My husband and I recently found ourselves in a position where we needed to find a bigger home. We have a growing family and we needed more space, along with bedrooms. The problem was that money has been tight and we really needed to sell our house first to have a down payment for the next. We looked at listing with an agent and realized that we were looking at 6% of our selling price going to realtors. With what was left on the mortgage that didn’t leave us with a lot for a down payment for our next house because we have only lived in our current residence for only about 6 years. It turns out that all of those payments were only paying on the interest and hadn’t really touched the principal.
So long story short, I talked to one of my girlfriends and she had recently sold her house – without using an agent! She said it really wasn’t that difficult and I was smart enough to sell my own property as well. So I thought I’d write about my experience as well as give you some helpful info just incase you want to sell your home yourself as well. 🙂
Selling Your House By Owner
What really makes it possible to sell your house yourself is the internet. Without making use of it, you maybe stuck with your house for awhile. There were really 2 big things that we had to take into consideration – pricing the house right and the closing documents.
Pricing your house right is extremely important. Price it to high and you won’t have any interested buyers. Price it too low and you are leaving money on the table. Again, because of the internet this is a lot easier to do. I found some good info from Zillow about how to price your house:
1. Look at your Zestimate — Depending on whether you feel your home’s Zestimate is as accurate and up-to-date as possible, use this figure as your starting point.
2. Update your Zestimate — Confirm your home facts on Zillow and make any edits as needed. If you have made improvements to your home, make sure those are included in your home facts. Updates to your home facts will be factored into your home’s Zestimate immediately if the change is significant enough to impact your Zestimate.
3. Use your comps — With every Zestimate, Zillow offers a set of comparables. Look these over and if you have created a good set of comps, get the average sold price from them. Your asking price should be within 10 percent of the average sold price in your neighborhood.
4. Find a “magic” price — Once you have a target in mind, think about prices that motivate people more than others. For example, if you have a target figure of $305,000 in mind, think about setting it at $299,995. This way, you will capture people who do range searching (e.g., $250,000 to $300,000) Also, there’s a proven psychology that items priced just under a “century” number are more attractive to the buyer. Think about shopping in a department store. How many times do you see prices for $9.95, $19.95, and so on? These prices have a psychological “come hither” affect — they don’t trip those thresholds of $10 or $20.
5. Find the “soft spot” — Also called “price banding,” this is the practice of looking over the inventory in your neighborhood and finding the “soft spot.” For example, look at the sale prices of homes in your neighborhood. Prices tend to get bunched up as inventory moves along. Find an empty spot so your home is separated from the pack. For example, four homes are priced in the $274,000-$276,000 range and the next set of homes start around $290,000 and up. You should take advantage of the $280,000 price band.
When pricing your home be sure and look at houses that are identical to yours, or close to it. This will ensure you are pricing your house right. Also look at homes that have recently sold – like from 6 months to a year.
We decided to use an attorney to help us get our house sold. We live in a state where you have to use an attorney, and I was more than happy to do so and turn it over to her. When I started researching it online, it was enough to make my head spin. And I don’t understand all of that legal jargon either.
Much to my surprise, some states don’t require you to use an attorney. I really wonder how many of those real estate deals go bad without one. Anyhow here is some good info about using an attorney when you sell –
The purchase agreement is the single most important document in the transaction. Although standard printed forms are useful, a lawyer is helpful in explaining the form and making changes and additions to reflect the buyer’s and the seller’s desires. There are many issues that may need to be addressed in the purchase agreement; below are some common examples:
- If the property has been altered or there has been an addition to the property, was it done lawfully?
- If the buyer has plans to change the property, may what is planned for the property be done lawfully?
- What happens if a buyer has an engineer or architect inspect the property and termites, asbestos, radon, or lead-based paint is found?
- What if the property is found to contain hazardous waste?
- What are the legal consequences if the closing does not take place, and what happens to the down payment? This question raises related questions: Will the down payment be held in escrow by a lawyer in accordance with appropriately worded escrow instructions? How is payment to be made? Is the closing appropriately conditioned upon the buyer obtaining financing?
Most buyers finance a substantial portion of the purchase price for a home with a mortgage loan from a lending institution. The purchase agreement should contain a carefully worded provision that it is subject to the buyer’s obtaining a commitment for financing.
There can be a lot going on when selling your house. I personally think that using an attorney can help save you a lot of headaches and maybe even possible lawsuits in the future.
So there you have it. Probably the most 2 important things when selling your house yourself. Thanks to the internet, you can do it yourself. It does make me wonder if high priced realtors are going to go the way of the dinosaur. Maybe not for the rich – but for the little guy – maybe.
There is a lot more, like getting the house ready itself, open houses, marketing and more, and maybe I’ll cover that in another post. In the meantime check out some of these other articles and sites to help you sell your house yourself –