buyer’s pre-approval status before he shows them property. When you sell by owner you’ll deal with many people, including those who are qualified to buy a home and those who don’t have a chance of getting a home financed.

People who know they cannot buy sometimes think that for sale by owner homes offer a better opportunity, because they’re hoping to find a seller who will finance the transaction.

Contract Forms
Who will provide the contract forms that will be used for an offer to purchase your house, you or the buyer? You can write a contract yourself on a piece of paper, but it probably wouldn’t offer much protection for either your or your buyer. The forms you use should be valid for your state’s real estae laws and cover issues that are important for your location.

If you aren’t contract savvy, have a real estate attorney review any offer before you sign it. Don’t cut corners, neglecting to get advice from an attorney or other knowledgeable person will cost you money, not save it.

The Buyer’s Deposit
The contract should spell out what happens to the buyer’s deposit money if the deal falls through:
? Under what conditions would the buyer get it back? (unable to get financing etc.)
? Under what conditions would you expect to keep it? (buyer backs out for no good reason)
The deposit money is NOT yours until the house sells or the buyer breaks the contract. It must be credited to the buyer’s funds on closing day and ideally should be held in someone’s trust account until then.

Bottom Line
Real estate laws and customs differ in nearly every state in the US, so it’s essential that you do some research on a state and local level to be sure you are complying with all laws associated with the sale of your home.

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Promoting Your Home Effectively When Selling By Owner

Oct 10

Posted by admin in Real Estate

By selling your home on your own you are known in the real estate world as a \”FSBO\” or \”For Sale By Owner\”. Some buyers specifically look for FSBO listings because they assume they can deduct a standard real estate professionals fees from the price of the home so they tend to make lower offers. Others believe that FSBO homes are easier to deal with than trained real estate professionals. Obviously, neither case is always true but it happens enough to be aware of it.

Your advertising is what drives potential buyers to first, become aware of your home, second, to gain interest, and finally, to make an offer for your home. It is only reasonable to assume that the more interested buyers you have the higher selling price you can expect.

In this era of highly accessible information there are many options available to you as a seller of real estate. As in any project you undertake, it would be wise to sit down and think out a strategy before spending any money, in order to avoid wasting money on ineffective promotional tools. Some questions you might ask yourself are the following:

  1. How much time do I have to sell my property?

  2. How much cash do I have to spend on advertising?

  3. How many buyer leads do I expect, per dollar spent on advertising?

  4. How much time do I have to devote to advertising daily and weekly?

    5. After assessing your personal situation you will be better prepared to develop your promotional strategy. There are several advertising options out there, some more expensive than others and some deliver more leads than others. It\’s reasonable to assume that the most valuable advertising resources are those that deliver the most leads to you for the least amount of money. Some of the most popular and effective methods follow.

    • Posting an ad in the local newspaper

    • Conducting an open house

    • Distributing flyers around the neighborhood

    • Posting a yard sign in front of your house

    • Posting an ad on an internet real estate website (or on multiple sites)

      • Naturally, there are no guarantees that you will get attention by merely participating in the above promotional methods, because a lot depends on your ad copy, the presentation of information, and your asking price. Buyers simply won\’t contact you if your price is too high. However, the right combination is essential to selling real estate by owner successfully.

      Once you have decided where and how to advertise, you\’ll need to write your ad copy and organize facts about your property. Following are a few tips on writing your ad.

      Writing your ad
      Keep in mind that many people seek out FSBO properties when you write your ad. Be sure to take advantage of this by making it clear you are selling by owner.

      Here is a list of things to do when writing your ad:

      • Do indicate you are selling by owner

      • Do indicate you have a complete property listing on the internet, and where it can be found

      • Do describe the structure, style, and number of bedrooms and bathrooms

      • Do describe the neighborhood

      • Do list the sales price

      • Do highlight any special features your home may have, such as a pool, hot tub, fenced yard, etc.

      • Do include your phone numbers and email and indicate the best time to reach you (if by phone)

        • By not including the property address in your advertisement, you encourage potential buyers to call for more information, which gives you an opportunity to set up an appointment to show them your home.

        The author is involved in several online businesses, including FSBO3k.com, one of the leading for sale by owner websites in the United States.

        Writen By : Nate Garin

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        Home Owners In Trouble! The Real Estate Bubble, Rising Interest, And Variable Rate Loans Concern Fed

        Oct 10

        Posted by admin in Real Estate

        Hurricane Katrina, floods, earthquakes, rising fuel prices, shrinking
        pocketbooks, and now, concerns over variable interest rate loans, are
        discussions heard throughout the nation.

        With mounting concerns by the Fed over rising inflation, there is a
        serious push to increase the current rates of interest. This may
        help to curb inflation, but will also have a devastating effect for millions of homeowners who are tied to variable interest rate, and interest only, loans. As rates go up, so do most underlying mortgage payments, placing an even greater stress on those who want, or need to
        sell their property.

        Many home owners are beginning to find themselves in an ?upside
        down? sales position. In other words, decreasing home values in some
        areas of the country are already leaving owners in the dire position of
        owing more on their property than the current market price will bring. In
        addition, rising mortgage payments coupled with slower real estate
        sales, are forcing more owners into foreclosure, and in some cases
        bankruptcy, which is currently on the rise and heading toward one of the
        highest levels in U.S. history.

        In an effort to curb this combination of economic pressures, and for
        saving equity wealth positions, many homeowners are now resorting to
        selling their property as a, For Sale By Owner. In doing so, they are
        saving large portions of equity profit that would otherwise be paid out as a real estate commission.

        What many owners have discovered is that a 6% rate on a $200,000
        home is in fact, $12,000. If their equity wealth position is $24,000 on
        their property, then they have effectively paid 50% of their profit to a real estate broker, not 6%! This financial inequity is created because the 6% commission is being charged on the gross price rather than on the net proceeds from the sale.

        Add to this, the standard 2 1/2%-3% normal closing costs for each
        transaction, also calculated on the gross price, and again, a home
        owner?s wealth diminishes even further! To avoid this loss, an ever-
        increasing number of owners are opting to ?do it themselves.? In an
        attempt to help homeowners succeed on their own, the following five
        basic steps are being provided as a solid foundation in the For Sale By
        Owner process:

        Step #1: Determine A Fair Market Price For The Property. This can be
        done by visiting a local Title Insurance Company and having them run
        price comparisons for ?SOLD? property (over the past two years) within a
        2-block radius. Using ?sold? prices in an immediate area will help
        establish a price/value range and establish a trend a homeowner might
        effectively use for marketing the property.

        Step #2: Connect With An Attorney and Escrow Office. One of the first
        connections to establish is with a qualified real estate attorney. This
        attorney will be used for helping guide the homeowner through the legal
        portion of the transaction and for finalizing any Offer To Purchase (also
        known as Earnest Money Agreement). The best place to start looking for
        a qualified real estate attorney is at the same Title Company used for
        researching the property value. Larger Title Companies usually have a
        full service escrow department for closing transactions. In addition, they
        can also provide a good alliance with some of the better, local real
        estate attorneys. By choosing the right Title Company in the initial
        research phase, it can prove to be a one-stop-shop for helping solve
        many of the home-selling challenges.

        Step #3: Find A Mortgage Lender. Now that the attorney and escrow
        office are lined up, a good mortgage lender will be needed for helping to
        qualify purchasers and ultimately, for financing the transaction. My
        recommendation is that at least two conventional bank lenders, and one
        or two mortgage brokers are contacted for this purpose. The reason for
        having choices is that each lender will offer different financing
        packages. It is this loan diversification, which will open a wider range of
        financing opportunities when working with buyer prospects.

        For completing these first 3 steps, the homeowner should figure on
        creating one ?Action Day? where all research and connections are
        finalized. At the end of this day, a complete sense of control and
        organization for the selling process should be accomplished.

        Step #4: Advertising and Marketing. Now that the attorney has been
        chosen (and contact has been made), a location for escrow and closing
        the transaction has been determined, and all mortgage lenders lined
        out, it is time to place the yard sign and begin advertising.

        There are many sign companies found on the Internet for purchasing a
        For Sale By Owner yard sign, and one that may be of interest is Victory
        Signs at: http://www.victorystore.com. However, for immediate service, a
        homeowner might also check out the offerings and pricing from their
        local sign shops.

        As for advertising, the most effective ad placement will be a clearly
        written classified ad stating the most unique feature of the home. This
        targeting of the ad copy will help to draw out the one most likely
        prospect that will purchase the property. When writing the ad, it should
        be kept economically viable remembering that serious house hunters
        will read all ads within in a column, whether they are promoted in bold
        type, or not! Knowing this information can help to keep your ad costs
        lower.

        The other most important real estate advertising to consider, is through
        creating a simple flyer that will be placed in a clear plastic holder
        attached to the outside yard sign. This flyer can also become an
        effective advertising tool when used as a handout at all open houses.

        From my own research, almost 60% of homebuyers actually locate their
        homes by driving the neighborhoods where they intend to live. Realtors
        have known this for years, and that is why yard signs are so heavily
        used in promoting property for sale. If signs were not effective as a
        marketing and branding vehicle, agents and brokers would resort to
        advertising only through display and classified advertising media
        channels. But they don?t! So, it quickly becomes apparent this is an
        effective means for marketing any property. And one you do not want to
        overlook.

        As a final note on this subject, make sure the flyer box on the yard sign
        is always kept full of flyers for the people who are driving the area. To
        help in creating the most professional looking sales flyers at a
        reasonable cost online, a good source to check out is: http://
        www.myfsbo.com.

        Step #5: Writing Your Offer. When initially meeting with a chosen
        attorney, the homeowner should also ask him/her how they would prefer
        the initial offer to be drawn up for a prospective purchaser? At this time,
        the attorney will also be able to provide a list of what questions need
        answering and any other legal paperwork required for state compliance.
        The attorney can also provide good initial direction for making sure
        negotiations hit the most key elements when consummating the sale.
        This initial pre-sale legwork helps to alleviate many future concerns.
        Once again, proving there is no magic formula used for selling real
        estate or for writing an Offer To Purchase. What it really boils down to is
        the intent of the seller and buyer for consummating a fair and legal
        transaction between them, and with full disclosure.

        In Summary: If you find yourself at the mercy of rising interest rates and
        variable rate payment adjustments, these five, For Sale By Owner steps,
        can help you to move beyond traditional marketing methods, potentially
        avoid foreclosure, and help save more of your equity wealth position.
        Taking these steps can also help to alleviate stress-causing unknowns
        from misinformation and lack of preparedness.

        About The Author: Greg O. Bacon, President MXMRQ? Corporation, is a
        former sales and operations manager for Coldwell Banker? Real
        Estate, and is the author of: ?Warrior Economics ? Taking Back Your
        Home Selling Profits! A Complete For Sale By Owner Program.? For
        more information regarding the author and this timely real estate
        program go to: http://www.mxmrq.com

        Writen By : Greg Bacon

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        Selling By Owner: Price Your Real Estate To Sell

        Oct 8

        Posted by admin in Real Estate

        Something held in common by all home sellers is the desire to sell in the least amount of time and for the most amount of money. To achieve that goal you must first price your house appropriately. If you price too high your house will not sell. On the other hand, if you price too low you stand to lose a considerable amount of money. Therefore it is essential that you determine the fair market value of your home.

        There are two general factors to consider when determining the sales price of your home:

          1. Your personal time schedule. If you are under pressure to sell your house quickly it may be wise to price your home slightly below fair market value to attract more potential buyers. If you enjoy the luxury of selling at your own pace then you can price your home closer to the fair market value, giving yourself time to find the right buyer.

        2. Current Market Conditions. If there are many homes for sale in your area then you may have to discount the price of your home to help it get more attention. Conversely, if there are few homes for sale in your area then you can expect a sell closer to your asking price.

        What is the fair market value of your real estate?
        There are a couple of methods by which you can arrive at a fair market value for your property on your own. In an agent-assisted real estate transaction, the agent can help you set an asking price by looking up recent comparable home sales in the local multiple listing service (MLS) database. Most likely, you do not have access to the local MLS system for this information.

        For this reason, it may be beneficial to pay for a professional appraisal of your property. Appraisers also have access to recent comparable home sales and use up to three methods of arriving at a fair market value for your home. When a buyer seeks financing to purchase your property, they will need an appraisal to establish value in the eyes of the lender. So it doesn\’t hurt to have that value established in the beginning. Showing a buyer a professional appraisal of the property can give the buyer added comfort that your asking price is reasonable.

        You can expect to pay $300-$500 for a professional appraisal. Due to the cost, many home sellers try to establish a fair value on their own. If this your preferred method, consider the following.

        What are similar homes selling for?
        Other homes that are for sale in your neighborhood are probably your best resource for determining value. Visit these houses and gather as much information as you can about the homes and then compare those homes with your home. Compare square footage, number of bedrooms, number of bathrooms, lot size, and any unique features. Seeing what similar homes are selling for will give you a good idea of a price range you can expect for your home.

        Search the Internet
        Most states require that property transfers be published in a local newspaper, so you can easily search the online archives of recent home sales in your area. You can also search real estate websites for homes that are comparable to yours to see what they are listed for, but remember, this does not give you knowledge of what the properties actually sold for.

        The author has been involved in several online real estate businesses, including FSBO3k.com – one of the leading for sale by owner websites in the United States.

        Writen By : Nate Garin

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        Buying A Home – Does Your Realtor Offer You These 7 Things?

        Apr 8

        Posted by admin in Credit, Real Estate

        Shopping for a house can be a complicated process and necessitates the use of a seasoned agent to aid you in understanding what you need to accomplish. He or she must present your buyer interests in matters such as ironing out the deal with the seller, lining up the most suited home loan, completing all forms, and clearing the home inspection so it doesn’t disclose any outstanding problems.

        An effective agent acts as your squad leader, first and foremost, he or she takes care of your best matters to while aligning other players and jobs. Your Realtor should:

        1) Advise On A Neighbourhood – Your agent should be intimate with the area to propose feasible neighborhoods that fit your desires. Optimally he or she should domicile in or close to the city you are considering and be competent enough to give you an expert viewpoint of the residential area you’re interested in.

        2) Facilitates You In Judging Market Value – A proficient agent will put put together a competitive market analysis (CMA) to forecast the value of the home you’re contemplating. The CMA is comprised of data gathered from corresponding homes that have sold in the most recent six months.

        3) Discovers A House Suitable For Your Requirements – An effective Realtor will search for properties that meets your standards and arranges to show them to you when they become purchasable. Any honourable real estate agent acknowledges this undertaking can consume up to a year and won’t press you into purchasing a home that won’t accommodate your requirements.

        4) Walks Through Properties With You – Your agent should take you around personally to look at homes. Their experienced eyes can possibly help you determine if a house suits your needs and if there are potential problems such as a leaky roof or old plumbing.

        5) Drafts The Offer And Irons Outs The Deal – Your Realtor will assist you in drafting an offer that contains your offer price and conditions. In addition, he or she will talk over all lawfully mandated disclosures concerning your potential home.

        6) Prepares You For The Entire Procedure – When you’ve picked out which Realtor to use, he or she needs to be able-bodied enough to discuss the sequence of events required to find your property, including composing the offer, applying for funding, opening up escrow with a respectable office, finding out if title is clear, acquiring an insurance policy, getting rid of contingencies, and finalizing the transaction.

        7) Organizes The Entire Procedure – Once your offer is accepted, your real estate agent will assist you through the steps expected to nail down the transaction. He or she will book property inspections, line up funding and obtain the necessary insurance policies. Nearly of these jobs will be addressed by your real estate agent or assigned to the suitable professional person. A professional real estate agent will be in attendance for significant events such as the appraisal, inspections, the last walk-through, and the conclusion of escrow. He or she will also represent your homebuying concerns in areas like talking terms with the seller, determining the most acceptable loan deal, filling out required paperwork, and establishing the home inspection discloses no significant flaws.

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        Buying A Home – 5 Tips On Finding A Home To Fit Your Lifestyle

        Mar 13

        Posted by admin in Credit, Real Estate

        Buying a home involves finding one that suits your particular lifestyle. it’s so easy to focus on your present circumstances, but it’s important to also consider what you expect life will be like in a few years from now. Let’s discuss the 5 home features that can affect your lifestyle:

        1) What’s your Dream Lifestyle? – Does the nightclub scene suite your taste? If so, you probably want a home close to the hot spots of town where you can walk home. if you’re a business traveler, you may want to consider a town home or condo in close proximity to the airport.

        2) Size Of Household – If you expect your household size to grow by adding roommates, kids, or parents, you’ll want
        to consider buying a home with adequate bedrooms, bathrooms, backyard space, and a good school district. If you plan to remain single, a smaller home may be adequate.

        3) Functional Layout – What daily activities will you be conducting in your home? It’s important to select a home
        that allows room for your hobbies, home office, parties, or gourmet cooking. It wouldn’t make sense to choose a home with a small kitchen if you frequently entertain friends and family.

        4) Home Activities – Your choice of home should match the daily activities you plan to conduct at home. Do you like to construct large indoor crafts or woodworking projects? You’ll probably want a home with ample garage space for these projects. Are you an aspiring chef? Then a home with a large kitchen and pantry would suit your needs.

        5) Is This A Starter Home? – If your budget is tight and you’re barely able to qualify for a compact home, a good
        idea would be to buy a minor fixer upper in a good area. By spending a little time doing minor cosmetic remodeling, you could make the very appealing and list it for greater
        profit. With the extra profit earned from the sale, you can use it as a down payment on a larger home. or even a
        duplex.

        By addressing these 5 lifestyle facts, you’ll be able to select the best property to suit your future needs. A great exercise would be to imagine where you’d like to be in the
        next 5 years. Practice this with a friend or partner and let your imagination run free without being unrealistic. You may be surprised to discover additional lifestyle goals that will define what type of home you want.

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        Buying A Home Jointly – Facts You Need To Know

        Mar 12

        Posted by admin in Credit, Investing

        If your finances alone won’t qualify to buy a home, consider a joint purchase with a compatible friend or family member (or two) in the same circumstances. By combining your finances together, you’ll be able to increase your chances of qualifying for a home. If you plan to buy a home jointly with your roommates, the adjustment will be easier since you’re used to living together.

        One scenario to consider is purchasing a property with individual units like a duplex or triplex. You’ll enjoy some of the same benefits as your own home such as a private entrance, separate kitchen, and more. While this arrangement may seem advantageous, you’ll still have to address the issues of joint responsibility regarding ownership and monthly maintenance expenses for the land, roof, and other common areas.

        One cost effective option is to buy a single home and divide the living area into separate sections. The only problem with this setup is you lose the benefit of having your own private space. If possible, try to buy a house where the layout allows you to easily separate the living space.

        Buying a home with a co-owner has unique concerns and major financial issues. Be sure to sit down and discuss all possible scenarios with your future co-owner. One major issues will be in regards to how the down payment and monthly expenditures will be divided. Will everyone agree to split everything equally or will there be a percentage split based upon the amount of down payment contributed, who gets the larger bedroom, and other issues. There can be tax implications depending on the division of ownership.

        Another issue to be discussed is what happens to a co-owner’s share of the property when he or she dies? Will their share automatically pass on to the beneficiaries of their will or trust? What happens in situations when one owner decides to move out-do they have the option to rent their share of the house, sell it, or require the other co-owners to sell or buy him or her out?

        Taking proper title to the property can have major consequences when not done wisely. It’s best to seek the advice of a trained attorney before deciding on what kind of ownership to list on the deed. Some popular ways to list ownership on a deed are joint tenants with rights of survivorship or tenants in common.

        Some additional concerns that should be addressed are what length of time does everyone plan on staying in the property (and what are the options when one owner gets married or their parents need extended care); how will the common areas be maintained (cleaning, home supplies, music volume, and overnight guests); decorating the house, and what happens when one owner gets into financial problems.

        Buying a home jointly with another party is a huge commitment and it’s vital you choose the right person to partner with. Be sure to discuss all issues with your future co-owner and put the agreement in writing with the help of an attorney.

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