For Sale By Owner � Do You Really Need an Agent

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posted:: 1/11/2009
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For Sale By Owner – Do You
Really Need an Agent?

Speaker : Tom Hart

Use: Spacebar and Backspace to Navigate Esc to EXIT
Estimated Costs
Seller Buyer
 Title Fees / Escrow  Title Fees / Escrow
 Owners Policy $871*  Attorney Fee $250
 (Based on $100,000)
 Escrow $175
 Policy Guaranty $1.00
 Recording Fees $60
 Escrow $175
 Deed $100  Policy Guaranty $1.00
 Tax Certs $38.50  Lender Fees
 Commission  Loan Origination – 1%
 Concessions $$$  Lender Fees $485
 Payoff – Current Loan  Insurance - Hazard
 Tax Prorations  Prepaid – Taxes and Ins
 Home Warranty $305  Down Payment $$$
 Repairs  Appraisal $350
 Termite Inspection  Survey $350
 HOA Transfer and Resale  Upfront per diems
Certification, if applicable  Home Inspection $300
Personnel required in the Process

Buyer Title Company
Negotiator Handy Man
 Buffer in between HOA Info, if applies
Appraiser New Lender
Termite Inspector Current Lender
Home Inspector Attorney
How Do I Know What is a Fair
Market Value for My House?
Get Comps
 What have the neighbor’s houses SOLD for
 not necessarily what John SAYS he sold it for
 From real estate agents
 Title Companies
Appraisal
Tax Records
Look at your house in comparison to the others
in the neighborhood. How does it REALLY
compare? BE OBJECTIVE!
Optimizing the sales price is the most crucial
factor, with current market conditions.
Testing the Market
“Honey, let’s price the house $25,000 over
where we think it will sell or where our
appraisal is to give us the margin to negotiate.”
 Today’s buyers are sophisticated. They are as
smart as you. They may know as much as you do
about the neighborhood.
 Typically, this will get you exposure and then ignored. If
people believe your property is overpriced, they will not
even look at it. If you take this tactic, then when you
decide to lower the price, buyers will think there is a
problem with it since its been on the market longer.
 If the buyer believes your property is fairly priced, you will
sell quickly. Put it on the market to SELL.
So, you’ve Decided to Sell Your
House Yourself, Now What?
Marketing Strategy Sellers Disclosure
 Flyers /Graphics Concessions
 Newspaper Ads Information for
 Signs Buyers
 Mailers Web Sites
 Open House Agents
 Virtual Tour Magic Bullets (Later)
Flyers – Use the KISS Principal
Keep it Simple Stupid
List Important Don’t List
Features  Washer / Dryer
 Square Footage hookups
 No. of Bedrooms  Electrical outlets
No. of Bathrooms

 Seller willing to
Garage Spaces

negotiate, Seller
 List Price flexible / price
 Other important firm, easy terms.
features like
remodeled. Unless you really
 New A/C or other want ridiculous
recent repairs. offers.
Newspaper Ads
What is your target market?
 Metro/Local newspapers
Say something to get the attention of the buyer.
More than just “3 bedroom, 2 bath house for
$137,500 in Plano, call John at 972-xxx-xxxx.”
What would get them to want to call on your ad?
List what makes your property special such as
special financing terms or seller assisted
financing. Separate your property from all the
others to be effective.
Mailers
Mail to your local neighborhood
 Put on the mailer “Here is the chance you have
been waiting for! Here is your chance to PICK
your neighbors!”
Mail fliers to a nearby apartment complex by
individual resident. Address it “Current
Resident” on the address. You do not have
to know who they are.
 Get the lease rates they are paying and show
the tenants that for what they are paying they
could OWN your home.
 Show them the benefits of homeownership
Concessions
If you offer some form of concessions in your
advertising, generally you will sell the
property about 43% faster than if you do
not.
 Examples are: Offer to assist the buyer in
paying some of their closing costs. (You may
actually raise the sale price to do this if you are
careful.)
 Offer to pay for appraisals, home warranties, or
some other cost.
This type of advertising will get a buyer to
WANT to purchase your property faster than
the one across the street who offers nothing.
Even if yours is a little more expensive.
Websites
ForSaleByOwner.com
ByOwner.com
BuyOwner.com
NorthTexasRealEstateNetwork.com
FSBO.com

This list of Web Sites is only an example.

All can get you exposure and even have the ability to give you
MLS coverage if you are willing to co-broke with the agents.
 Certain fees apply. This application is currently being investigated
by the State of Texas Attorney General as to it’s legality.
What you need to present to a
prospective buyer
Proposed payment schedule.
 Work with a lender such to give you a
breakdown of 0%, 5%, 10%, 20% down
programs on a spreadsheet for payments.
 Include, principal, interest, taxes, insurance and
homeowners association dues if applicable.
Have an idea what the total out of pocket
closing costs will be for a buyer or what is
called a Good Faith Estimate (GFE).
FOR SALE
One Room with Inside Plumbing , 1 story, Gorgeous Scenic View

Truth in Advertising - Take a Break
FOR SALE BY OWNER
OPEN HOUSES
Two people for this activity
Safety issues
Kids alone
Tag Teams
Double edged sword
 Do not be offended by comments
 Do not talk to much - LISTEN
Notice About
OPEN HOUSE Signs
Check with your local municipality regarding signs on major
streets, intersections and roadways

If you place your directional sign between the sidewalk and
the road, you may find it missing when you go to look for it
after your open house. You may believe someone has “stolen”
your sign

It may have been picked up by your local Street Service
Department for the city

If you place your sign on the inside of the sidewalk, you may
want to ask permission from the homeowner to do so. They
would greatly appreciate the courtesy of you asking for the
permission and be less likely to remove your sign
Who Stops at FSBO
Open Houses?
Curious Neighbors
Bargain Hunters
Investors
“Drive bys” just going down street.
Thieves casing the house for valuables or
medications
POSSIBLY – an actual serious buyer.
Local Real Estate Offices
-- Agents

If you are willing to Co-Broke,
 or pay an agent commission, then drop
off some fliers to the local real estate
office
Disclosures Needed

Lead Based Paint – HOA Addendum – If
if property was built you have a
prior to 1978. homeowners
Seller’s Property association.
Disclosure – Noting Survey.
any problems or Termite Inspection
repairs made Report Required
Financing prior to closing.
Addendum
Surveys, What to Look For
New easement = new survey
Clean survey, with NO changes (new pool, fence, etc)
Look for:
 Date of survey
 Signed by surveyor
 Stamp of Surveyor
 Building Setback lines
 Easements such as utility easements.
 Fence Lines. Do they follow the property line?
 Typically not
 Legal description of lot and block or meets and bounds
description.
Title Insurance
Why Do I Need It?
Protection for you as the seller against
not having a clear title.

 Mechanics Liens
 Judgments
 Tax Liens – Federal, School or County
 Special Assessments
Home Service Warranty Contracts
What they really cover and how to
assure the buyer items will be covered.

A/C - FURNACE
 If over 15 years old, have units it checked by a
licensed Heating and A/C Technician. Or any other
older item in the property
 Plumbing, electrical,water heater, dish washer,
oven/range, disposal, etc.
 Contact home warranty companies for details
Dealing with Buyer’s Agents

Buyers Agent writes the Offer to Purchase
State commission to be paid
Concessions such as paying part of a
buyer’s closing costs are put IN the
contract
Don’t volunteer to do the AGENT’S Job!
Understand conditions BEFORE you SIGN
AGENT represents the BUYER not you
Before You Write the Offer…

Make sure the buyer has: DON’T Write
 Applied for loan  On a PRE qualification
approval!
or approval Letter or
 ALL terms are agreed to
and understood buyer has not talked
 Who pays for what fees. to a Mortgage person
 Title insurance,  If the buyer needs
lender fees,
inspections, permission from
survey, someone else, such
drafting of documents,

and all the other fees
as a spouse, parent,
involved. boyfriend or other
What Makes a Binding Contract
Completed Contract and All blanks filled in
addendums in Writing
Consideration must be All terms written
paid – money received. out clearly
Option money? paid Removal of
Executed date contingencies
Closing date
Commissions to be
ALL signatures / Initials
Legal Address – Needs to
paid if any
include Lot, Block and Service contracts –
subdivision, plus the Home Warranty
Address, county, city,
state and zip
Magic Bullets
This is the one you all have been waiting for!
What is the ultimate magic bullet to sell your
property?
 There are no magic bullets! Each property will sell
when the right buyer makes the offer on it.
 This is why we do multiple marketing efforts to get
exposure for your property.
 Your house will sell when the RIGHT buyer comes
along. Maybe it will be today, maybe it will be
tomorrow.
Should You Consider
Using an AGENT?
Pros Cons
 Agents write contracts  Paying commissions
 Appointments for  Time commitment –
 Property Listed under
showings contract.
 Pre-qualified buyers  Cost of advertising
 Buffered Negotiations  Open houses
 Advertising paid  Qualifying buyers
 MLS access by all  Have a plan
agents with buyers  Direct negotiations
 With buyer or buyer’s
 82% sales rate thru agent
agents contacts  NO MLS Access
Reason for Selling Home As FSBO
Did not want to pay commission fee: 61%

Sold it to a relative / friend / neighbor: 17%

Buyers contacted seller directly: 9%

Did not want to deal with an agent: 6%

Have your own real estate license: 2%

Agent was unable to sell home: 2%

Could not find agent to handle transaction: 1%

Other: 2%

Source: (NATIONAL ASSOCIATION OF REALTORS® - Research, 2004)
Typical For Sale By Owner

80% of FSBOs list with an agent after
about 45 – 60 days
Typically 66% of FSBOs list with the
FIRST real estate agent they meet
after this time period
 If you decide to hire an agent, hire a
competent one. A Licensed Professional
REALTOR® who knows what to do
LETS DO SOME MATH
If 1000 properties put on sale are FSBOs

Fewer than 10% of the FSBOs will sell by Owner

Over 90% of FSBOs will end up listing through a REALTOR®

1000 Total properties put on Market
* 10% Still not listed by a Realtor®
= 100 For Sale by Owner properties
- 90% End up Sold by a REALTOR®
10 Properties will sell by Owner

That’s about 1 out of 10
Notice Regarding Contract Forms

• As public records, the contract forms adopted by the Texas Real Estate Commission are available to any
person.

• However, TREC contract forms are intended for use only by licensed real estate brokers or
salespersons who are trained in their correct use. Mistakes in the use of a form may result in financial
loss or a contract which is unenforceable.

• If you are obtaining the forms for possible use in a real estate transaction, you should contact a real
estate licensee or an attorney for assistance. TREC cannot provide legal advice to the public on private
contractual matters

TREC does not promulgate listing or buyer representation agreements, property management contracts, forms for
commercial property, or residential leases (other than temporary residential leases used in connection with a sale).
Contact your attorney or a trade association for such forms.
Survey – How did you enjoy
this seminar?

In your package at the back is a survey.

 We strive to provide you with the information you
desire. Let us know how we did.

 Please rate us on this presentation.

 Thank you for your time
THANK YOU FOR ATTENDING
Speaker : Tom Hart Broker
GRI, ABR, RFS, IRES, ILS

KELLER WILLIAMS REALTY
Frisco, Tx