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"10 easy steps to FSBO your house"
Old 05-31-2006, 02:28 PM   #1
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"10 easy steps to FSBO your house"

Quote:
Originally Posted by CCdaCE
Nords. Post your "10 easy steps to FSBO your house" if you're bored. I'm thinkin' of dumpin' mine in the next year or two.
Well, I'm not bored but I love the subject.

Some of this has come up before. The board's "Advanced Search" feature lets you find keywords by specific posters. Click on the "Search" button at the top of the page and then select the "Advanced" option. Here's a couple threads:
http://early-retirement.org/forums/i...73899#msg73899
http://early-retirement.org/forums/i...0463#msg110463

"Easy"? No problems, and only one step: Hire a realtor and do whatever they tell you to do. Don't question their credibility or their judgment-- that's not "easy". Just blissfully follow orders and give them whatever they ask for, including their 6% share.

You've asked a timely question-- a couple years' head start is a good way to prepare by spending an educational hour or two a week in an experiential yet entertaining manner. By the time you put your home on the market you'll either be fascinated with the subject, or so disgusted by it that you won't hesitate to pay a realtor.

I think it takes a certain personality & risk-taking mentality to do a FSBO. Successful used-car sellers will probably do fine. FSBO involves a lot of legal pitfalls, emotional surprises, and the patience of Job. It might be easier (and neater) to slaughter your own hogs or do your own sewage plumbing. I'm not a lawyer and my advice might be fraught with unexpected problems or things that seem unwise. I don't care whether or not people think it's a good idea or a safe idea or even a totally legal one. (I'm not dishonest or unethical.) I'm only pointing out that this is how we've sold homes in the past or would do so if we had to again. This worked for us or, in our judgment would have a high probability of working. If you don't agree with that then you don't have to do it. If it didn't work for you, well, we have no way of figuring out if you did it right or if you gave it enough time for the right customer to come along. I might be opinionated but I'm not wrong. Read Martha's & TH's disclaimers for additional details...

Harder steps 1-10 to FSBO:
1. Record & watch "Buy Me". (Some scenes will have to be replayed several times to be believed.) Do pretty much the opposite of anything done by this show's owners or realtors. They're stunning examples of negative experience that will suck the very IQ out of your cerebral cortex, but they're the kind of people with whom you're gonna be spending a lot of quality time-- "customers" and "buyer's representatives".

2. Record & watch "Flip This House". Pay attention to the way that he never lets a fraction of a percentage point stand in the way of a deal, and how he apparently leaves a lot of money on the table to build goodwill. At least it seems like a lot of money at the time, but as a percentage of the actual deal (or a future relationship) it's a bargain. Also pay attention to the way that he never lets emotion rule the budget. It's either worth doing or it's not, learn from your mistakes, get 'er done, fix it, sell it, and get on with the next deal. I think this guy is a modern example of The Millionaire Next Door.
2a. If you have the time & intestinal fortitude then I'd also watch "Curb Appeal" for an idea of what might need to be done with your place-- as long as it's under $2500. Total.

3. Read a good FSBO book. Nolo's "For Sale By Owner" used to be the undisputed reference manual and I think they still have an edition for California. This one seems to be a good representative of the genre, but read three or four of them and pick the one that resonates with you.

4. Start visiting at least one open house every Sunday afternoon. It ideally should be a property similar to yours in size, neighborhood, amenities, and sale price. Try to hang around for 20-30 minutes watching how the realtor does (or should do) their thing. Collect their business cards and watch their newspaper ads. See how the owners prepped their homes and what seems to be working (or not working!) for the realtor and for the sellers. Listen to the comments of the lookie-loos as they walk through, and remember that they're your valued customers. Try to see at least 100 open houses over the next 12 months. (FSBO is hard work.) If this seems unachievable then it will be-- so get a realtor.

5. Keep a loose-leaf journal of your thoughts & observations from steps 1-5. Save a few pages in the front of the journal for lists of "What Works", "What Doesn't Work", "Questions To Research", and "To Do". You're gonna use these lists to prepare for your first open house. This is where you'll record your thoughts, impressions, & actions immediately after each of your open houses.

6. Learn more about real estate listing mechanisms in your area. MLS is still the 800-pound gorilla but other websites (Craigslist, eBay) are gaining fast. Consider whether it's worth paying blackmail an MLS listing fee or whether to network on your own. A newspaper classified ad might still be the local custom or you might be totally online.

7. Find sales contracts for your area. Websites from the local government or realtor's association might have samples. If you're at an open house, ask a realtor for a blank one (the answer might be yes, it's usually "Oh, we don't have any here", but you might get lucky). Make sure you understand the various clauses & contingencies and how you'll be using them. Have extra copies to lay on your table at your first open house.

8. Find a good title company in your area, an appraiser, and if required a lawyer. The buyers might not have any idea who they should work with and you can drive the deal by telling them who you'll be using. (These professionals might also hand out blank sales contracts.) A lot of negotiating can be sidestepped by splitting the cost of an appraiser and letting the appraisal determine the sale price.

9. Stop being a homeowner and start being a house seller. If you can't look around your piece of crap house to be quickly unloaded on the nearest or stupidest buyer lovely home without getting sentimental, then get a realtor. You're flogging a depreciating commodity on valuable land, not a Disney-heartwarming experience. Your house is not "worth" anything other than the time & effort required to dispose of it. For example, if you're offended by a buyer's comments or insulted by a low offer then you're not the right type of personality for a FSBO. If you see that as the negotiating tactic that it is and quietly counteroffer while looking for a better buyer then you'll probably do fine. If you find yourself saying "Oh, no no no, that's a high-quality kitchen appliance worth $2398.75!" then get a realtor. If you can shrug your shoulders and say "We've felt that it's done a fine job for us, but make us an offer" then you'll probably be OK. If $10K is an issue, then see if it's as important as staying on the market another month or two.

10. Be mentally ready for six open houses before you get an offer. You may have 10 of them before you're in escrow. Be ready to pay a realtor some amount of money (3%?) if they bring you a full-price closing. Be patient, pleasant, and cheerful but do not be talkative-- let your customers & realtors tell you what they're thinking. Your counteroffer will do the talking.

If you decide to go this route, here's a few other things that have saved us a lot of time & angst:
- More customers are available in summer when schools are out and businesses are hiring graduates. You'll probably do better in April-September than during November-February.

- The first keywords in all your listings should be "For sale by owner", followed by #bedrooms/#bathrooms, square footage/acres, price, address, and phone number. Don't write like a lyrical realtor, just spit out the facts. Refer to your website for more details & photos.

- Have a one-page fact sheet with a floor plan (to scale), the community/model's name (if applicable), and data similar to what's in the MLS fact sheets. Add your website's URL. These poor overwhelmed buyers are going to appreciate your fact sheet when they try to sort out a dozen listings that they've seen over the weekend.

- Have a big "FOR SALE BY OWNER" sign on your front yard, with a clear plastic container holding your fact sheets.

- Don't use "Open House" signs. Get the biggest, brightest "FOR SALE BY OWNER!" signs you can find and blaze a trail of them all the way to the major intersections. (Floodlights & fireworks are optional. This may require a dozen or more signs, and you'll need to practice the setup on a day before the open house.) Hold open houses when your neighborhood is typically doing them (Sunday afternoons) and, if you're available, when the realtors are out in their caravan (Wednesday mornings). The realtors will generally waste your time but one of them might bring you the buyer-- and all it takes is one realtor/buyer plus a lot of your patience.

- You're not just a homeowner anymore, you're an on-call sales staff. Be 15 minutes away from an impromptu showing every day all month 8 AM-8 PM. People will call you from your driveway on their cell phones. None of our buyers came to our open houses-- they were surprise drive-by showings.

- Depersonalize your house. Strip out all valuables, collectibles, family photos, things that absolutely aren't included with the sale, and pilferables. Furniture is optional. If it's still in the house and not moving then you'd better be ready to throw it into the deal, Aunt Sally's antique armoire and your spouse included. You're too busy trying to sell your house to keep an eye on things that aren't for sale.

- Declutter. If you have a trusted friend or relative who's Navy or Marine (someone who knows how to stow for sea), then ask them to tell you what's still cluttering up the place. Toys, reading materials, and any other buyer distractions should be neatly put away-- out of sight if possible. If it's a horizontal surface, ask yourself if it really needs to be holding up anything. If a room has a door then you should be proud to leave it open. Smart buyers will be looking at ceilings, corners, floor joints, plumbing, & electrical as well as appliances or other infrastructure.

- As part of the declutter project, attempt to empty your closets, garage, and attic. Even the cost of temporary storage for a couple months will be a bargain. Buyers will be astounded at how much storage space you have and they'll mentally start inserting their own crap onto your cavernous shelving.

- Kids & pets do not belong at open houses. At best they're a distraction, at worst they scare the customers-- or maybe even bite them. Don't just lock them into a room where people might feel that you're hiding something. Sell 'em or give 'em away. You can always retrieve (or replace) them later.

- Turn off the TV and sound systems, shut off all computers, and do not put potpourri or baked goods in various strategic locations. You're flogging real estate, not entertaining your buyers or throwing a big-game party. When I see these tactics I think "Oooooh, good, an amateur!" or "Am I interrupting?" or "What are they trying to hide?"

- Don't follow the lookie-loos around helpfully pointing out features that they may have missed or failed to properly appreciate. (Few things piss me off more than this.) You're not a tour guide or a security guard or a teacher. Plant your butt in the kitchen or diningroom and stay there unless specifically asked a question. Keep the answer pleasant, on topic, and short-- then find a reason to hustle back to the kitchen or diningroom. Let people wander around imagining how they'll fit into the place without you disturbing their thought processes. They know where to find you.

- Have a full disclosure sheet ready to hand out if asked. Have a copy of the community rules & regs available for browsing.

- You're looking for an educated buyer who knows the market and knows what to do-- someone who'd be just like you are if they were selling their own house. You're only interested in finding that one person and you only care about all the others to the extent that it takes you to verify that they're not your buyer. Do not, I say again DO NOT attempt to educate your buyers. If they ask "We like it, what's next?" then hand them a contract to fill out. Don't explain the process or help them with it-- if they have questions then suggest that they get a realtor. Your real buyer won't need a blank copy of a contract, but they'll appreciate seeing that they're dealing with someone who knows how to get a blank copy of a contract.

- Fix your home to minimum standards-- no leaks, all items functional, no undisclosed damage or other issues. If the carpet or walls or exterior or garage door or appliances are truly sucky or non-functional then purchase suitable replacements/enhancements, but don't go crazy. DO NOT add wallpaper or other "décor" upgrades that will be hard to remove or paint over. Don't "re-do" the yard or other landscaping unless it's dead or presents a clear danger. People, especially FSBO buyers, want to decorate their own houses & land and they probably don't like your choices anyway. Give them something to find fault with and let them negotiate it away. We've actually been in escrow with sellers who kept trying to fix things, and we finally had to ask them to stop it or to pay for fixing their "repairs".

- If you have a pool then the only customers you're interested in are pool people. You can't convert your own, you'll have to wait for them to show up. Anyone who asks about your pool's dangers or who isn't enthusiastic about it is not going to buy your place, so don't waste your time trying to convert them to the pool lifestyle. Simply say "If you haven't owned a pool before then it can be quite a responsibility to consider" and move on. Same for other special features like an RV garage, a boathouse, a whirlpool tub or hot tub, or an exotic landscaping feature. The customer worth noting is the one who says "Oh, cool, a ___!!"
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Re: "10 easy steps to FSBO your house"
Old 05-31-2006, 02:53 PM   #2
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Re: "10 easy steps to FSBO your house"

Quote:
Originally Posted by Nords

- Depersonalize your house.* Strip out all valuables, collectibles, family photos, things that absolutely aren't included with the sale, and pilferables.* Furniture is optional.* If it's still in the house and not moving then you'd better be ready to throw it into the deal, Aunt Sally's antique armoire and your spouse included.* You're too busy trying to sell your house to keep an eye on things that aren't for sale.

When we sold our cabin, we had it very clean and decluttered, but with a few choice items laying around (like the WSJ, kayaks) to make it look like rich, sophisticated outdoorsy people owned the place. Maybe silly but I thought it might build some desire in people who didn't have a cabin to want to buy into the "lifestyle."

Am I cynical?
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Re: "10 easy steps to FSBO your house"
Old 05-31-2006, 02:58 PM   #3
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Re: "10 easy steps to FSBO your house"

Quote:
Originally Posted by Martha
When we sold our cabin, we had it very clean and decluttered, but with a few choice items laying around (like the WSJ, kayaks) to make it look like rich, sophisticated* outdoorsy people owned the place.* Maybe silly but I thought it might build some desire in people who didn't have a cabin to want to buy into the "lifestyle."*

Am I cynical?*
Nope, you just knew a thing or two about marketing.

When we FSBO's our condo I knew it would look a little cramped. So we rented a storage unit in the area we were planning on buying in and brought a carload of crap every time we went house-hunting. Made the place look much bigger and it sold quickly. Not sure I would want to repeat the experience, though.
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Re: "10 easy steps to FSBO your house"
Old 05-31-2006, 06:52 PM   #4
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Re: "10 easy steps to FSBO your house"

Classical music playing creates a sense of class

The smell of oranges, cinnamon and/or vanilla creates a strong sense of home and connects with positive childhood memories

Clean, neat and uncluttered

No family photos or other personalization that would cause someone to fail to connect to it being "their place"

Nice furniture and/or tasteful artwork. Nothing in the home is better than ugly furniture.

If you have anything that isnt nice, like bad furniture or junk, get it out. Even if its just in the garage. People dont care whats in a garage.

People moving up to their first house from an apartment building will connect better with an empty house; people moving up from one house to another will prefer a tastefully furnished home on showing. Apartment dwellers are used to getting their first looks at an empty place. If you're selling a small inexpensive home and your targets are first time home buyers, empty it.

The marketing piece aside, I'd never buy a FSBO. Generally, the fsbo sellers i've run into are emotional, disorganized, not willing to provide full disclosure, and they're not pricing the home down to share the realtor cost savings with me. So i'm not seeing the benefit to ever even walk through their door unless they have a one of a kind/unique property.
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Re: "10 easy steps to FSBO your house"
Old 06-01-2006, 12:36 PM   #5
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Re: "10 easy steps to FSBO your house"

Ahh, excellent.

Thank You!

-CC
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