Your FSBO Success Manual —————-A ‘How-To’ Guide to Selling Your Own Home For Sale By Owner 800.737.1621 For Sale By Owner – Your FSBO Success Manual © 2006 Coastal Mortgage Services, Inc. All Rights Reserved For Those About To Sell-By-Owner, I Salute You. This book was designed specifically for individuals, just like yourself, who have made a decision to sell their homes on their own, without the assistance of a real estate agent. The process of selling your home can be made easier with the right tools and preparation. I am providing you a copy of this book to assist you with the many details of selling your home and to make you aware of issues and situations that will come up during the transaction. My goal is to help you get from FOR SALE to SOLD as quickly as possible. In return for my assistance, I am requesting something from you. I am expanding my business and I need your help. I am a licensed NC mortgage professional and I am seeking referrals to individuals who may need my professional real estate financing services. Because you will come into contact with potential BUYERS as a result of having your home on the market, I am offering you my assistance in return for your cooperation. I simply would like a copy of the names and phone numbers of people who visit your open houses. I have included a Guest Register as part of this handbook for your convenience. Also, any other individual that inquires about your home, please refer to me for financing assistance. It’s as simple as that! With my Free For-Sale-By-Owner Marketing System, I provide you with: A “Security Screen” to pre-approve potential buyers BEFORE they enter your home. Do you know who you are letting into your home? A pre-approval screen from me involves a credit and income check. This protects against unqualified buyers and provides a level of security for you. I have taken steps in the pre-approval process to verify exactly who wants to see your home. Do you really want to show your home to anyone who is not qualified to buy it? A free listing on my website, complete with up to 5 pictures, a description of your home, and mortgage tools to help the potential buyer. See my current listings at www.AlexWatkins.com. Free advertising in Charlotte Homes magazine. You can find this monthly glossy magazine at fine businesses and restaurants throughout the Charlotte area. Your home’s picture and brief description will be displayed along with your toll-free 800 number and extension. Your toll-free 800 number and extension makes your home a “Talking House”. It gives you advertising power for your home 24 hours a day with a recorded message extolling the features of your home. This toll-free 800 number service includes a Yard Sign with your 800 number and extension on it. With one push of a button, the potential buyer calling the 800 number is connected with me to pre-approve them and start the “security Screen” process. Wow! I will provide you with informative and colorful marketing flyers to have on hand summarizing your homes attributes and timely mortgage loan scenarios for your potential buyers. With these marketing tools and some upfront preparation, selling your home will be much easier. If I can help you market your home and save you thousands on real estate commissions, just imagine what I can do to save you money with the most competitive mortgage program! Call me…I am at your service! Alex S. Watkins Mortgage Master Your FSBO Success Manual Table of Contents About Me……………………………………………………………………. 1 About Coastal Mortgage…………………………………………………. 3 The Nine Most Common FSBO Mistakes………………………………5 Define Your Market – Pricing Strategy………………………………… 7 Critical Things to Sell Quickly & For the Most Money……………… 9 Advertising and Showing Your Home………………………………… 15 The “Talking House” System…………………………………………… 17 Free Charlotte Homes Magazine Advertisement……………………. 18 Sample Marketing Flyer For Your Home……………………………… 20 Free Website Listing For Your Home…………………………………. 21 Professionals Involved in the Transaction……………………………23 Negotiating and Accepting the Buyer’s Offer……………………….. 27 Components of an Offer to Purchase & Contract……………………29 Common Problems During Negotiation……………………………… 31 Troubleshooting – Problems & Solutions…………………………... 33 Closing and Settlement…………………………………………………. 35 For-Sale-By-Owner Information Sheet……………………………….. 37 Guest Register……………………………………………………………. 39 Phone Log………………………………………………………………… 42 My Mission Statement One of my specialties is helping For-Sale-By-Owner clients and their and buyers I offer quick pre-approvals & answers to scenario questions Experience, Knowledge, Competitive Pricing & Superior Customer Service is what I offer -I am an asset that you should have. Although the tools that I use to serve my clients have changed, my prime mission has not. That mission is to serve my client's needs with the best products and price in the marketplace, and to be a guide and counselor for my client through the process. Technological advances in my industry have streamlined much of what was once a cumbersome process. But technology without personalized service is an empty shell. You may be applying online or communicating by email, but my bottom line and prime directive is superior customer service to you from start to finish. I am an experienced and seasoned mortgage banker. I monitor the US Treasury and mortgage-backed securities markets on an hourly/daily basis to be a resource to my clients on lock-in strategies. Whether you are buying or refinancing, you need an experienced professional equipped with the right programs and competitive pricing to serve your mortgage needs. Expert personalized service is my specialty. I am the well-equipped and trained professional that you need on your side. I can offer you the widest product menu at the most competitive pricing available. Looking for 100% financing? I have it. Fixed Rate and ARM loans up to 100% with NO PMI...(WOW!) Are you in the "Jumbo" or "Super Jumbo" loan category looking for the best rate with low down-payments, and PMI alternatives? Call me now, it'll be hard to beat me. Building a house and need a one-closing "Construction/Permanent" loan with a 6, 9, or 12-month lock-in? O.K., you got it. Want to add-on to your house with a Repair & Renovation Loan? I got you covered. Are you a veteran needing a VA loan? HUAH! (Heard-Understood-Acknowledged). I can help. 1st time homebuyer? No problem. Are you self-employed and don't want to disclose income? I can get you a low downpaymment no income verification loan, even a No Income/No Asset verification loan! Do you have "bruised credit?" I can help with a number of innovative financing options. My motto and pledge to you is to deliver "the experience you expect, and the service you demand." I am here to serve you now and in the future, because I want you to be a client for life. 1 “We are in business to bring to our clients a wide range of programs at the most competitive interest rates available.” That is our philosophy. We exist to do one thing. We make mortgage loans to qualified borrowers. That’s it. After nearly twenty-five years originating and closing over $11.5 billion in mortgage loans in our regional market, we have developed the experience, the infrastructure, the products, and the pricing to be a leading force in our industry. And, we have developed a better way of delivering our power and expertise to you. Coastal Mortgage Services is one of the largest independent mortgage banker/brokers in the Southeast, the largest in the Carolinas. We are both a Fannie Mae (Federal National Mortgage Association) Seller/Servicer and a Freddie Mac (Federal Home Loan Mortgage Corporation) Seller/Servicer. These designations are only given to companies that have exhibited not only substantial financial strength, but industry experience and expertise as well. We are also a HUDApprrove lender for both FHA (Federal Housing Administration) and VA (Veterans Administration) loans. A member of the BBB since 1986, we also display the Better Business Bureau Reliability Seal that signifies our commitment to the values represented by the BBB. With the power and innovation of the Internet, we can now offer our mission plan and philosophy and our vast array of loan programs to a wider market. By streamlining our operations through better applications of technology, we stand ready to deliver to you the most competitively priced products and superior customer service to make the often-complex process of mortgages easier for you, the consumer. Our long experience in mortgage lending combined with our technological tools give Coastal Mortgage a competitive edge over other lenders. The Nine Most Common FSBO Mistakes When it comes to selling your home, there are nine common mistakes home sellers are likely to make. I've listed them here, with the hope that you'll be savvy enough to avoid them. Not knowing why you're selling. Are you selling because you've lost your job and have to move as quickly as possible? Or, are you selling because you or your spouse or partner just received a big promotion and you want to find the home of your dreams. If you know why you're selling and how quickly you have to move, it'll help you better target your initial list price. Not preparing your home for sale. Dirty, disorganized, and dark are not the words you want prospective buyers using to describe your home. To properly prepare your home for sale, you need to clear out the clutter, get your home into a state of hyper-cleanliness (and then maintain it that way), and make your home as light and bright as possible. Some fast ideas? Paint your interior white, wash your windows and cut back tall bushes and trees that block your views. Overpricing your home. In a balanced market, where there are roughly an equal number of buyers and homes for sale, it can take months to sell your home. Don't compound a weak market by overpricing your home. No one will even show up to take a look. Hanging around during showings. The last thing buyers want is you hovering over their shoulders as they open your linen closets. If you're selling by owner, follow buyers at a discrete distance -and don't talk too much. Owning a smelly house. If you have pets or small children, or if you smoke or cook with strong ingredients, your house probably smells. If you fall into any of these categories and think your house smells perfectly fine, invite a neighbor, friend or relative over for the sniff test. If your home doesn't pass, you'll need to make some changes before you'll be able to sell your home. Letting your house go stale. If your home has been on the market for more than four months without an offer, local agents and prospective buyers are probably starting to wonder if there's something really wrong. If there isn't, it could be time to adjust your price, or even pull your home off the market for awhile to give it a rest. Failing to recognize a good offer. Real Estate Agents like to say that the first offer is the best one you'll receive. While that may not be true, any offer should be treated seriously -even if the initial price is ridiculously low. In that case, don't get insulted. Instead, counter the offer at just below your list price and instruct the buyer's agent that you'd love to sell his or her clients your home and you're expecting their next offer to be substantially higher. Not making your final mortgage payment before closing. If your closing is set for just after the first of the month, you might not think you owe your final mortgage payment. But it's due on the first and when your lender calculates the pay-off amount, it will assume you're going to make this final payment. Know what you owe before the closing, so you don't have any extra late payments that get tacked on at the last moment. Setting the wrong closing date for tax purposes. If you have the choice to close at the end of one year or the beginning of the next, take a look how much closing on one side of the year or the other will help your bottom line. Talk to your tax advisor about whether you're better off closing in one year or another to get the most impact from your house sale. 5 Define Your Market – Buyer’s or Seller’s Market What type of real estate market are you about to enter as a Seller? Is it a “Seller’s Market” where demand is high because supplies of desirable properties are low, giving the Seller more power to direct the transaction? Or is it a “Buyer’s Market,” where the market conditions as a whole generally are in favor of buyers? It is simple supply-anddemmand More properties on the market mean greater supply, favoring a buyer with more from which to pick and choose. If there are fewer properties on the market, supply is short, giving sellers more of the upper hand since there are fewer properties from which buyers can choose. In a “Seller’s Market” multiple offers on the same property are common and prices are in the seller’s favor. A home seller in a “Seller’s Market” has many distinct advantages in the transaction that favor offers closer to the asking price. A home seller in a “Buyer’s Market” may have to negotiate the price more to entice a typical buyer to present an offer. In any event, knowing on what field you are playing is extremely important. Setting the Market Price of Your Home The greatest thing you can do to sell your home quickly and at the highest price is to stop thinking about your house as a home. You need to consider the home as a commodity or asset to be exhibited and advertised to the highest bidder. If selling your home went perfectly, your home would sell for the highest amount in the shortest period of time. But setting a price that is too high could wind up costing you valuable time and money. Regardless of whether you find yourself entering a Buyer’s Market or a Seller’s Market, the homes that sell fastest and at the highest price are those priced closest to what a typical buyer would expect to pay at that moment in time. For this reason, awareness and knowledge of your immediate competition and the factors listed below are essential to a successful selling strategy. Key Factors in Your Pricing Strategy Sales prices of comparable properties – The best indicators of market value are found in pending sales and closed sales of comparable properties settled in the previous six month period. The key factor is whether these were full-price sales. If the closed sales indicate the average seller received 94% or 95% of the listing price, then you have a good indication that your listing price should not be greater than 5% -6% of what you expect to net. A great tool I can suggest to use in pricing your home is an online appraisal that you can order directly from my site. It is called eAppraisal-Buying or Selling? Find Out What It's Worth! This is an Automated Valuation Model (AVM) that will give you legal information, public record statistics on your home, and most importantly, addresses and sales prices of comparable sales in your neighborhood of homes like yours that have sold recently. Pricing your home becomes much easier once you have the correct data. Marketing Times and Conditions -With the right sales information, you can find out how long the marketing times were for the closed comparable sales. The length of time on average that it takes to market a typical property is vital to your pricing strategy. And this is another positive factor for marketing your home yourself. Because you have no real estate commission to pay, you have greater flexibility over pricing. To move the property more quickly, lower the price by using some of the commission savings. Per Square Foot Calculations – In times past, square footage was a primary yardstick to gauge home prices, and it still works as a key factor in the equation. Square footage calculations work like this: If a house sells for $150,000 and it has 1500 square feet, the cost per square foot is $100. If the predominant price per square foot in your area is $105 per square foot, then you would be unwise to try to sell your home at $115 per square foot unless there was a level of desirability for your home that was not exhibited in the other comparable closed sales. The key is to ensure your price per square foot is supportable based upon the comparable sales considered. 7Desirable Attributes of Your Home – How many bedrooms and bathrooms does your house have? Is it more than the average number of bedrooms and bathrooms in the neighborhood? If so, you may want to adjust your price upward. If the number is less, a downward adjustment should be considered. Land Area and Value -Just as with bedrooms and baths, the amount of land your property has compared to other comparables could be a pricing factor. Consider substantial differences (plus or minus) in land area and value when looking at comparable sales. Adjust accordingly. Your Personal Timeline. Do you have a certain timetable that will dictate when the home absolutely has to be sold and closed, such as job relocation? The nature of such time constraints will have some effect on your pricing strategy. · Here is a quick table to gather the comparative market and sales information: Closed Comparables Pending Comparables Address Address Date Sold Listing Date Sales Price Listing Price # of Bedrooms & Baths # of Bedrooms & Baths Heated Square Footage Heated Square Footage Parking Parking General Condition General Condition When you are assured your level of research has afforded you the data to set your price, it is time to turn your attention to preparing the house itself to show with all items in good working order. The next section of the Seller Guide goes into detail about the necessary improvements you must have in place and some that are designed to speed the sale. 8 Critical Things To Sell Your Home More Quickly and For the Most Money Look at your property as though you were a potential buyer seeing it for the first time. Ask yourself if you would find it appealing…Would you buy it? First Impressions It is important to make certain that the first impression is a favorable one. You never get a second chance to make a good first impression. You'll have the most sales activity on your home in the first three to four weeks of the listing. The reason is simple: there are buyers out there who have seen everything available and for one reason or another, haven't bought. They are just waiting for something new to come on the market. When that new property does hit the market, buyers will scramble to look at it. It is common knowledge that the property will usually sell for the highest price during this time. After the initial surge of interest, the only people who look at it will be those buyers new to the marketplace. The tips contained in these sections contain all of the tips and advice that a real estate agent would tell you to prepare your home for sale. Make your home look and feel like a builder's model home. Everything should look like it belongs even if it means storing things until the home is sold. You are trying to create a feeling that makes potential buyers want to move in. Don't wait to see if the house will sell first before making repairs or replacing items. Once you do decide to do something, don't do just the easy ones or just the bare minimum. The property needs to look good from the street, up the sidewalk, on the front porch, throughout the house, in the darkest closets, and even in the attic. You definitely want to give the impression of a well cared for home. You want the prospective buyer to feel that this home is quality all the way through, not just on the surface. You are competing with every other home that is currently for sale: new and pre-owned, your area and other areas, those listed with agents and those trying to sell themselves; even with the foreclosures in the market. Your property must appeal to owner occupants who will pay the highest price for the property because they are going to live there as their home. Typical buyers put all of their savings into the down payment and closing costs and don't have anything left over to improve the home such as replacing old, worn-out things. Those buyers will have to live with that carpet until they can afford to replace it. If buyers have a choice of two comparable properties similar in price, they'll choose the one in the best condition. Just as on the other hand, if two properties are similar in condition, the buyers will choose the one that is less money. Use our checklists to prepare your home to sell quickly and at the highest price. Yard Improvements Stand at the street and look at the house. If all you can see are trees and shrubs, you have some yard work to do. One of the easiest things to do is trim the shrubs that are overgrown. They should be lowered to a height near the bottom of the windows. If there is ivy growing on the side of the home, remove it. If there are tree branches hanging low in the yard, they need to be pruned. A simple rule of thumb is to have all the limbs high enough so that you can walk under the tree. Look at this checklist for the yard of your home. Add colorful plants or flowers near front door and porch area Consider re-painting or re-staining a deck if the wood is worn out Repair damaged, rusty or bent fence; paint or stain if necessary If you have an awning for the patio, make sure that it is also free of debris and that there are no signs of tear or worn material. Replace if necessary Keep the firewood neatly stacked and trash area clean and organized Keep walks, steps and driveway obstacle-free 9 Mow, trim, fertilize and water lawn Power wash deck Prune trees and bushes Rake fallen leaves Remove unnecessary items such as gardening equipment Remove debris and personal items on deck and porch Remove signs such as Beware of Dog Remove weeds and dead or dying plants or flowers Replace welcome mat at the doorway Re-sod bare spots on lawn Exterior Conditions -Painting & Appearance Look at the front door and the area around it. Give it a fresh coat of paint. If the doorbell is broken, replace it. Keep the porch swept. Get an attractive mat for people to wipe their feet. Keep children's toys out of the front yard and off the sidewalks and front porch. Get the teenagers and children to understand the importance of keeping the house looking good while it is on the market. Look at this checklist for the exterior presentation of your home. Paint door and doorframe Paint exterior fixtures Paint mailbox Paint or clean front door and garage door Paint or re-stain fence if it is peeling or dirty Paint over any rust spots or streaks on downspouts Paint shutters, make sure they are hung straight Paint window ledges Polish door handles and knockers Remove rust from railing Repair any damage to chimney Repair holes in gutters and repair any separations from eaves Repair or replace shingles or tiles missing from the roof Sand and repaint areas with blistering or peeling paint Seal cracks on porch and remove any standing water if concrete. If wood, secure locks railings and seal or paint as necessary Straighten and clean antenna The Interior’s Condition -Painting Improvements Depending on the existing condition of your interior walls, including color styles, the interior may be a small or a big job. The important factor to remember is, as a rule, “neutral” sells. Avoid loud colors. Look at the interior as if you were a buyer and act accordingly to spruce up or transform your current interior. Look at this Interior Conditions checklist. Add new wallpaper if the current wallpaper is torn or withered. Make sure it adheres to the wall All woodwork like stairwell railings and doors should be repainted and or stained Have leaks repaired & watermarks covered 10 If needed, repaint faded, worn or stained interior walls Make sure that cracks in ceiling/walls are repaired The windows should be washed and stain free. The window frames should be painted if necessary and the hinges should not squeak Tone down bright room colors by painting them white or a neutral color Whitewash dark paneling Carpet & Flooring While new carpets and new flooring may not be necessary to sell your house, existing flooring and carpeting must be clean and presentable without flaws or defects. As with wall coverings, remember that “neutral” sells. Wall-to-wall black-and-white zebra carpeting may appeal to a rare buyer but not to the majority of the home-buying public. Look at this Carpet and Flooring Checklist. Do not sweep things under a rug or carpet. The carpet or rug should lay flat on the floor If you have pets hire a professional to deodorize carpets If needed, replace any worn carpet If needed, steam clean carpet thoroughly If needed, install new neutral-colored carpet with a thick padding so prospective buyers feel comfortable as they walk on your floors Make sure carpets are secure. Stretch and tack down any loose or curling carpet Make sure the carpets are vacuumed, free of pet hair and combed If you decide to replace a linoleum floor, choose a neutral color that will have wide appeal If your home has hardwood floors with room-size rugs, get the hardwood into its best condition with fresh nonslli floor polish or other coating to make it shimmer Mop and vacuum floors Replace worn out vent covers Thoroughly clean linoleum floors in kitchen and bathroom Plumbing & Electrical Improvements Bathtubs, showers and sinks should be freshly caulked. All the grout should be clean and in good condition. There are excellent cleaners that will do the job without tons of scrubbing. There should be no leaks in the faucets or traps. Look at this checklist of Plumbing and Electrical items. All drains should be clean and free flowing All toilets should be in good working order Clean up, paint or replace old plumbing fixtures in all bathrooms Have your well or septic inspected or repaired If needed, hire a plumber to replace badly rusted and corroded plumbing pipes Inspect, clean and change filter of furnace Make sure that all bathroom and kitchen faucets are in good working order Make sure that all smoke and burglar alarms are functional Remove mildew stains and repair any loose, crumbling caulk or grout around tile and tub areas Repair broken doorbell Service sprinkler system 11 Kitchens and Bathrooms Checklist Kitchens and bathrooms are areas of homes where people spend a lot of time. They are also rooms where dollars spent on improvements yield the highest return on investment. It is a good idea to take some time with a critical eye and assess the features of your kitchen and bath areas to see where there are things that can be improved prior to listing and selling your home. Look at this checklist of Kitchen and Bathroom ideas. If the appliances are included with the sale of your home, make sure they are operating and have proper documentations such as warranties and repair information If there are missing or damaged tiles, have them replaced Re-touch or repaint kitchens and bathrooms if the color is dated or the paint quality is poor Make sure sinks are clean and stain-free Repair damaged countertops, sinks or tubs Make sure that there are no leaky faucets Re-caulk damaged caulk on shower, sinks, tub or toilet Clean tile grout and make stain-free Paint, touch-up or refinish kitchen cabinetry Tighten or replace loose doorknobs or cabinet pulls, sticking doors and drawers and wobbly hinges Replace toilet seat If appliances are dated or not functioning, consider replacing Lighting Improvements As with kitchens and baths, lighting is an essential part of the appeal of one home over another. Make a critical survey of the lighting inside and outside the house. Use the tips in this Lighting Checklist to make living spaces as bright and lighted as possible. At night, turn on porch light and outdoor lighting Clean all switch-plates Clean all windows, inside and out Clean existing shutters, blinds or drapes Clean skylight for leaves and other debris Increase the wattage of bulbs to maximum possible wattage Install dimming switches in common rooms such as dining rooms and living rooms to allow you to create lighting for different occasions Install new window treatments if those you have are damaged or dated Keep curtains open and use natural light as much as possible Make sure all outdoor lighting works Prune outside trees to allow natural light inside Turn on enough lights so home is well lit during showing Wipe all light fixtures with a rag and cleaning solution Repair sticky windows which do not open 12 Staging Your Home for Showings Use these tips to create the ideal stage for your home’s market “selling performance.” Little things do matter. These small touches can be the deciding factor. Use this checklist to make sure you maximize your home’s showing potential. Clean fireplace and prepare with logs for display Clean out the entry closet and put only a few hangers so that the buyer can visualize winter coats Consider lighting up the fireplace during the colder months Hang artwork on the walls Lock pets up away from home during showings Open drapes to allow light in Place fresh flowers, potpourri and other decorations around house (even in bathrooms) Play music during open houses Put cedar chips inside the closets Remove all unnecessary articles in basement or attic Remove magnets and notes from refrigerator Remove personal possession, like photos, trophies and mementos Set the dining room table for a dinner party Stage garage -clean up oily floors, straighten tools and other equipment Tag or remove items not included in sale (i.e. water conditioner, chandeliers, plants, drapes) Just before a Showing Have the drapes and window shades open to let in as much daylight as possible. If it happens to be night, be sure that all of your outdoor lights are on, especially landscape and pool lights if you have them. Open all the doors between rooms to give an inviting feeling. Turn on all of the lights including the lamps. Tune the radio to some quiet, "elevator-style" music. Pick up any newspapers or magazines that may be lying around. See that the counters are free of unnecessary items and that any dirty dishes are put in the dishwasher. Take out the trash if needed. If you have pets, get them out of the way. Not everyone may share your love for animals. Some people may even be allergic to them. When you leave the house in the morning or during the day please leave it as if you know it is going to be shown. It's difficult sometimes and might even mean you have to get up a little earlier in order to take care of these important items. You never know when the right person is going to look at it, so you must always be ready for them. 13 3 Critical Suggestions Suggestion #1 -Get a pre-listing home inspection by a qualified home inspector. This is strongly suggested as a way to know what mechanical and/or structural items must be repaired in order to meet the legal disclosure requirements involved in selling your home. See our section entitled Know the Score Early -Get a Pre-Listing Home Inspection. Suggestion #2 -Combine the Pre-Listing Home Inspection with a Buyer's Home Warranty. Home Warranties Are A Confidence-Building Insurance Policy. Although the buyer may still want to pay for his own Post-Contract Home Inspection by an inspector of his own choosing, a Seller provided Home Warranty goes a long way in giving the buyer some protection and peace-of-mind against unexpected major repairs. Most warranties are reasonably priced between $300-$400 and are renewable by the buyer after the initial term of one year. Suggestion #3 -Prepare a Property Disclosure after the Pre-Listing Home Inspection that details any and all known problems with the home. Many states require this, but even if they don't it is a good business practice and will prevent any misunderstandings while serving to limit liability on many issues. 14 Advertising and Showing Your Home In the film 'Field of Dreams,' a voice whispers. "If you build it, they will come." When applied to selling your home, the phrase is "If you advertise it wisely, it will sell." Whichever advertising choices you make, the potential buyers are screened and pre-approved before your contact information is made available to them. You have greater control and security over who sees your home because our process screens uncommitted or those who are not qualified to buy your home. A full and balanced home selling plan should include the following: For Sale sign. The sign should be large enough to be easily readable with a contact phone number. An internet listing with pictures of your home. Recent studies have shown over 20% of all home purchases now begin with or include searches of online real estate listings. I can place your home on my website with it’s own descriptive page with up to 5 pictures of your home. A "Talking House" option. My "Talking House" option is an advertising medium that permits a potential buyer to call a toll free number to hear a pre-recorded description of your home's qualities. It is a personable way of reaching out with your own sales pitch to your buyer to describe your home. Interested buyers can then go through our screening and pre-approval process to get your contact information and set an appointment to view your home. The prospective buyer will also be able to hit a button to directly contact you. An additional feature of the 888 number, is the “call capture” feature, which logs every call, whether or not they leave a message or not, that enables us to “re-market” these individuals to increase your chances for success. Newspaper and Targeted Publication ads. Newspaper advertising is another very good way to reach out to buyers. The following is a typical ad that includes the necessary information: “FSBO: 4BR, 2.5BA. Pool/Spa. Excellent schools. Shopping/parks, walking dist. Just remodeled. Motivated seller. 800.555.1212 x000123.” Bigger ads cost more and show inexperience, and most often are just a waste of your money. Don’t list things that tell everything… just the basics. If your property has items that people are NOT looking for, and you list them, you are chasing them away before they have the opportunity to see for themselves. They may settle for what they didn’t want initially, for what they do want. Home Flyers. Use your creative side to prepare a brochure of quick facts about your home. Be brief but include all of the basic information such as numbers of bedrooms and baths, square footage, neighborhood, desirable amenities, and the price. These flyers could be used to advertise your home on bulletin boards at the local grocery, church, or community center. They also come in handy when pre-screened buyers view your home to remind them of your home later. Word-of-Mouth advertising. When it comes to selling your home, don't be a secret agent. Let your friends and family fill out your sales team. Your neighbors can be another great source of potential referrals. In order to have control and the security that I offer, remind them to use my toll free number to get pre-screened prior to contacting you. 15 Make sure to include the following in ALL of your advertising: Indicate you are selling by owner. (This really attracts excitement!) Indicate the structure, style, and number of bedrooms and baths. List the street address, but not the city, state, and zip. Do not indicate the sale price. Make them call first. Indicate any special features like pool, spa, fruit trees, R.V. parking, etc… List the Talking House 800# I have assigned to your house. (This eliminates the need for you to “sit around the phone,” waiting on calls, or having to sift through personal messages on your answering machine to get to “FSBO” calls. How to Have a Successful Open House Best Days: Saturday and Sunday from 1pm to 4pm Use a guest list to register all those who look at your home. Turn on lights in all rooms and open blinds to let as much light into the home as possible. Have soft background music playing wherever a radio is available. Light fireplace for warm and homey feeling (unless it’s summertime.) Use open house signs and flags to draw as much attention to the home as possible and make it easy to find. Make sure the home is neat and clean inside and out. Fresh paint and clean carpets go a long way. Park cars away from the home and out of the garage. It will make the garage look larger than if cars are inside. Cleaning the garage can also help. Water the lawn, front and back, just prior to open house starting. Put a drop of vanilla on the oven rack and turn the oven to 350 degrees for a great smell or bake a batch of cookies during the open house. Put all toys away, inside and out. Keep pets secured – don’t scare off the prospects. 16 This advertising method never sleeps! It’s available 24/7/365. Provides point-of-interest information with a re corded message detailing your home’s selling points. Direct connect to me to screen and pre-approve your potential buyers Captures the phone numbers of the callers to allow follow up call. This is just one of my free services offered to my For-Sale-By-Owner clients.. The ‘Talking House’ 800# Call Capture System Make Your House Talk! 17 Charlotte Homes Magazine Advertisement 18 Charlotte Homes Magazine Advertisement 19 Carmel Woods... 4 bedroom, 2.5 bath ranch with over 2500 square feet. This home features new paint inside and out, a new roof, and formal living and dining rooms. There is a huge great room with 13’ ceiling, decorative wood beams, built-in bookshelves, wet bar and gas fireplace. The yard has new landscapping a irrigation system in front lawn, private fenced back yard, new brick patio and storage shed. Super Location! Office: 704.554.8100 Direct: 704.607.5604 www.AlexWatkins.com Alex S. Watkins LOAN PROGRAM ARM CONVENTIONAL CONVENTIONAL LOAN TYPE 5/1 Lender Paid MI (30 Yr Fixed) 30 Yr Fixed 80/10/10 DOWNPAYMENT 10% 5% 10% SALES PRICE /Value $236,000 $236,000 $236,000 1ST MTG AMOUNT $188,800 $24,200 $188,800 2ND MTG AMOUNT $23,600 $23,600 TOTAL MORTGAGE $212,400 $224,200 $212,400 INT. RATE -1ST 5.50% 6.125% 5.75% INT. RATE -2nd 8.375% 0.000% 8.375% 1ST MTG $1,072 $1,362 $1,102 2nd MTG $179 $0 $179 TAXES ESTIMATED $96 $96 $96 HOMEOWNERS INS. $81 $81 $81 TOTAL PAYMENT $1,428 $1,539 $1,458 30 Yr Fixed 5% 10% 20% 294,900 294,900 294,900 224,124 $265,410 235,920 56,031 280,155 265,410 235,920 6.00% 7.75% N/A N/A 1273 1,592 1,377 401 N/A N/A $223 $223 $223 62 62 62 1,959 1,877 1,662 Sample Marketing Flyer 20Free Listing of Your Home on my Website Featured Home #1 -11230 Abbottsbury Ct. Take a pictorial tour of this beautiful French Country House. 11230 Abbottsbury Ct. Charlotte, NC 28277 $ 330,000 5 Bedrooms, Full baths: 4, Half baths: 1 Style: French Country Stucco Type: Single Fam. -2 Story Subdivision: Providence Crossing Approx. Square Footage: 3885 Parking: Concrt/Drv, 2 Car Garage Year Built: 1992 Look at this beautiful French Country home. Located near Audrey Kell and Rea Rd, Ballantyne shopping and amenities are only minutes away. 3000 square feet of luxury with two fireplaces, huge updated kitchen, 22' ceilings in living and dining room areas. Master Bedroom has it's own bar and fireplace with tray ceiling and whirlpool jacuzzi bath in the master. Hard-coat stucco, two car garage, expansive deck, beautifully landscaped yard. A must see and a great value! Priced at $330,000. Get Pre-approved & Schedule a Viewing of this home. Mortgage Calculators Market Commentary Apply Online Newsletter Signup Market Snapshot Contact Me 21 Professionals Involved in the Transaction The Lender There are many advantages of working with a reliable, professional, mortgage company. Some of the very important services that I, as your personal mortgage lender, will provide are as follows: 1. Pre-Approval of All Prospective Buyers: As your lending professional, I will pre-approve each potential buyer in order to make sure that they are sufficiently qualified by thorough examination of their credit status and current financial status, as well as through automated underwriting. This is extremely important in order not to waste your time negotiating with an unqualified buyer. This will save you valuable time! 2. Ability to find the right loan at competitive prices: As a full service mortgage banker, I am able to offer the best programs at the best possible rate. This allows the borrower the freedom to select the loan best suited for his or her needs at the best available rate without having to shop all over town, and risk multiple people running their credit and lowering their score, which may eliminate them from qualifying for a loan. 3. Efficient follow-up and teamwork: Once the transaction has been negotiated, I will work hand in hand with the other support team members in order to make sure that the loan is approved and funded in a timely manner. I am capable of locating and handling any unforeseen situations before they become a problem. I will keep you informed along the way of all-important details. I have the experience and knowledge to get the job done right! As a service-oriented business professional, I will handle your prospective buyers with care and confidentiality, and make sure they are well informed on all of their loan options. You can rest assured that your sales transaction will not be held up in the loan process. I am committed to my customers and will do anything and everything in my power to assist them with their success. The Appraiser Having an idea of what is involved in appraising a piece of property can greatly help in maximizing the appraised value and avoiding costly details and re-inspections. The appraisal process consists of several steps. The following are the major steps in the sequence normally followed by appraisers: 1. Research the subject property as to size, bedrooms, baths, year built, lot size, and square footage. 2. Gather data of recent sales in the subject’s neighborhood. The appraiser needs to locate at least 3 and preferably more similar-sized homes that have sold and closed escrow in the neighborhood. The homes need to be within one mile of the subject and sold within the past 6 months. These homes are considered the “Comparable Properties” or “Comps” for short. 3. Field inspection consists of two parts: first, the inspection of the subject property, and second, the exterior inspection of the comparable properties which have been selected to estimate the value of the subject property. 23 The subject inspection consists of taking photos of the street scene, front of the home and rear of the home, which may include portions of the yard. The appraiser will make an interior inspection for condition, noting any items that would detract from or add to the value of your home. He will also draw a floor plan of the home while doing the inspection. The inspection of the comparable properties is limited to an exterior inspection. For features which cannot be seen from the street, the appraiser has reports from Multiple Listing Services (MLS), county public records, and appraisal files, along with other sources to help determine the condition and amenities of the comparables. After the field inspection has been completed, the appraiser must determine which comparable properties most resemble the subject, making slight adjustments in value for any differences between them. After making the required adjustments, the appraiser must go through the reconciliation process with the three comparable properties to determine a final estimated value. This method of estimating value is called the “Direct Sales Comparison Approach to Value”, and it accounts for nearly all of the considerations in determining value of single-family homes. It is important to consider that the appraiser will be taking photos of the street scene and the front of the subject. The street scene gives the lenders some kind of idea as to the type of neighborhood in which the home is located. The photo of the front of the home gives the lender an idea of its condition and its curb appeal. And lastly, a photo of the back of the home and part of the yard is taken. Many homeowners don’t take care of the rear portion of their homes and back yards, so for this reason the rear photo is required. In most cases – over 90% of the time – what you see in the condition of the exterior of a home will be repeated almost exactly the same in the interior. So one of the most important things you can do to enhance the value or perceived value is to improve the curb appeal of your home. An appraiser will call in advance to set up an appointment to inspect your home. At that time, offer to supply any information about the home’s size, number of bedrooms, bathrooms, pool, enclosed patio, etc… The more that is known about the property prior to inspection, the better the appraiser can focus on researching the most similar comparables. “Doing you homework” will maximize your chances of having a good appraisal. While your home is being inspected, don’t follow the appraiser from room to room causing distraction. Instead, allow the inspection to go smoothly. In case the appraiser has any questions, be close by to answer them. The time to mention the things you think are important is either before or just after inspection. The Home Inspector You need to know a great deal about your house when you sell it, usually more than the average seller knows or wants to know. So, how do you handle disclosure without spending the next six months learning about construction? Many sellers use an inspector. The inspector solves a whole series of problems. If the inspector you use is bonded, and a problem arises after the sale, it is easy enough to say to the buyers. “I didn’t know there was a problem. I had the house inspected and I trusted the work of the inspector. Blame the inspector!” That, of course, does not get you off the hook, but it does help things. In addition, if there are damages to be paid and the inspector is to blame and bonded, the inspector may have to pay them instead of you. Thus, using an inspector can be very worthwhile. We will be more than happy to refer you to a reputable home inspection company. FINDING A REPUTABLE HOUSE INSPECTOR… Almost anyone can inspect a house, but that does not mean they are qualified. In recent years, contractors without enough work have taken to house inspections to supplement their income. A house inspection usually costs between $250 to $400. A contractor can walk through your house, check little boxes on a form, and charge you several hundred dollars for a few hours work. But are contractors qualified? Some are and some are definitely not. A contractor who builds new homes may know very little about older homes. A plumbing contractor doesn’t necessarily know about electrical. A cement contractor probably is not an expert on roofs. The value of their inspections is questionable at best. 24 The real problem is that housing inspections are relatively new. In a few years, states will undoubtedly begin licensing and testing housing inspectors. But as of now, few states are doing this, so sellers are on their own. One-way of qualifying a potential inspector is to insist that he be a member if ASHI. This is the American Society of Home Inspectors. It is a trade organization which has been endeavoring to raise the standards of the house inspectors in general. ASHI sets standards for inspectors and makes an effort to see that its membership follows those standards. ASHI, however, does not require its members to be contractors. Having a contractors license does not necessarily qualify someone to be a house inspector. For more information about ASHI, you can contact the organization at Suite 630, 1010 Wisconsin Avenue, NW, Washington, D.C. 2007. Their telephone number is (202) 842-3096. Beware of contractors who offer to do a home inspection for a nominal fee, then find something wrong and offer to fix it, usually for a high fee. Some unscrupulous contractors have been using home inspections as a way of procuring business. A good rule of thumb is to never have the person do the work who does the inspection. Also, don’t ask the inspector to refer you to someone. That someone could be the inspector’s brother-in-law and sister who are on the team. Always insist on getting a written report from an inspector. An oral report is useless to you if there should be a problem from the buyer later on. The problems occur. Everyone seems to remember things differently. You may say the inspector told you the house was perfect, but the inspector may say that the defects that the buyer is now complaining about were disclosed in the inspection. Get it in writing! TERMITE INSPECTION This is just a quick note to point out that termite inspections are not really a new part of the home inspection process. Lenders have been requiring termite inspections as a condition for approving a new home loan for decades. A termite inspection and the repair of damage have been a requirement of home sales almost as long. In almost all states, termite inspectors are licensed, and their written reports are required to be registered. Most home inspectors will do a termite inspection as part of the home inspection process. Home Warranty In addition to inspections, you can also obtain a home warranty, which will cover the major systems for the new buyer. These will include heating, air conditioning, electrical, plumbing, appliances, and more. The typical home warranty costs approximately $275.00 to $400.00 per year depending on what additional items you may choose to have covered. For an additional fee, you may choose to have coverage for pools and their associated electrical appliances as well as other items usually not covered such as washers, dryers, refrigerators, etc. As a For Sale By Owner, you may want to advertise that the home warranty will be included with the home sale – you pay the first year – and the money will be well spent. Once a buyer takes possession of his new home, it can be very troublesome and expensive if major systems break down. The home warranty company covers these items just like an insurance policy and the coverage can be renewed each year if desired. In the event of a problem, the home warranty company will charge a deductible, usually $25-$50 per claim, and then they’ll send out their approved repair companies to take care of the problem. I personally saved almost $4000 in repairs the first year I bought my own home due to air conditioning and plumbing problems that needed repair. Consult your local yellow pages for listings of Home Warranty Companies or ask us and we will be happy to assist you. You can also contact some of the larger air conditioning and heating companies who contract with these home warranty companies. They will be happy to give you the names of the ones they are dealing with. Be careful to select a reputable home warranty company. Check out their track record with a local Realtor or the Better Business Bureau. 25 Negotiating and Accepting the Buyer's Offer This is a very important phase of the home selling process. Hopefully, you have everything by the book to this point, including putting your home in the best selling shape possible, setting the best price after researching the market, and choosing the best advertising options. This phase requires some negotiation, some patience, and some management of details to keep the process on track. In this section, prepare yourself to negotiate the details of an Offer to Purchase and Contract, negotiate the details including the sales price, any home inspection repairs. If the buyer needs assistance in this area, suggest he contact your real estate attorney or closing agent, or hire his own to help write the offer. This is a prudent step for both of you since a real estate settlement firm of some kind will have to close the transaction. The earlier the settlement agent is chosen and brought into the transaction the better, because they can hold earnest money deposits and help negotiate an Offer to Purchase and Contract. An Offer to Purchase and Contract and a Real Estate Property Disclosure are the legally-binding documents that detail the agreement between the buyer and the seller. It specifies the property being purchased, the buyer and seller, the price being offered, any deposits, contingencies for financing, date of closing, home inspections desired and remedies for items needing repair. In most cases, the buyer will also write a "goodfaait deposit," held by a closing agent (usually an attorney or a title company) until closing and then applied to the buyer's down payment. From the buyer, ask for a copy of their mortgage pre-approval letter with the Offer. Impose a SPECIFIC time limit for acceptance of any counter-offers so the Buyer has to respond in a timely manner. Specify desired closing and possession dates. Review and understand fully any seller financing concessions for payment of closing costs or points the buyer is making within the Contract. Ensure the buyer is willing to give a reasonable good faith deposit. Remember the buyer is asking you to take your home off the market based on the strength of their Offer to Purchase. Very Important: Before accepting any buyer's offer, you may want to have it reviewed by your choice of closing agent. The closing agent can be a title company, a real estate attorney, or an escrow company. The closing agent is also the entity to hold the earnest money (good faith deposit) in their escrow account until the closing. 27 Components of an Offer To Purchase and Contract Sales Price The full purchase price being offered by the Buyer Full Names of Buyers and Sellers Full legal names and marital status are required Address & Legal Description of Property Be complete and specific -get the tax parcel # Other Property to be included with home Window treatments, appliances, fixtures, etc. Earnest Money Deposit Usually 2% -4% of price, held by closing agent or third party until closing Specify Closing Agent, Attorney, or Title Company The party who is paying for the closing generally gets to choose Closing Costs Define who is to pay closing costs -If the seller is to pay, specify an amount Closing Date, Closing Location, and Possession Very important for scheduling many things Pro-rating Taxes, HOA dues, utilities The Seller owes and pro-rates through the day of closing What about a Home Warranty? If you want additional protection for mechanical and structural defects that may not be reported in the inspections, the buyer may want a Home Warranty from you. These are relatively inexpensive and may provide some protection if something major goes wrong after the closing. The first offer is the best offer in many cases. Negotiating to a "yes" with the first offer is always a strong suggestion. In evaluating the buyer's offer, you have to keep in mind your timetable, the net proceeds you will take away from the sale, and any buyer-requested financing contingencies; which effectively may reduce your net. Take a reasonable amount of time to reflect and figure out these items and how they play into your plans before responding to the offer. Chances are you may not accept the buyer's first offer. There are a number of common and uncommon circumstances that may be negotiated until both parties have satisfaction. It is very important for both buyers and sellers to be patient and realistic. Since both buyer and seller want a positive result, both are motivated to negotiate to a "yes". If both parties cannot find common ground and reach an agreement, the transaction will not be finalized. 29 Common Problems During Negotiation The Problem Solutions The Buyer's Offer is too low. Very Common. If the offer is ridiculously low, reject it outright without a counter-offer. If the offer is in the low range of your desired net proceeds the options are to take it, split the difference between your price and his offer, or reduce your price incrementally to find a "yes." The Buyer's Earnest Money is too low or none was offered at all. It is important that the Buyer offer a reasonable amount of earnest money in order for you to take your home off the market. If they are unaware of this custom, let them know a closing agent can act as a third party to hold the deposit in an escrow account. Be reasonable but firm in requesting a reasonable earnest money deposit. A counter-proposal back to the Buyer may include put an additional earnest money deposit put into escrow after the home inspections are completed and any contingencies have been satisfied. The Buyer's financing terms are unreasonable. Buyers may use financing contingencies as a way out of a contract. Common examples are writing in an interest rate for financing that does not exist or may not exist due to fluctuating market conditions. Make sure the Offer reflects "market rates." Another possible danger signal is whether the Buyer is relying on 100% or near 100% financing for their mortgage. Review the pre-approval letter for specifics. The Buyer wants closing costs or points from you at closing. Any costs you agree to pay at closing for the Buyer will reduce the amount of money you take away from closing. Be aware of the net proceeds number and how that contract concession will affect it. If it reduces your net too much, consider a counter at a higher price that will include the closing costs and/or points without reducing your desired net proceeds. The Buyer wants a faster closing date than you do. This may mean the Buyer is motivated by a specific circumstance. This may be good news for you. If there is not a reason you cannot close earlier, then agree to the date. If the quick closing will penalize you financially, negotiate that cost into your counter-offer. The Buyer wants a longer closing date than you do. There is definitely a reason. Find out why. Do they need to save money for closing? Are their children wanting to finish school? If it is a question concerning their ability to buy (savings for closing, credit issues, etc), there is reason for concern. If it is a scheduling issue, such as a school schedule, get a firm loan commitment letter and wait if you have the time; if not, reject the offer. 31 The Buyer's present house must sell before they can close on your home. This is probably the toughest scenario. In a Seller's Market, this contingency will probably not work. Why? Because you as a motivated Seller will not take your home off the market for the uncertainty of a contingent sale. Suggest a bridge loan to gauge the Buyer's ability to carry both houses. In a Buyer's Market where you have had many showings but no offers, you may accept the contingency. If so, write in a "kick-out" clause enabling you to accept a better offer unless the Buyer agrees to remove the contingency. A kick-out clause enables you to accept the offer with the contingency, but continue to market your home at the same time. If you get another offer, the kick-out clause will allow the Buyer to lift the sale contingency to protect his offer. If the Buyer does not lift the sale contingency within a specified period of time, you can proceed with the new offer. If the price is right and you know your net proceeds are sufficient, you still need to be aware of these contract contingencies: Contingencies in the Offer to Purchase and Contract Contingency for Financing Review the buyer's mortgage amount, down payment amount, copy of Pre-Approval Letter, & specify a timeframe for full loan approval to get a read on what the buyer is trying to accomplish in terms of mortgage financing. As stated above, beware of interest rates in the financing section that are unreasonably low. Contingency for Inspections Mechanical & Structural, Termite, Radon, Specific Items (roofs, stucco, fireplaces) Most buyers will obtain a home inspection and a termite inspection. Additional inspections could include inspections for specific items including roofs, stucco, fireplaces, and/or heating and air conditioning systems. Make sure there is a specific date by which all inspections must be complete. Contingency for Appraised Value It is prudent for buyers to include a contingency that states that the house must appraise for at least the sales price or the contract is null and void or the price must be renegotiated. If you followed the market analysis for pricing your home that you did upfront, the home should appraise adequately. As with the original Offer to Purchase and Contract, any counter-offers should also be in writing to be legal and binding on both parties. An accepted Contract by both parties makes the agreement binding and plans for closing can be formulated with the assistance of the chosen closing agent. 32 Troubleshooting -Problems and Solutions The home inspections are a crucial part of the process. They will identify any potential problems to the Buyer, which he will in turn, ask for a solution from you as Seller. Here are some common inspection issues and possible Solutions: The Problem Solutions The House Appraises Lower than the Sales Price If there is not an Appraisal contingency in the contract, you can hold firm at your original price and hope the Buyer has the money and the conviction to buy a home worth than what he is paying for it. This is an unrealistic notion except in the strongest of all Seller's Markets. Another option? Renegotiate the contract downward or split the difference. If that doesn't work, you can walk away and put the house back on the market with the knowledge that at least one appraiser valued the home at a value less than your last contract price. The termite inspection reveals active wood destroying insects. In most cases, the cost of the termite inspection is paid by the Buyer. The cost of any treatments, or termite-related repairs are usually paid by the Seller and must be completed before closing to satisfy the mortgage lender. Mechanical and/or Structural Inspection shows items needing repair. The contract speaks to these issues but can be summarized as follows: The Seller can agree to repair at their cost. The Seller can refuse to repair, but find a way to compensate the Buyer through a lower sales price or financing concession unless the Lender requires repair. The Seller can say no to any repairs. The key here is to assess how necessary and expensive the repairs are. The Buyer will most likely ask ALL items to be repaired. This is unrealistic in all but the strongest Buyer's Markets. If the repairs are necessary and valid, it may be in your best interest to offer a reasonable amount towards the cost, knowing that the next Buyer you are likely to get may find the same items to repair. This is a "bite-the-bullet" moment or a "stand-firm-in-the saddle" moment. The closing of your sale may rest on your decision. Be flexible to the fullest extent you are able to be. Remember, if this Buyer's inspector found these issues, a future inspection will reveal the same problem and you will face the same decision again with another Buyer. Another negotiation is necessary. Approach this negotiation with a "win-win" attitude for both parties. There is a problem with the title to the property Per the contract, the Seller must sell the property with a clear and marketable title. If a solution cannot be found to clear the title, the lender will not allow the transaction to close. Identify the issue and have the closing agent investigate and suggest a solution. This cannot be negotiated away. 33 Closing and Settlement After the Offer to Purchase and Contract has been agreed upon and executed on by both Buyer and Seller, plans for the settlement should go forth in earnest. If a closing agent (a real estate attorney or title company) has not been selected by either party, now is the time to select one. It may be you took the earlier advice to have the offers and counter-offers reviewed by the closing agent and the earnest money held in escrow by that party. Part of the Offer to Purchase and Contract asks for specifics on closing date and location of settlement. The closing agent performs the necessary paperwork, title searches, and closing papers to complete the agreed upon transaction. Recommendations from friends, family, or co-workers can be obtained. The following criteria should be considered when choosing the closing agent: Reputation of the closing agent in the area. Transactional experience and expertise in matters of real estate closings. Physical location of the closing agent's office and availability of closing dates as specified. The specific functions of the closing agent will or may include: Negotiation of the Offer and any Counter-Offers. Deposit of the Buyer's earnest money into a trust or escrow account until settlement. Ordering or securing a Title Report on the property. Obtaining payoffs of liens on the property. Obtaining acceptable title insurance on the property acceptable for the Buyer and the Lender. Acting as a "clearinghouse" for collection and payment of all transactional costs such as surveys, termite letters, mechanical and structural inspections, etc. Preparing a HUD-1 Settlement Statement to display both Buyer and Seller costs and proceeds Preparing and executing all necessary documents to complete the transaction. Recording the necessary legal documents to close the transaction. Disbursing and accounting for proceeds to the proper parties. To accomplish these tasks, the closing agent will need the following as soon as possible: A copy of the fully ratified and signed Offer to Purchase and Contract with all addendums. All owners' names and addresses. A request for title(generally submitted by the Buyer's lender). Other inspections(mechanical/structural, pest, radon, etc) and invoices. The Buyer's earnest money check to go into escrow. Homeowners insurance information for the Buyer. Projected Closing date and time. If selling a condominium, town home, or a home in a planned unit development, provide a copy of the Declarations, By-laws, and Incorporation documents to the closing agent AND the Buyer . 35 The Preliminary Title Report will reveal all liens or encumbrances against the property. If there is a title problem, this will identify it. The closing agent should be able to suggest remedies or courses of action to rectify title problems prior to closing. The Week of Closing -Checklist Make sure the date and time of closing are communicated and agreed upon by all parties. Finalize all agreed upon repairs. Schedule the Buyer's final walkthrough before closing to ensure the condition of the property is acceptable and is as agreed by the Contract. Get a copy of the HUD-1 Settlement Statement from the closing agent to double check the figures, ensuring that your net proceeds are what you expected. Below is a worksheet to illustrate how to determine your net dollars from closing: Seller's Net Profit Worksheet: Sales/List Price $______________ Minus Real estate commission @____%_ = (-) ______________ Minus 1st Mortgage Balance (-) ______________ Minus Any Prepayment Penalty? (-) ______________ Minus 2nd mortgage/Equity Line (-) ______________ Minus Home Improvement loan (-) ______________ Minus Closing costs paid for Buyer( negotiable) (-) ______________ Sellers Costs : Revenue Stamps_____@_____per thousand = (-) ______________ Pro-Rated Property Taxes: $_____per month (-) ______________ State Intangibles Tax(if applicable) (-) ______________ Revenue Stamps_____@_____per thousand = (-) ______________ Deed Preparation Fee (-) ______________ HomeOwners Association Fee/Assessments (-) ______________ Repairs? (-) ______________ Net Profit $_______________ • If you are not attending the closing, have an acceptable power-of-attorney in place to give a designated person the ability to sign and act for you in your absence. • If you are using the proceeds to buy your next house immediately, determine how to physically get those funds to their destination promptly. • Close the utility accounts in your name to coincide with your last day of possession of the home. 36 FOR SALE BY OWNER INFORMATION SHEET OWNER/SELLER INFO: NAME: ______________________________ NAME: ______________________________ HOME PHONE #:_______________________ WORK PHONE #:_______________________ CELL PHONE #:________________________ 1) Are you still living in the subject property? 2) If not, can you give me the address where I can send you some information? Address: ______________________________ City: ___________________ State: _____ Zip: ________ 3) Why are you selling your home? 4) Are you planning on buying another home in the area /out of state /etc.? 5) How are you marketing your home warranty? 6) Do you need and want a “prequalification security screen?” (pre-approval of buyers for safety) 7) How did you determine your price? 8) How long has your home been for sale? 37 NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS 39 NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER 40 NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS NAME FIRST VISIT SECOND VISIT ADDRESS HOME OWNER Yes No CITY REFERRED BY NEWSPAPER STATE ZIP FRIEND HOME MAGAZINE DAY PHONE ( ) SIGNS DRIVE BY EVE PHONE ( ) OTHER COMMENTS 41 NAME NUMBER ALT NUMBER DATE OF CALL 43 NAME NUMBER ALT NUMBER DATE OF CALL 44