Selling Your Home For Top Dollar

HOMEOWNERS GUIDE TO

SELLING A For Sale By Owner

“FSBO”

Forward This book is intended to prepare you, as a homeowner, to sell your home on your own without the use of a real estate professional. You may have heard from other real estate agents that as a FSBO (for sale by owner), the deck is stacked against you. This guide will help you better prepare to sell your home quickly and for top dollar. Depending on your previous real estate experience, some of this material will be redundant. This book is designed for the first time home seller. Selling on your own is entirely achievable, but will require patience, hours of research, and meticulous attention to contract detail. Average days on market at the time this guide was published was roughly 62 days and homes were selling on average for 97% of asking price. Note, as market conditions change, so do selling and marketing strategies. At the time of this guide was published, the real estate market in New York Metro area favored sellers.

This guide will help you avoid so many of the mistakes I’ve witnessed in my career in this business of real estate. After all, selling your home is kind of a big deal. We are a team of real estate professionals helping hundreds of home buyers and sellers in your local market. So why create a guide to help you sell your home on your own without using us? Simple. We collaborate. We are fortunate to have lots of opportunities to help individuals, families, and investors buy & sell real estate. We share our knowledge and experience with you as a trusted resource for sellers in ALL situations because we care and wish for prosperity for those in our community. HausEdge Team *Important: This guide is for informational purposes only and is not to be

considered legal or tax advice. If you have more in depth legal or taxation

questions regarding your specific situation, seek guidance from a qualified

professional in your area.

Table of Contents

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Before You List

Process Basics

Pricing Strategy

Marketing Plan

The Standard

Know Your Buyer

Earnest Money

The Rules

How Commissions Work

Copyright Reserved ©2019, Prime Deal Realty. All rights reserved. Printed in the United States of America. Except as permit-ted under the

copyright act of 1976, no part of this publication may be repro-duced or distributed in any

form, or by any means, without the prior written permission of the publisher.

The Truth About FSBO’s Selling your home as a “FSBO” (For Sale By Owner) for top dollar is no easy task, but it is entirely achievable. FSBO’s have a variety of reasons for not using a REALTOR®, but most commonly, to save on commissions. The National Association of Realtors (NAR) reports that FSBO’s on average sell for 15% less and take 19 days longer than homes sold using a real estate professional. With that said, this guide was created to give you the upper hand in selling your home and help preventing your home from becoming an NAR statistic.

BEFORE YOU LIST

Know Your Home’s Value A solid pricing strategy is key to selling your home for top dollar. To determine your starting price, hire a professional appraiser to value your home. This way you are sure to get an objective opinion of value. An appraisal will cost between $250-$400 depending on the size of your home. This value doesn’t have to be your starting price, but generally you don’t want to stray too far from it.

Get Ready For Show Time! Neatness Declutter your home. Rent a mini-storage unit if needed to help your home show better. Buyers tend to equate a messy home as a house with possible problems. Kitchen When you’re selling your home, your best chance of cooking up a sale is in the kitchen. For today’s home buyer, the kitchen is typically the most important room in the house. A major overhaul in the kitchen probably doesn’t make sense, but you will want to focus on making sure your kitchen shows the best it can.

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BEFORE YOU LIST Odors Offensive odors distract buyers and will derail the sale of your home. If you have pets, or occasionally smoke in your home, spend $100 and buy an ozone generator on Amazon and kill those odors once and for all. Repairs & Improvements Fix the little things. Most buyers will hire a professional home inspector during their due diligence period to ensure the home meets acceptable standards. Proactively getting an inspection means you can get ahead of the curve and complete the repairs on your terms without time constraints.

Sold in 7 Days for $7k Above Ask

PROCESS BASICS During the average real estate transaction, more than 15 people can be involved. In not so many words, here are the basics of your upcoming sale.

The Deal The process is simple. You list your home for sale and market it with all you’ve got. A buyer sees your home and writes an offer. You come to terms with that offer. Once you have an accepted purchase contract, you enter the escrow period and eventually reach the finish line. SOLD!

List Your Accept Escrow Close the

Home Offer Deal

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PROCESS BASICS Once you have an accepted contract and you’re in escrow, most buyers will order an inspection during their due diligence period. It’s common that your buyer will request you complete certain repairs (or offer a credit) on your home. Once you’ve come to terms with the repair request, the next step is the appraisal (if financing is involved). If the appraisal comes in low, meaning the fair market value of your home is less than the contract price in the eyes of an appraiser, you’re back to the negotiating table. Take a deep breathe. If you’ve made it this far, there is a 98% chance you reach the finish line!

The Key Players Most real estate transactions are going to involve six key players starting with you, the seller. Then we bring in the buyer, the mortgage lender, home inspector, independent appraiser, and finally, Title and Escrow. Each party in the process is working towards a successful sale of your home.

1. Seller 4. Home Inspector

2. Buyer 5. Appraiser

3. Lender 6. Title / Escrow

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PRICING STRATEGY The price and condition of your home are the two most important considerations when it comes to getting your home sold. You can set the price, but the market always sets the value.

Leverage Which of the two scenario gives a seller more leverage? A home that’s on market for 3 days with 3 offers in hand or 48 days on market with one offer in hand? With the right pricing strategy, you will see multiple offers resulting in more equity in your pocket. Underselling homes in today’s market is rare.

The Market Doesn’t Lie: Listen In a traditional sale, we usually see an offer after 6-8 showings. If your home is on market for 12 days without a single showing, or has 30 prospective buyers through the door and no offers, you have a pricing problem. If showing traffic doesn’t exist, or if traffic is healthy with no offers after 12 showings, your buyers are finding value elsewhere. Consider a meaningful price reduction of $10k-$20k to get closer to market value.

Appraisal Issues We often hear “start high so I have room to come down.” This strategy isn’t the most effective approach. Even if you do find a buyer for your home at a high price, if the buyer is financing the home (most do), it still has to appraise at your price. If your home appraises for less than the contract price, your buyer needs to be strong enough to bring cash to the table or you may have to reduce the price to keep the deal moving forward.

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PRICING STRATEGY

How The Pros Do It Most experienced real estate professionals will recommend starting as close to the estimated market value as possible, or possibly 1% to 3% above if it’s a sellers market. The natural tendency is for sellers to overvalue their homes which chews up unnecessary days on market and drags out the process. By pricing close to market value, we will ideally see multiple offers which commonly leads to more money in your pocket!

Contract Price: $399k Appraised Value: $370k

Closing Price: $390k

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MARKETING PLAN Having a marketing plan is key to selling your home fast. It doesn’t have to be complex, but needs to be well defined and diligently executed.

A Picture Is Worth a Thousand Words Pictures are priceless! Having your home photographed by a professional will showcase your home in a much better light and grab the attention of more buyers. The first 5 photos are the most important for your online ad and should show variety. The marquis photo is generally the front of the home, unless you strongly feel another room would highlight your home better.

Harnessing Zillow More than 96% of home buyers begin their search online and Zillow by far has the lions share of viewers. If you’re not already registered on Realtor.com and Zillow.com, create your online profile and begin building your ad. Be precise and interesting in your ad. Host an open house between 11AM-3PM on weekends to increase traffic. Some sites will bump your home to the top when you have an open house scheduled. Adding a video. Also, be absolutely sure to add a profile picture on Zillow & Realtor.com.

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MARKETING PLAN

Get Social If you’re not the Facebooking type, start. Share with your friends that you are selling your home and space out your posts. Once you have created your Zillow ad, you can share the link in your feed, but mix up your content. If you are taking a trip to Home Depot, let the world know. Have a handyman doing the repairs? If they do a great job, give them an online shout out. Not all of your posts have to be directly related to the details of your home, but should tie back to what you are doing. Selling your home.

Time Tested Classics Have a professional For Sale sign printed. For less than $50 online, you can have a custom sign printed with your phone number, pictures of the home, and a website address. If you’re web savvy, feel free to create a website for your property. Create and print fliers for your home. There are tons of resources online to help you create professional fliers.

Where Are Your Buyers? Buyers can come from anywhere, which is why it’s important to be responsive and diligent when vetting your buyers. With that said, 85% of your buyers will come from one of three sources. The Internet, a real estate agent, and a yard sign or open house sign. In fact, in 2018, the internet brought 45% of buyers, agents had 33%, and yard/open house signs contributed about 8%.

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THE STANDARD Every sale is different, just as every buyer is different. Below are a few industry norms/ standards to consider. Be sure to read and understand all legal documents. In a traditional sale, your real estate agent handles all legal documents. When selling as a FSBO, consult a real estate attorney when needed. 1% Earnest Deposit Buyers deposit funds with an independent 3rd party during the escrow period. This signifies in good faith, the buyer intends to purchase your home. The earnest amount can vary, but 1% of the purchase price is generally a good rule of thumb.

10 Day Inspection Period Most buyers will hire a professional home inspector to evaluate the condition of their future home. Although this period can vary, the standard NYS Department of Real Estate purchase contract defaults to 10 days.

30 Day Escrow Escrow periods exist for buyers and sellers to get all the moving pieces into place for the eventual home sale. This period can certainly vary, but 30 days is a good rule of thumb. Avoid lengthy escrow periods to increase the probability you reach the finish line

Seller Buys Home Warranty By no means is the seller obligated to purchase a home warranty for a buyer, but it is common practice in our market today. A home warranty protects the new buyer against costly repairs if something breaks in the home the first year. For the seller, it’s added piece of mind that they won’t be getting a call in 2 weeks because the air conditioner died. Buyer Pays For Appraisal Seems like common sense right? Why would the seller pay for a buyers appraisal? The purchase contract specifically calls out who is paying for the appraisal. Watch out for this as it’s easily over looked.

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KNOW YOUR BUYER No, you don’t have to be best buds, but knowing the financial strength and qualifications of your buyer is absolutely essential.

Buyer Pre-Qualification Do not accept an offer unless you have verified that your prospective buyer is pre-qualifed up to, or more than, the sales price of your home. Lenders will provide a pre-qualification form showing you what steps have been taken and what information has been verified. Lenders should also periodically update you on the loan status throughout the escrow period. If you are working with a cash buyer, be sure to obtain a proof-of-funds letter.

Wholesale v. Retail In the world of real estate, there are many ways to earn a paycheck, a strategy gaining in popularity recently is wholesaling. In short, a wholesaler will tie up your property under contract for specific price and timeframe, then shop your home to other buyers with the goal of selling the contract for a profit. In other words, a wholesaler never intends to take possession of your home, they simply identify mis-pricing in the market place and attempt to capitalize on it. Be sure your buyer has the buying power to purchase your home.

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EARNEST MONEY Earnest money is held by a title or escrow company for the duration of escrow. Unfortunately, these funds aren’t yours yet! There are three main ways a buyer can protect their earnest money.

1 Inspection Period

During the inspection period, typically 10 days, a buyer has the right to

cancel the purchase contract outright, request seller repairs, or accept the home as-is. If the buyer elects to cancel the contract during the inspection period, earnest money is returned to the buyer.

2 The Appraisal

Most lenders will conduct a formal appraisal on your home to determine

the market value in its current condition. Appraisers are generally independent contractors hired by the lender to ensure the asset (your home) is sufficient collateral for the loan they are providing. If the home appraises for less than the contract price, the buyer can cancel the purchase contract and receive the earnest deposit back. More commonly buyers and sellers renegotiate the terms of purchase rather than cancelling.

3 Final Loan Qualification

If a buyer makes it through the first two steps only to find out he/she no longer qualifies for the home loan, the contract is cancelled, and the earnest money is returned to the buyer. Shifts in interest rates, a job loss, or new car purchase can all impact a buyer’s eligibility to obtain financing for your home.

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THE RULES Here are a few guidelines and etiquette to consider as you work your way through the home selling process. From our experience, these tips will lead to less irritation in the long run.

Showings Don’t make it weird. More than 90% of buyers will tell you that it’s just plain awkward when the seller is present during a scheduled showing. Let them focus on the home, not you locked in your office or giving a full tour. If your prospective buyer is un-represnted, arrange to have a friend or family member be present during the showing. If the buyer is using a professional REALTOR, be sure to obtain their contract information before the showing.

Inspection During the inspection, we recommend leaving the home. This ensures the inspector can focus entirely on the job at hand and your buyers to be more comfortable during the walk through. We’ve seen situations where the homeowners presence appeared to have an adverse impact on the final inspection report.

Appraisal Appraisers are historically stubborn. Once an appraiser provides an opinion of value using their set formula, rarely will they change that opinion. For this reason, you should provide all pertinent information to the appraiser to help them find value. For example, provide local comps in your neighborhood that have sold in the past 6 months, show multiple offers if applicable, and highlight the amount of traffic your home generated. Also be sure the appraiser is familiar with your local area.

Collaborate If you are cooperating with buyers agents by offering a buyer-broker commission (which we strongly recommend), work with the buyers agent as a collaborator. They want to get to the finish line as well. Too many times, even amongst agents, there are unneeded adversarial undertones to negotiations. But always remember, a good buyers agent is always looking out for their clients best interest.

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HOW COMMISSIONS WORK The main driver behind homeowners wanting to sell FSBO is to save on agent commissions. Lets face it, paying 6% to sell a home adds up. Remember, commissions are always negotiable and here’s how they work.

Traditional Sale With a traditional sale involving 2 agents, a buyers agent and a listing agent, the seller normally pays between 5%-6% in commissions. On a $400,000 home, that can be as high as $24,000! And this doesn’t include the title and escrow fees that can be roughly 1% of your home’s value.

Listing Agent Buyer Agent

$12K 3% $400K 3% $12K

Selling Agent Buyer Broker Comp This is an important one. The selling agent, or buyers agent, earns their paycheck when they bring a buyer to the table for your home. This amount can vary, but its common to see between 2.5% and 3% in todays market. As of September 6th, 2019, there were 14,127 homes listed offering a 3% co-broke and 213 offering more than 3% in the New York metro area. Most people wouldn’t show up to work if at the end of the day, there wasn’t a paycheck. This principle applies to real estate agents representing home buyers. It is important to consider this factor into the equation.

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MISTAKES TO AVOID Avoid these costly mistakes and sell your home faster and for more money. Over Pricing Your Home We may sound like a broken record here, but pricing is KEY! Remember, you can set the price, but the market sets the value. If your home is priced too high, it’s going to be a while before it sells. There may well be a better offer lurking out there somewhere, but evaluate each with care. Consider an MLS listing only service if you feel your home isn’t getting enough exposure with your current marketing plan. Negotiate With Intent If you happen to be working with an unrepresented buyer, be specific with your terms and deadlines. Do NOT leave a counter offer open ended. If you’re negotiating with a buyers agent, be confident. You’ve done your homework and know what your home is worth.

Be Available Make your home available for prospective buyers. If your buyer is represented by a professional REALTOR, be sure to obtain the agents contact info. If your buyer is un-represented, be sure to arrange for someone to show them the home on your behalf if you’re unavailable. For obvious reasons, we don’t recommend allowing strangers free reign of your home. Not Disclosing Material Facts The Residential Sellers Property Disclosure Statement (SPDS) form is provided by the seller to the buyer and includes all known material facts about the home. New York law requires sellers disclose material (important) facts about a property, even if they’re never asked by the buyer/agent. These disclosure obligations remain even if you and the buyer agree that no Seller’s Property Disclosure Statement (“SPDS”) will be provided. It is advised to be as open and honest about all material facts as possible. If a fault is discovered after the sale that was knowingly not disclosed on the SPDS form, the seller may be held liable and required to either re-purchase the home or remedy the condition. Skipping The Buyer Broker Commission It’s important to consider offering compensation to a broker with a willing buyer. Top producing agents work with dozens of qualified buyers every week. Not offering a buyer-broker commission may limit your buyer pool. Watch Out For Scammers From wire fraud to outright theft, be on the look out for scams. Wire fraud is one of the fastest growing forms of theft amonst the real estate industry. Scammers monitor your inbox for specific terms that relate to real estate transactions.

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RESOURCES

Online Resources Canva.com - Brochure & Flyer Design Fiverr.com - Content/Flyer Design Zillow.com - Marketing Realtor.com – Marketing Streeteasy.com - Marketing Trulia.com - Marketing Craigslist.org - Marketing

Trusted Partners & Vendors Federal Standard Abstract Title

Bell Printing Corp

718.888.7778 718.225.0058

36-36 Main St, Flushing, NY 11354 209-35 Northern Blvd Bayside, NY 11361

NYS Home Inspectors

MI Tax & Insurance Brokerage

Tony Weng, 718.614.1222 Covers Queens, Brooklyn, Bronx, Manhattan, Long Island

Mark Idrees 516.544.8910 320 Post Ave #107, Westbury, NY 11590

HandyMan

Zigna.com (Photography Services)

Ivan 347.520.9415 760.546.9539

Queens, NY 228 Park Ave S New York, NY 10003

Realtor

Attorney

HausEdge 347.956.7654

Diamond Law Group 516.663.5151

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ABOUT HAUSEDGE GROUP

Who We Are We are a team of dedicated real estate professionals headquartered in New York and serving residential real estate clients in the Queens, Brooklyn, Long Island and Manhattan markets. Our diverse backgrounds provide a fresh perspective on a tired industry. We partner with top producing agents and experienced fiduciaries.

Our Mission We believe that every client should feel confident when buying and selling a home. We strive to elevate the standard in our profession by providing exemplary service and improving our reputation one client at a time. We are client focused and results driven.

Contact Us HausEdge Team hausedge@gmail.com www.hausedge.com (347) 956-7654

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