How To Sell Your Home Like A Pro Insider Secrets Of A

How To Sell Your
Home Like A Pro
Insider Secrets Of A
Rogue Realtor
Another Real Estate eBook From:
Richard Embro-Pantalony
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HOW TO SELL YOUR HOME LIKE A PRO!
Insider Secrets of an Rogue ex-Realtor
Table of Contents
Introduction
1. Are you ready for this?
2. Market conditions
3. How much is my home worth?
4. Prepare your home for buyers.
5. Marketing and Advertising
6. Dealing with prospective buyers on the phone.
7. The proper way to show your home to potential buyers
8. Reading your prospects buying signals
9. Negotiating the best deal
10. Conditional offers
11. SOLD! …or is it? Closing the deal.
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INTRODUCTION
Deciding to sell your home can be exhilarating, confusing,
stressful and depressing all at about the same time. This book
was written to help ease some of these reactions when you
make that life altering decision to move.
I spent more than 30 years as a professional realtor and real
estate investor. For a great deal of that time I helped people sell
their own homes commission free even though I was a realtor.
Of course I was hoping they would fail and inevitably list their
home with me on MLS.
“Anyone can sell a home when the market conditions are
booming” so they say. This isn’t true in many cases. I will show
you how to sell your home for top dollar in a good or bad
economy. There are many factors that come together when a
house finally sells and I’ll show you how to “load the dice in
your favor”.
Funny thing about real estate, it’s the most expensive
investment many people will ever make in a lifetime and
everyone thinks they’re an expert in the field because they own
a home. This over confidence has humbled many potential for
sale by owners.
Most people these days would like to at least try and save the
high real estate fees associated with selling through a realtor.
In fact nearly 25% of home sellers try and sell privately at least
for a couple weeks. Only 5% eventually sell their own homes; a
surprisingly pathetic number really.
In this book I’m going to show you how to avoid the many
common mistakes people make when they attempt to sell
privately. I really believe that if someone is serious about selling
privately then this book can help them do so and make top
dollar doing it. That 25% - 5% ratio could easily be reversed.
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Follow the instructions carefully and when you think you are
ready to move forward with your sale take another hard look at
your plan of attack. There’s always something else to consider.
1. ARE YOU READY FOR THIS?
You’re thinking of selling your home. The kids are gone so it’s
time to downsize. Maybe your spouse has been transferred and
you need to relocate; or perhaps its just time for a change of
scenery. Whatever the reason, you need to decide a few things
quickly. Let’s look at some of those things.
How much time do you have to sell?
This is critical to the amount of money you may end up settling
for. If you have time commitments with your move, new job, a
conditional offer on your current home selling, you’ll need to sell
quickly. This places you under pressure to accept an offer even
though it may not be what you want.
It will also determine how aggressive your marketing strategy
will be. You will need as much exposure to buyers as possible.
Can this exposure be achieved by doing the sale yourself?
Maybe because of time constraints you would be better off
having a realtor take care of all your selling needs. The multiple
listing service may start looking good at about this point.
If you make a plan to market your home and follow the plan of
action precisely you can still do this yourself. If you are
generally well organized, reasonably adept at meeting and
conversing with strangers in person and over the phone and
commit to the time and scheduling necessary you can do this!
Can I make a commitment to being available?
Generally speaking the first 2 weeks are critical to the sale of
any home. That initial exposure will generate the hottest, most
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desperate buyers who are also in a hurry to make a move. You
will also interest those folks that are looking for the new listings
to “arrive on the shelf”. Regardless, that first two weeks is
critical to your success.
Dedicate yourself no matter what your reason for selling to
giving the sale your full attention for two weeks. No need to
place added pressure with setting long term goals. Now that
you’ve made that decision, the sale of your home should
become the focus for your entire family for that two week period.
One of the things that always amazed me when as an agent is I
would call private seller advertisements from the classifieds in
the evenings and 50% or more of the numbers I called had an
answering machine taking calls! On average 8 out of 10 calls I
was talking to a machine, a teenager, a toddler, senior relative
with no information or I would simply get no answer.
When you decide to sell make sure it’s a family effort. This
means having everyone aware of how to handle phone calls
when they come in. If your kids play soccer in the evening make
sure someone responsible is available to show the home at
anytime, If this means skipping a soccer game than so be it. The
point is to BE THERE!
Are you willing to spend money on advertising and marketing?
If you aren’t prepared to spend approximately $1000.00 on
generating interested buyers to your home than you shouldn’t
bother trying. You could place a sign on your lawn and the first
person driving by could buy your home and you’re ahead of the
game. Chances are you will need to spend some money to get
some eyes on your home. When you successfully sell it will
have been worth the investment.
If money spent is no object there are many things you can spend
it on to help facilitate a successful outcome. The following is a
quick list:
- A professional appraisal from a licensed appraiser documented
- A professional home inspection documented
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- A cosmetic makeover of your home inside and out if possible.
There are many things you can spend money on that will
impress an anxious potential buyer. But you first need to attract
that buyer and that’s what some sellers neglect to think about,
advertising and marketing.
Once you have convinced yourself in the affirmative to these
things I’ve mentioned you need to consider something else.
Call your lawyer and put them on notice that you intend to sell
your home yourself and ask them to prepare some offer to
purchase form sets specifically for you and your home. You will
want the forms to include all relative articles and clauses to
protect you and your potential buyer. Most offers are standard
“boilerplates” with a few specifics that may be necessary
depending on where you live and what type of property you
have.
Have numerous copies of the offer forms in hard copy and if you
have a computer, have a digital copy in your hard drive so you
can access it quickly and make any necessary changes.
Now do you think you are ready for this?
2. MARKET CONDITIONS
Most homeowners have a general idea of the housing market.
Read the newspaper on most weekends and the Homes section
will likely have an article about the housing industry. Some
people think if they see a lot of sold signs on lawns things must
be good. Don’t make this assumption. I’ve seen some of the best
and worst conditions for a real estate market yet great looking
homes sat unsold while some real dogs were snapped up.
Your sale will go much easier if you avoid the big picture. Focus
on your general area. Many things effect a local real estate
market from mortgage rates to hydro right of ways;
neighborhood politics to school availability. So its’ now time to
do your homework and do it fast. Drive around your general area
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and checkout the local competition. What else is on the market
and what is the asking price? Are these homes comparable to
your own? Know your competition. Good realtors have seen
every home in your neighborhood and so should you if possible.
Go to open houses, call listing agents and get information.
Determining what the local market is like will help give you a
good understanding of what you’ll be facing in the coming
weeks. Remember that home buyers are much better educated
than they were in the past. The advent of the Internet has
opened up information channels not previously available to
purchasers. Many do their homework online investigating
property everywhere, not just your area. You need to be on the
ball when dealing with them and have answers when asked.
Pretending you are a buyer during this research phase is a good
idea. Think like a purchaser you will understand the purchaser.
Understanding market conditions will help you put a fair price
on your home. We’ll discuss that later. Right now you want to
determine if there are any existing conditions in your local
market that may affect the sale of your home. An example of this
occurred in my target market years back when the economy was
coming out of the recession of the early 80’s. Interest rates were
as high as 22¾ %!! This was a ridiculous time to be selling a
home and an even worse time to buy if you needed to finance it.
Yet there were properties moving. Slowly things started turning
around as we lurched out of the recession. There was a newer
area in our city that had affordable housing for first time buyers
and those with a low to medium income. A large group of town
homes were located here as well. They were a tough sell anyway
because they bordered on a recently closed city dump that the
city tried to spruce up with greenery and call it a future ski hill or
some such thing.
These town homes went for a low price at the time and people
bought them up to live in and as investment rental property. Not
long after these were all sold, a major methane gas problem was
detected in these homes and many others that bordered on the
old dump. Years of court battles and political feet-dragging later
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these homeowners were finally compensated but at what cost.
They couldn’t give their homes away in any market.
20 years later there is still a stigma about that area. Anyone who
questions the large man-made hill in all those backyards is
probably doing themselves a huge favor in my opinion.
My point is that some market conditions can’t be avoided and
your home sale may indeed be a difficult one. Learning about
your location and I mean everything from the warehouse facility
½ a mile away to the rental property down the street will mean
you have to have answers to the inevitable questions from
prospective buyers. These days’ buyers have access to
neighborhood information at the click of a mouse. You have it as
well. Do your homework.
As for the economy, interest rates have been relatively low since
those dark days of the early 80’s but even if the rates doubled
from today’s rates, there are still things you can do to
successfully sell your home. Creative financing techniques kept
many realtors in groceries during this time including yours truly!
We’ll discuss some of these later in case your purchasers need
a financial hand.
3. HOW MUCH IS MY HOME WORTH?
Understand from the outset that there is a buyer for every
property and market conditions should not be high on the list of
reasons why you can’t sell your home yourself. In fact, selling it
yourself may be an advantage. In a tough market buyers tend to
gravitate to the private home market thinking they will save the
realtors fee and get a better deal. In theory this makes sense
except most private sellers think the opposite. They feel that if
the listed price for a comparable realtor listed home is i.e.
$195,000.00 including 5% commission, then they should be able
to list at $193,900.00 and still have more negotiating room than
the realtor will.
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Your potential buyers will evaluate things differently and feel
you are saving 5% off the top and therefore will likely lowball
their offer at say $180,000.00 and will go up to perhaps
$185,000.00 as you “are saving 5% already”.
Do not make the mistake of over pricing your home from the
start. This will only delay the sale and make it more difficult as
time goes on. I’m going to teach you how to arrive at a fair
listing price and get it.
Buyers aren’t naive and as I mentioned they have plenty of ways
they can gather information to arrive at a potential purchase
price. Don’t make the mistake of trying to bleed equity from your
sale. Expect fair value for your home, no more, no less. If you
insist on squeezing out every drop of equity and want to risk a
lengthy listing period remember these points.
- Make sure your home is in top notch condition. Not a paint peel
or loose door knob anywhere!
- Be sure you have as many positive market conditions as
possible in your favor.
- Be prepared to serve your sale. Be available and show your
home anytime of the day or evening 7 days a week.
- Have all paper work ready so there are no delays in putting an
offer in writing.
- Make sure you know in advance exactly what you will accept in
price and terms from your purchaser. You can always adjust
your plan later during negotiations.
I’m not an advocate for overpricing a home and the greed factor
can put you out of the market pretty quickly. However if you
insist on trying this then limit your higher price to a two week
period at the beginning of your sale and only advertise it with
secondary advertising mediums. Prospects will still find you and
you will get good feedback from these people if not an offer.
Save the primary advertising mediums for later when you may
need the extra wave of buyers for your potentially reduced price.
Overpricing your home will create a perception with buyers that
will be tough to overcome the longer you keep the high listing
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price. So any longer than 2 weeks and you risk losing your
target buyers to more fairly priced competition.
When you decide to list your home fairly you greatly increase
the chance for a more quality transaction all around. Your
purchasers will not have any nagging second thoughts that
could come back to haunt you. Their financing will go smoother
as their will be no question of value by the future mortgagor. The
purchaser’s lawyer can put all kinds of questions into a buyers
head if they have been asked to review the offer as one of the
conditions. So why add a concern about overpricing to the list of
things the lawyer may warn them about. This could happen!
Legal opinions are useful but ask any realtor and they’ll tell you
a lawyer can be a deal killer so why heighten the anxiety by
potentially overcharging someone.
Start your evaluation buy combing the realtor advertising
magazines, newspaper classifieds, open houses, and the
Internet. Of these, the Internet will be your most valuable
resource. If you use a search engine to find an electronic home
evaluator you can avoid be bombarded by agent referrals from
websites you visit. Many real estate web sites match you with an
agent for an evaluation. Initially you want an electronic
evaluation.
Digital home evaluators are becoming quite a tool in the new age
of real estate technology. They will give you a pretty good
estimate of your homes value using an algorithm and home data
entered by you and compared to other information previously
compiled in their database. I don’t think this should be your only
value source so again, do your homework.
Everyone has some idea what they think their home is worth.
How much money you need to see out of your completed deal
will also have some bearing on your sale price. Now if you only
have a small amount of equity in your home than be reasonable
about things. In fact, you’re probably making the right decision
to sell privately in the first place.
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In the past I have been called to a listing presentation by a
potential seller and spent time compiling a CMA (competitive
market analysis) for them knowing full well they were probably
going to try and sell privately. I would simply ask what their
intentions were, MLS or private, and really didn’t mind helping
them with their price. This is a route you can take if you feel
comfortable even speaking with a realtor; many private sellers
don’t. It probably is the most accurate way to price your home if
you speak with several realtors in advance. The good ones are
in the trenches daily and see the stats daily as well. These days
with everything computerized it doesn’t take a realtor long to
compile their data. You can probably make a few phone calls
and have them email a list of recent sales comparable to your
home and currently listed properties as well.
Take advantage of the resources available to you when trying to
arrive at a fair listing price. Market value is determined by the
price a willing seller accepts from a willing buyer. It sounds easy
enough but in reality if you don’t price your home fairly to begin
with you will not achieve this true market value.
Real estate commissions are another way that home values get
artificially inflated. Realtors tack on 5 or 6% commission onto
the price of a home when they sell it and this is in fact the selling
price and “market value” of the home. As a private seller you are
establishing a true market value for your home when you finally
consummate a sale. It is literally like having 2 markets in the
industry overall.
When you arrive at a price for your home and you’ve calculated
how much equity you want out of the deal, make that your
bottom dollar. Of course you keep this price to yourself. The
most important thing to remember when putting a listing price
on your home is don’t be greedy. Be fair and your deal will
happen quicker, with less hassles and you can move on with
your life. Selling privately is a challenge you can handle but the
higher you price your home the longer you will wait for the right
deal.
Some points to consider when pricing your home
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- Hiring a certified property appraiser who will give you a
document with a professional opinion to back up your asking
price. This is a powerful tool when negotiating your offer.
- Remember that you are already saving up to 6% on the overall
price by selling without a realtor; reflect this savings in your
price.
- Your personal timing needs to be considered. How much time
do you have to sell? The more time you have the less flexible
your price has to be.
- You will be leaving this home so try to remain objective in
arriving at a price. You can always make up differences on your
next purchase or by wisely investing your equity.
- Short of hiring an appraiser you can call a couple of local
realtors who seem to have a grip on the market and ask them for
an email CMA report. You may need to give up some personal
information to them or offer to pay them $50.00 each for the
service. This will be cheaper than an appraiser.
4. PREPARING YOUR HOME FOR SHOWINGS
When you decide to finally put your home on the market, you
should take a good look at what you’re going to be selling.
Potential buyers may want to see your home at a moment's
notice, so reduce stress and be prepared to show it off.
In general, for the term of your sale, keep your house in top
condition, as this will increase the likelihood you’ll get top
dollar. It will also help sell your home faster.
The following list gives you a guide to follow to prepare your
home for sale.
Curb Appeal:
• how’s your landscaping
• Is your lawn in decent shape
• Keep it mowed
• In season is your walk and drive clear of snow and ice?
• Are trees and shrubs manicured
• How’s the gardening, does it need something ( don’t go
overboard )
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• Keep your driveway swept and free of stains
• Consider patching and resurfacing.
• Do garage doors need paint or cleaning?
• Repair concrete steps or walk.
Entering the home:
• Repair storm doors and windows if necessary
• Paint front door or repair
• Clean all hardware
• Use common sense; take a hard look at what prospects will
be seeing.
• Check the roof, replace a few shingles if needed
• Pay attention to your chimney, does it need work?
• Check everything on the exterior of your home and put
yourself in the buyers shoes
Now for the inside:
• Freshen all wood work with lemon oil
• Clean all flooring- shampoo rugs, clean and or replace tiles or
linoleum if needed
• Wash walls or repaint if necessary
• Clean your curtains if needed
• Instruct your family to always keep home clear of clutter
including hallways and stairways
• Clean all windows and patio doors
• Wash down cabinets and polish hardware
• If your cabinets are older, sometimes a coat of paint and
some new hardware will do wonders.
• Polish all chrome faucets and repair drips
• In bathroom and kitchen replace or clean tile grout
• Keep sinks and toilets clean regularly
• Patch all walls where needed
• Replace old or broken electric faceplates
• Clean and sweep fireplace
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• Remove stale and musty odors from basement, white
washing unfinished concrete looks amazing.
• Check basement floors for watermarks and repair or clean
• Paint concrete walls
• Have furnace cleaned and surrounding area cleared
• Tidy up your garage
• Make a couple trips to the dump if necessary
As we discussed earlier, if you are going to attempt to sell your
home yourself, you need every advantage you can get. Start by
inspecting every area of your home inside and out, with a critical
“buyers eye” and fix what needs to be repaired, tweaked or
replaced. If you had an agent list your house the good ones will
tell you what work needs’ to be done to enhance your chances,
not necessarily just what you want to hear.
If you do decide to spruce things up please don’t go overboard.
Try to keep colors neutral and if you do the cosmetic work
yourself you may find the cost quite reasonable and the return
dramatic. Don’t overdo it during this phase. Putting in a new
furnace won’t help you but servicing the old one or having all
the old service records available for buyer perusal will help.
Now is also a good time to discuss the adage “from a home to a
house”. When you are selling your property it becomes a house.
When you purchase a property it becomes a home. Try and keep
this in mind from the point you decide to sell and it should help
you remain objective. Prospective buyers aren’t interested in
seeing your bowling trophies for the past ten years in your living
room. They will however want to see in their minds eye how
THEIR possessions will fit in your rooms.
One of the best things you can do for yourself is box up many of
your knick knacks, accumulated stuff that hides your homes
advantages and features. Pull down the 4 point buck antlers in
the family room and replace it with a neutral landscape. Now
would be a good time to discuss staging.
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Every home has defining qualities that drew you to it in the first
place. 5-10 or more years of accumulated “stuff” needs to be
removed. Now reposition your furniture to open up each room.
You have gotten comfortable over the years but now it’s time to
clear things out. Less furniture is better in smaller rooms. If
couches are against a wall (squared around inside a squared
room) try angling your furniture in corners. Pull the furniture
along one smaller wall out from the wall by a couple feet. This
will give the impression of depth to the room.
If you have hardwood floors and you want to show them be sure
they are in good shape. Otherwise, get yourself some neutral
area rugs to place in the middle of the rooms to give a look at
the floor with or without carpeting cover. As a rule once you
have cleaned up the clutter and staged each room for their best
appearance, if YOU like what you see, the buyer may as well.
You won’t please them all but you will certainly increase the
odds in your favor.
Some points to remember when preparing your home
- Inspect with a critical buyers eye. Be objective.
- Don’t overspend when doing your make over, no major
renovations or improvements. Only do cosmetic work.
- Box up all your knick knacks. Clear your fridge “art” and
personal eye pleasers.
- Rent a storage unit for extra stuff or box it and hide them in the
basement provided you can still SEE the basement after things
are stored there.
- Don’t fill your closets up with stuff!
- Women especially like the cleanliness of bathrooms and the
utility and space of THEIR kitchens. Not to sound chauvinistic
but in most cases this is true. Closet space is also quite
important to them so make sure they can see what you have to
offer.
- As a rule men like to have a den/ office of their own, or a space
like a workshop where they can tinker or retreat to; if you have
this then clean it and promote it. Game rooms are important for
family unity. A garage is also an important feature especially for
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guys. Keep your garage tidy and if at all possible have it so a car
can actually be parked in it. This means no clutter.
5. MARKETING AND ADVERTISING YOUR HOME
There are numerous ways to market your home for sale. We’ll be
discussing some obvious ones and some less conventional
methods.
Print advertising
This would include your local daily newspapers, weekly
community papers, shopper newspaper and magazines. These
papers should have homes for sale section in the classifieds
that you will want to utilize. These are the obvious places that
buyers will look at during their search. Call these papers for a
price based on a simple classified advertisement. We’ll discuss
what to include in your ad later.
You should always ask what their special rates are if any. Some
will run a monthly rate of 4 weeks 5th week free or pay for 3
weeks and get 4th free. This can save you money and get you the
desired exposure you’ll need. Don’t get caught up in the 1 day
ad here and another in a different paper. Run your ad for at least
1 week and preferably 2 weeks in the same paper.
If your ad is paying its way you’ll know it. Your response will
depend a great deal on what information you include. Circulation
is important. What days do they sell more papers and how many
other homes are there in the same section? Will your ad be lost
among them? Regardless, be sure to be prepared because your
first day or two will be your best response.
Lawn sign
As a realtor I found the power of a lawn sign to be tremendous.
Some sellers did not want a sign for various reasons but they
are a great source for leads. Once the nosey neighbors finish
calling you, you will get more serious calls. Even if your street is
quiet, you still need a sign. DO NOT buy your sign at the
hardware store. Spend some money and have a professional do
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your sign for you at a sign shop. Its worth it especially if you live
on a busy street. It would surprise you how many people just
drive areas looking for properties for sale and if your sign is out
you will catch some interest.
Never say “By Appointment only” on your sign. Remember you
are going to be in show mode at all times because you are
committed to selling. Accommodate the walk up traffic the lawn
sign generates. Your sign should say the following.
HOME FOR SALE
BY OWNER
Privately
1- (598) -555-1234
This is easy to read and makes it clear that you are selling your
home yourself. A professional can do the sign up in a timely
fashion and provide you with solid ground stakes to secure it.
By having a nice looking sign you will stand out from other
private sellers and you’re attention to detail will not be lost on
prospects. “They spent time and money on their sign they must
be as meticulous with their home”. Yes, buyers look at every
detail, especially if they are serious.
Feature Sheets
You should have some kind of handout to leave prospects with
after they see your home. This is something you can do fairly
easily with digital photos of your home and your computer. Print
out a master copy of a nicely designed page of photos and
property details including:
- address
- Lot size
- Number of bedrooms
- Major features like central air conditioning, Solarium, wrap
around deck, etc.
- Your contact information
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- All the details of your home that you liked should be included
within reason.
Don’t be shy with details and talk about all features of interest in
your location as well. Local school information private and
public is important to families so call your area schools and see
if they have handout information you can use or at least
principals phone numbers. The more information you can
provide for a prospect the more you will retain their interest in
your home. This feature sheet will be an important tool.
Internet Advertising
Most people start their search for a home on the Internet. 75% of
all homes sold were seen at one point online. Choose your web
advertiser carefully. The more information you can provide
online the better. There are specialty sites for private sellers
online and you may have even purchased this book at one of
them.
It’s a fact that the more photos you have of your home online the
more activity your listing will receive. The Internet is a visual
medium and therefore people expect more than just text info.
These real estate websites should provide you with some tools
that will allow you to e-mail your listing to interested parties. If
the online listing comes with an identifying listing #, place this
web address along with your number in your print ads and
flyers. You’ll redirect prospects to your online listing and in
effect will be pre-qualifying buyers.
When you create your web listing they will ask you for basic
home information including your contact info. Give all your
contact numbers if possible including home and cell phone
numbers, e-mail address and your work number if appropriate.
When you get to the section about property details place as
much info as you can without giving boring details. One of the
complaints about realtors from buyers is that they don’t give up
enough information about their listings. This forces buyers to
call them and a back and forth game of information gathering
commences.
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You should avoid this practice by outlining information in detail
for buyers. Your objective is to generate a phone call or get a
viewing appointment. Prospective buyers will be more inclined
to give you their information than they would to an agent so be
open with them and provide what they want, details!
High traffic websites are of course important but find a real
estate web site that caters to the local market from a national
database. You want local traffic looking at your listing. It does
no good going to a web site that gets a million hits a week and
you get lost in the mob. Also how much of that traffic will be
looking for a home in your neighborhood?
Before you choose a web site to list with, do a search of your
city online i.e. real estate+for+sale+South beach; the site that
provides the most returns, if it is national, is the one you want.
It should also look professional with an easy to navigate search
capability. Online shoppers are not very patient people and they
won’t hang around a site long if they don’t understand it or it
takes to long to load and find homes for sale.
Unique site features that promote your home in an exciting way
are also recommended. I suggest that this may be the most
important point. How your home is presented online is critical to
your success. Buyers will find your home online if you lead them
to it offline. By this I mean make sure your listing URL address
is on all your advertising and promotion material i.e.
http://www.yourwebpage.com/ID45678
Buyers can go directly to your online listing and presumably
search by ID# to find your listing. Real estate is the most popular
personal search on Internet today. Most real estate enthusiasts
are using the Internet to research real estate.
Today you can set up your own website with ease and for next
to nothing. A company like www.godaddy.com offers domain
names and simple websites that can be set up in minutes. Using
your address for your domain name makes things easy. Try
www.youraddress.com and you are on your way. Make sure you
are able to load multi-media to your new website. A quick search
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online should help you locate a website host that provides video
up loads. Short of that you can post a video tour to
www.YouTube.com and embed the code to your site or post a
link of your video on the website that visitors can click on and
view.
Open Houses
This method of showing off real estate has been around since
the feather pen. I’m not a big fan of having complete strangers
walking through a home sometimes unattended. If you are in a
popular area and you draw well it will be next to impossible to
control the flow of people and you will be unable to recognize
buying signals from people as you’ll be to busy.
I would rather you make all showings one at a time. There are
web sites that provide walkthrough video tour services that are
quite reasonable and act as a pre qualifier for buyers. If they see
the home online on video, the interested parties will call for a
personal showing. These video tours save you a lot of hassle
and work quite well. If you insist on doing open houses follow a
few rules to make your 3 hours more productive and less
stressful.
- Place at least 3 street corner open house signs out and 1 in
front of the house on the curb.
- Arrange to have more than 1 person available to host the open
house.
- Have a guestbook and highly encourage people to sign it with
name and phone #.
- A ½ hour before the start of your open house, place a pie tin
with a half inch of vanilla extract in the oven on low heat (150 200). You want your house to smell like fresh bread so adjust the
temperature accordingly.
- I always had snacks for people and juice so we could stand
around and discuss the home.
- Make sure all your valuable are locked up and stored away.
- Place an open house date and timeline in your main newspaper
advert for one day (Saturday) and don’t miss the deadline for the
weekend paper. You can then have your open house either
weekend day. 1:30 – 4:30 pm is a good time.
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- Make sure everyone gets a feature sheet when they enter the
home and takes it with them when they leave.
Marketing Material
Have some professional flyers with a photo made up of your
home and make it descriptive but easy to read. More sizzle than
steak for this one. Have a couple hundred of these flyers printed
up and make sure they are all distributed in a day or two.
Chances are someone in your immediate area knows someone
who is looking for a home in your location and if they know
about yours, they’ll pass that information on to them. I can’t tell
you how often I have sold homes because I distributed flyers
after I listed a home. Have your kids or yourself drop off flyers
between the doors up and down the streets in your
neighborhood.
When you tell people that your home is for sale you start word of
mouth advertising (virus marketing) and this is valuable and
inexpensive! Post flyers in stores and malls. Talk to your corner
store owner where you buy lottery tickets. If you have a
computer, print up business cards with your HOME FOR SALE
PRIVATELY along with address, name and phone number. Pass
this card out to whoever will take it. Remember everyone you
speak with could potentially help your sale. The drycleaners,
video store, corner pub, restaurants that you eat at and even at
work, all can help you facilitate a sale.
The following are some sample classified adverts and flyer
ideas:
134 Sterling Avenue
Private Sale. 2 storey, 3 bdrm. end unit semi, excellent location. Large
private yard. Oversized garage/workshop/studio. Many updates. (624) 5552345 See video tour: www.yourvideoURLlinkhere.com/
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134 Sterling Avenue
Private Sale. 2-storey, end unit, one owner semi in excellent location. Close
to everything. Large private lot close to everything. Oversized garage,
workshop or studio. Many updates including all windows, high efficiency
gas furnace, newer -driveway. $152,500. See Video Tour
www.yourvideoURLlinkhere.com/
Or Call: (624) 555-2345
The two advertisements above are both fine. One is going to be
cheaper than the other based on the number of words. When
you write an ad, always make an effort to keep it brief yet
descriptive. Try to make it no more than 20 words initially; very
few short forms if possible. The important thing is to have the
highlights in the ad. Mention you are a private seller first.
General location or address, house style, number of bedrooms,
describe lot size i.e. treed, private, fenced etc. and if you’re
confident with your price than add it as well. Add your phone
number with area code, the style and garage and outbuildings
and any income or potential income?
You could blow the budget with one advert and all you want is
that phone call. The more words you put in an ad the less reason
a buyer will have to call you. Another reason why it helps to
paint a picture with your ad is to direct them to a website to prequalify the buyer with a slideshow of photos or a video. All your
details will be posted in your online listing so your ad should be
designed to draw them to further information online or a phone
call for a showing. When you call to place the ad, ask the
newspaper if they will have a photo special on the weekends.
This is well worth the price if you combine it with an open house
announcement.
I started out by saying you should approach selling in 2 week
cycles. Your classified ads should run no longer than 2 weeks
before you revise it or change it altogether. Running the same
ad for weeks at a time will give the impression something is
wrong with your house and that’s why it hasn’t sold. Remember
to change your ad, your print medium or both.
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Try to be creative in your advertising and marketing. An example
of this creativity could be wrapping your for sale sign in white
Xmas lights and have them on in the evening for a few hours
after dark. My personal favorite is using a clear Xmas spot light
aimed at your sign again after dark. This would be particularly
effective if you live on a moderate to busy street. People still
drive at night!
The following page has a sample feature highlight sheet with all
the details you need for buyers. You can make one up on your
computer pretty easily or print one off your online listing. Your
web site should provide this service as well as the ability to
email your listing to prospects.
Presented By:
Don Truce
Listed By Owner
Don Truce
Phone # xxx-142-8
Phone2 # xxx-142-8
Contact Owner Click Here
123 Lackner Street
Winger, Ontario, Canada N5C 4G7
Property Information :
One year old home in great location. Only seconds from the 401 and 25mins
from Mississaugua. Quick access to both catholic and public schools. Less than
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5mins from all amenities.
Multi-level home featuring 2500sq.ft. with finished recreation room in basement.
Over $30,000 in builder upgrades including;
-3/4 bricked home
-access door from garage to side yard
-patio door to rear yard
-automatic garage door opener
-ceramic tile throughout
-upgraded kitchen cupboards w/moveable island
-gas fireplace in sunken living room
-alarm system
-water softener
-built-in dishwasher
-central air
-interior doors
-carpet and underpad
Please call for more details or for viewing
(634) 555-2345
6. DEALING WITH PROSPECTIVE BUYERS ON THE PHONE
This chapter is devoted to the telephone…simple right? Think
again. You’ve put time into writing decent classified advertising
and spent money to generate some response. When your phone
rings there are some simple rules to follow to ensure you aren’t
wasting your time and budget.
First of all make sure whoever answers the phone is prepared.
Don’t let small children answer the phone despite how cute you
think it is. Only adults should speak to prospects. The following
are some simple points to consider:
- Change your voicemail outgoing message to address your
sale.
“Hello, you’ve reached the Smith residence. We can’t answer
your call just now but if you’re calling about the house for sale
please leave your name and number and someone will call you
soon with more information or go to www.yourwebsite.com ID#
23439 (if applicable) for further information”
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Never miss an opportunity to inform about your house sale.
- Your objective is to arrange an appointment to show the house.
Callers will cut right to the chase and press you for information.
It’s OK to tell them what they want to know about your home
however make sure it’s a two way exchange of information. If
you give info you should ask a question of them in return. The
exchange should go something like this:
Caller: “Hi I’m calling about your house for sale in the paper. Is
your home located near the furniture factory near Elm Street?”
You: “No that factory is a mile east of us and we’re not affected
by it at all. Do you work at the factory? It would be a short drive
to the plant.”
Or:
Caller: “Hi, tell me, that’s an older neighborhood, how old is
your home?”
You: “Only 35 years old but we’ve made many improvements.
Are you looking for a newer home or one with a mature yard and
numerous upgrades?”
If you answer their question and follow up with your own you
will learn pretty quickly what these people are looking for. You
can have some control over the situation. You’re trying to
arrange an appointment so don’t be afraid to get to that point in
the call.
The phrase location, location, location gets over used but it is
true. If you have your address and price in the ad and they call
you it’s a pretty good sign. Work that aspect with the caller.
You: “Are you familiar with our area?”
Caller: “Yes, I grew up in the area and always liked it.”
You: “Do you have a family? As you know there are great
schools within easy walking distance.”
If they like the location of your home then that’s half the battle.
Now you need to press for the appointment. They can ask all the
questions they want but they will not be able to get an accurate
picture of the home unless they see it in person. Based on the
information in the ad you wrote, they called knowing the basic
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details. They can’t possibly make a qualified decision without
seeing it in person. Don’t be afraid to mention that if it sounds
like they may be talking themselves out of a showing.
If after answering several questions and the topic of price does
not come up it could very well mean price is the 800 pound
gorilla listening to your conversation. It may be a problem for
them and they don’t want to address it or perhaps it’s not a
problem at all. Only address price if they bring it up during the
call. Even then remember that you must avoid discussing it in
detail. Try something like this:
Caller: “Your price seems a little high for that location.”
You: “I suppose all prices are up for debate, that’s why we paid
to have a professional appraisal done on our home before we
put it on the market. If you’d like to come over this evening we
would be happy to give you a tour and show you our appraisal.”
BANG!
Now let them answer. Stay quiet. You could get the appointment
and you deflected the price issue because you had the foresight
to have an appraisal done beforehand. There’s no dispute.
Just ask questions and always ask for the appointment:
You: “And we have a detached double garage where we have set
up an art studio. It’s quite nice. We would love to show it to you.
Can you make it over this evening at 7:00 pm or would 8:00 be
better for you?”
Give them a choice of times and it’s harder to say no. They need
to see the home to make an educated decision. They know the
price, the location, and the basic layout of the home and style.
Now they need to see it and the closer a buyer gets to a home
buying decision the easier it is for them to back away. Your job
is to make them feel comfortable and build their anticipation
during the course of the phone call.
Quick Hits
- Every one who answers the phone should be prepared.
- Have a copy of the feature sheet ready by the phone so you
have details handy.
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- Change your outgoing voicemail message to address your
home sale.
- Since you will be marketing by more than one method, it might
be handy to know how they heard about the sale. This way you’ll
know what advertising is working best and you can maximize it.
- Always make your conversation reciprocal. You give
information you should get information.
- The phone call should be about arranging a showing of your
home so try and keep the call brief and to the point.
7. THE PROPER WAY TO SHOW YOUR HOME TO POTENTIAL
BUYERS
Every time you show your home you have your potential
purchaser with you so focus only on the job at hand. It goes
without saying that you need to have the home sparkling at all
times. This is tough to do with a family but think of what is at
stake. You may need to overcome the feeling of intrusion and
this should pass quickly after a showing or two. You’ll begin to
feel more comfortable and this will help your presentation.
I think it’s a good idea to make sure the buyer can park their car
in your driveway. This means perhaps parking one of your cars
on the street up or down a couple houses; to give the outside a
less congested look. Do not park a car or cars in the garage;
they’ll want to see the inside. This is also when lighting your
sign up will be appreciated as it will be easier to find your house
and they’ll know you are taking the sale seriously. They’ll
certainly remember they were there.
Beforehand, make sure you open a couple windows if the
season allows it. Be aware of cooking odors. It is always a good
idea to clear the air in your home as it becomes stuffy and you
won’t realize it. A couple minutes with all the doors open for
circulation does wonders, again if the weather allows it. As I
mentioned above, bring out the pie plate with vanilla extract for
the fresh bread smell in advance of the showing.
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If at all possible, tell the other family members to take a walk for
half an hour so just the buyers and sellers are at the home. This
will accomplish several things. Your buyers will feel more
comfortable if they aren’t bumping into people as they walk
through your home and the home will show better when the
rooms are free of family members.
Before your guests arrive you should turn on every light in the
house. Let there be no dark hallways, stairways, rooms or
closets if possible. Turn off all television and games sets and
turn the stereo on low and slow. Set the mood with just the right
sound. You want your home to be inviting.
If you have pets now would be a good time to send them to the
neighbor’s house or send them out with the rest of the family.
Spray air freshener around the dog’s bed and hide the litter box.
Speaking of cats, if your buyers have allergies you’ll know it in a
matter of minutes as they tour your home. There are anti allergy
spray fresheners on the market that may help in this regard as
cat dander causes one of the more severe reactions in people
and your deal will be dead before it has a chance.
Carpets should be vacuumed daily with Carpet Fresh as they
collect odors like a sponge to water. These animal smells are in
your home if you have pets and they will deter your buyers even
if they are animal lovers. Vanilla extract can only help you so
much!
Try to greet your visitors at the entrance door closest to the
basement stairwell if possible and start the tour in the basement
and work your way upstairs. I suggest that you and your spouse
alternate the tour by floors. This way each of you can get a read
on the buyers and you can comfortably discuss the buyers and
the showing afterwards.
You should know in advance that some people will comment on
your Aunt Pearls “tacky” wall tapestry or the “ugly” flower
arrangement in the bathroom. Let them make their comments
and bite your tongue. Every ones taste is different but you better
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bet that if you’re hearing these comments you should take heed
and replace the wall tapestry, the flower arrangement is fine.
Something that always worked well for me was feature cards
throughout the house. Get yourself some 3 x 5 index cards and
with a black magic marker write a description of certain features
on them. Display these around your house i.e. SOLID OAK
WOOD CABINETS placed on your kitchen cupboards or ITALIAN
MARBLE COUNTER TOP etc. You can do this right down to the
basement, on the circuit panel say 200 AMP SERVICE. NEW
1998, or HIGH EFFICIENCY GAS FURNACE WITH AIR CLEANER
AND CENTRAL AIR. You get the idea. Even though the buyers
should have a feature sheet with them as they walk through;
these cards will serve as a great reminder for them after they
leave.
When you show people through your home be careful what you
say. You should be doing more listening than talking. When you
speak you should be trying to paint a picture of comfort, and
hominess. Walking through you want these people to be putting
themselves in your place. You can make them feel this way by
speaking of your family in this home over the years and how it
served you well.
8. READING THE CUSTOMERS BUYING SIGNALS
Always let the buyers walk in front of you so you can see their
reactions. Speak only if they ask you questions or if you are
pointing out something of importance. Let them talk and you
then react to them. Give them some space as you progress
through the home but never let them out of your sight.
When you do speak let it be something like “do you think your
furniture would fit in here?” or “do you have your own
appliances?”
Listen to their comments like “Your workbench would fit nicely
along that wall” or “this would be a great room for Sarah.” or
“this room would make a great office for me.” These are all
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buying signals and you can start to close these people with
subtle suggestions about what you were planning for an area
and that you never got around to it.
As you show your home listen carefully to what they are saying.
They may be talking about their kids a lot. You should discuss
where YOUR kids play and the advantages of your
neighborhood and how its kid friendly. Schools will be important
so ask the ages of their kids so you can discuss what schools
their children will likely attend.
The may mention they care for an elderly parent in which case
things like bright hallways, fewer stairs and nearby bus stops
become important. Maybe gardening is something the senior
would enjoy and you have a great garden with lots of sunshine.
The point is to adjust your answers to what they want to hear.
These buying signals will help you to make the best of your
showing.
The biggest mistake even professionals make is missing these
buying signals and failing to act on them when they hear them.
There is nothing wrong with asking questions like:
- Do you have a home to sell first?
- How soon do you want to buy a new home?
- When were you looking to move into a new home?
- Did you want to assume an existing mortgage, because we
know ours assumable without approval with an adequate down
payment?
It won’t be easy to get financial information from a stranger but
by asking certain questions you may get them to lower their
guard.
These are basically set up questions so you can qualify your
buyer. They are designed to get them to open up to you and if
they do you need to recognize this quickly. If you feel good
about their reaction, then it’s time to act. When you finish the
tour simply say “if you like I can pour us some coffee and we
can sit in the dining room and discuss some further details.” If
they accept your plan then you’ve earned the coffee! Now the
critical negotiations begin.
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9. NEGOTIATING THE BEST DEAL
Be sure to have a few things prepared for your negotiations in
advance and keep these things very handy, perhaps in a
briefcase nearby:
- A calendar
- A calculator
- Several black ink pens and pencils
- A writing pad
- Your appraisal or CMA’s from realtors
- Copies of the offer to purchase with all legal clauses and
conditions pertinent to your city and State/Provincial laws.
- Copies of conditional clauses you may need to add to the offer
(It would be handy if your lawyer could place these standard
conditions in your offer and you merely select which ones you
need.
- Mortgage payment statement
- A property tax statement
- An existing survey (these are expensive and can be a deal
breaker or affect the price in the end if you don’t have one)
- Your home inspection report if you have one.
It quickly becomes apparent why these professional reports
were so important to obtain in the beginning as now they
become negotiating tools. The buyers are welcome to have their
own independent reports done but if yours are professional how
can they be disputed and why would they spend the money on
new ones.
The best deal is the one where everybody is happy. In order to
achieve this you must realize a few things. Start by assuming
the buyers have done their homework and have likely seen at
least 3 other properties by the time they are ready to speak to
you about an offer. Also understand that just as you have a final
selling price in mind, assume these folks also have a top price
they are willing to pay. Obviously you have to negotiate to the
medium acceptable price by both parties and you have a deal
right?
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Wrong! Price is only part of the negotiation. An important part
for sure but not the only consideration. In fact when negotiating
there are other things you should look at first.
Closing Date
You know what your ideal moving situation is but what about the
buyer? Do they live in a home that needs to be sold first? Is it
currently on the market or is it sold and they need a fast closing.
Ask yourself in advance how flexible you can be on a closing
date if it means you get what you want on price and other
details. If your buyer’s offer you a fair price and they come with
a clean offer (no conditions other than financing approval) can
you move in a month rather than 3 months as you had planned.
Have you found another home to move into and is the closing
flexible with it?
It’s easier to buy a home than to sell one so you should already
have played out these scenarios on your own. You need to
remain flexible for your buyers whoever they end up being so
you can overcome closing date conflicts for the buyer. As a side
note you should be actively looking at potential homes to
purchase for yourself if not actually making an offer on one in
particular.
Your mortgage company can assist you and your buyer with
bridge financing on one home or the other to help you meet your
closing. This type of financing should only be used if the
conditional seller feels their home is priced well and will be a
relatively easy sale. Whatever you decide it’s up to you to speak
to a mortgage professional in advance of your sale to become
informed of your options. You can then offer these as
suggestions to help with negotiations. Knowing if the buyers are
pre-approved for financing is a major step in negotiations.
Existing Mortgage
Will the buyer be assuming your mortgage or arranging their
own? By understanding the current interest rates and
comparing them to your existing mortgage you can determine
whether it would be a good deal for any buyer to assume your
current mortgage. If rates have risen since you financed your
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mortgage than it would behoove the buyer to take over your
mortgage. If the buyer is pre-qualified for a mortgage with a
different lender then step back and let them handle it. If your
buyers are trying to do a high ratio deal (low down payment)
they may be better off assuming your existing mortgage and
dealing with your company as they may be more amenable to
approval as they want to keep the mortgage business.
While we’re on the topic of mortgages I thought I would discuss
a creative way to help a cash short buyer purchase your home.
The VTB (vendor-take back) is a way for you to sell your home
and receive a monthly income at a great rate of interest.
It works like this – if the selling price of your home is $200,000
and your purchaser finances 75% this means they need a down
payment of $50,000. If they only have $30,000 cash but yet they
qualify to carry a $170,000 mortgage, you could hold a 2nd
mortgage for them for $20,000 from your homes equity. You can
charge a premium interest rate and register on title as the
second mortgagor. The worst that can happen is that you claim
the property back on foreclosure of the second mortgage and
resell it. Best case means you earn a nice income from your
invested equity.
If you speak with a mortgage broker rather than a financial
institution they can offer other creative ideas such as selling
your second mortgage for cash out. Look into it as a potential
selling option. In a tough market these creative financing ideas
are quite useful.
How ever the financing works out be sure to educate yourself on
possible scenarios so you have answers at the table.
Inclusions
Your pad of paper is so you can write down anything the two
parties are negotiating over. This will include what they want
included in the sale. Another reason you have the pad of paper
is so you can write instead of speak. If they want your antique
armoire in the hallway included since it “fits” in nicely, don’t
over react and get emotional, just write it down and it becomes a
point of negotiation. This is true of all appliances, maybe a
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workbench, certain wall and floor coverings and window
treatments.
Your buyer can ask for what ever they want. It remains up to you
if they get it. Don’t over react to their comments, just write them
down. Certain items will not be included because of sentimental
value. Place an x beside these on your list. Other items you can
include in the sale if the price is right. Appliances, blinds and
curtains always seem to get included if they “fit”. Understand
you can purchase new ones and make them “fit” in YOUR new
home. Try not to hang to tough to some of these items as they
could be a deal killer.
When the cards are on the table you now have a foundation to
start your negotiations. Leave the closing date for now and work
on your list of inclusions. Start by explaining the value you place
on these things and which ones simply can’t be included. Once
you have a finished list of what you are willing to include, bring
out the offer to purchase. Tell them you would like to “document
this in writing”. Add your names as the sellers and you should
already have placed the house description on the offer. Slide the
offer form across the table and hand them a pen so they can
write their names to the offer as the purchasers. Now tell them
you will list the inclusions in the offer and see if you can come
to some terms.
There are several techniques used by professional negotiators
that come in handy during this potentially stressful period of
discussions. Keeping things calm is not always easy and either
party can ruin the deal at anytime. When ever you are making a
final offer on a certain term of the deal – take it or leave it –
remember that whoever speaks first after the point has been
tabled generally loses. Or to put it another way, the party that
blinks will generally be accepting the terms presented. Make
your offer than shut up is a good rule of thumb.
I mean if it takes five minutes of silence than you know they are
seriously playing this deal out. If the tension gets to difficult,
don’t speak to them just get up and grab a glass of water or ask
your partner to get it for you. Every negotiation I’ve ever
34
participated in I’ve won my terms because I didn’t speak first;
uncomfortable yes but worth it. Being reasonable is the first
step to getting what you want from the buyer. Consider their
position carefully and try to deal fairly with them and have an
open mind.
When it comes to price, simply ask the buyers “You probably
have a number in mind so let’s discuss it”. Again when you hear
it do not over react either way just write it down on your pad. If
it’s a low ball and it likely will be, explain to them that you need a
certain amount of money from the selling price and this isn’t
close enough to your figure. Then before giving them a chance
to speak, calmly place all your house evaluations side by side in
front of them and show them how much they are off the mark.
If they offer $182,000 and you’re asking $209,000, they may think
this is all they can qualify for. You need to know this for certain
so ask them outright if that’s the case. You should be able to tell
if they are being truthful. Now is the time to put your next to best
price on the table. Say you NEED $200,000 from your deal, than
come down to $205,000. Consider giving them the appliances in
return. Reiterate to them the many features they commented on
and add a couple of your own as they need to be reminded here
why they have gotten to this point of making an offer. If they
continue to dither and refuse to come up from their original offer
than you can finally tell them your final acceptable offer is
200,000 and they have until tonight at midnight to consider it
and sign your name to the offer and make the deal irrevocable
until midnight of that day. They may just walk out at this point
but leave them with the offer anyway. You may also want to
consider the VTB 2nd at this time and remain firm at $205,000.
Before you go this route make sure it serves your timing and
needs.
You only gave them a few more hours to decide because they
probably were out of their price league and you now put the
onus on them to find a way to make the deal work on their own.
If they say they need more time to think about it then change the
irrevocable date and give them 24 hours only. You don’t want to
hold up your sale any longer than necessary but at least you
35
have an offer out there at an acceptable price to you. If it works
fine, if not, you haven’t wasted a lot of time. When buyers dither
you have every right to push the offer to this point. Some people
just can’t make a decision so you need to help them. Also
remember to initial all changes you make to the agreement. If
they accept your terms then they should also sign and initial
where you made the changes.
The right buyer, the ones that feel right to you are the ones that
will negotiate freely with you and are eager to make a deal with
you. They are self assured and also have their ducks in a row for
financing and instinctively know at the table what they want
included. This kind of buyer exists in the marketplace and you
may want to wait to find this type of buyer before you put an
offer in writing. I believe in putting every offer in writing because
it could be your only offer. Following your instincts in this
situation is a good approach.
Multiple offers
This happens more than you think. In a good market you could
get more than one offer and all bets are off. Your buyers could
take it upon themselves to have their own offers written up and
then call to present it, if you know there are other potential
offers coming in tell them this and to make their absolute best
offer and you will give it fair consideration. Try to have all the
buyers deliver their offers one after the other and tell each of
them that you will be calling them soon and to keep themselves
available for a call back. Don’t be surprised if they line up
outside your house or ask to wait for a decision in your family
room!
Now it’s up to you to choose the best deal that suits all your
needs. Choose the cleanest offer with the least conditions in it
and sacrifice on the closing date if the price is better etc. This
windfall is not just about getting the best price but the best
overall terms and conditions. Be sure to choose the offer that
you feel has the optimum chance for closure.
When you feel you have negotiated the best deal possible, make
sure you have it signed sealed a delivered to each party of the
negotiations. Every detail should be double checked. In the
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event that someone gets cold feet, the slightest irregularity has
the potential to kill the deal. Also be sure you receive a deposit
or earnest money from the buyer at the time of offer acceptance
and this check should form part of the offer when it is presented.
The deposit usually is for $1000. This is to show their genuine
intent and is refundable if the offer isn’t accepted, conditions
aren’t waived or for some reason it falls apart.
There are disclosure issues to deal with as well. It’s important
that you don’t knowingly hold back any pertinent information
about your home that the buyer has a right to know. For example
in some jurisdictions you must disclose to the purchaser if you
know or think you know your house is haunted of all things!
Another more likely example is if you have a toxic agent of some
kind like asbestos or UFFI insulation, this must be disclosed
beforehand even if it costs you the deal. Speak to your lawyer
about these disclosure issues and they can provide you with a
disclosure document to form part of the Agreement.
10. CONDITIONAL OFFERS
Most offers these days are conditional on something. Rarely do
you see a clean cash offer anymore. Conditions are added so
the purchaser can do their due diligence of the home to satisfy
themselves and comfortably move forward with the deal. The
most common condition is for financing. Other conditional
clauses could be for the sale of a purchasers existing home,
having a lawyer look at the offer, a home inspection takes place
etc.
A condition may be placed on an offer for any number of
reasons. Your objective is to see to it that all the conditions in
your offer are waived by the purchaser in the time period given.
Each condition will have a time limit to clear and be waived.
This brings up a point about considering cooperating with a
buyer’s agent only. You can sell your own home but you’ll still
have realtors calling with potential buyers. If you can arrange an
37
acceptable commission payout to the realtor (2 -2.5%), they will
be responsible for the purchasers and will deal with all the
paperwork including waiving any conditions in your offer.
If you and the purchaser are working without the realtor net then
it’s up to your buyer to fulfill the terms of the conditions
themselves. You should give all consideration just now to the
purchaser to assist them with fulfilling these conditions in time.
Make your home available for an inspection by either a home
inspector sent by the buyer or for an eyeball appraisal from their
financial institution. If the purchaser needs to fulfill the financing
condition than you make sure you see a letter of approval from
their financial institution. It’s critical that you and the purchaser
work together to waive the conditions in the offer. Remember
you have a home to sell and these purchasers better seriously
attempt to close the deal.
Have your lawyer ready to help with writing up these conditions
especially if they are not the normal “boilerplate” clauses. Offers
in writing can be tricky and let me advise you now that if you
don’t feel comfortable working with the legalese than refer it all
to the lawyers. I’ve included an offer worksheet that can be used
in lieu of a purchase agreement while negotiating. The last thing
you want to do is get sued for something you neglected putting
in the offer. On the same token if the parties to the deal are
taking the completed offers to their lawyers anyway then your
lawyer should be expected to work in your interest. When the
offer is written and finally accepted and firmed up (all conditions
satisfied) you must get in touch with an escrow company or
your lawyer to fulfill the closing commitments. They can also
hold the deposit check in trust for you.
In the event you are not comfortable working with an actual
Agreement of Purchase and Sale, the following is an intent to
purchase which you can use to document your offer and then
take to a lawyer to have the actual Purchase Agreement drawn
up.
38
INTENT TO PURCHASE REAL ESTATE
Contact Information
Buyer: ___________________________________
___________________________________
_________________________, ph #___ __________
Date: __________________
Seller: ___________________________________
___________________________________
_________________________, ph #___ __________
Dear Seller:
The purpose of this letter is to set forth some of the basic terms
and conditions of the proposed purchase by the undersigned
(the "Buyer") of certain real estate owned by you (the "Seller").
The terms set forth in this Letter will not become binding until a
more detailed "Purchase Agreement" is negotiated and signed
by the parties, as contemplated below by the section of this
Letter entitled "Non-Binding."
1. DESCRIPTION OF PROPERTY. The property proposed to be
sold is located at ___________________________________,
_________________________, _________________________ and
is legally described as
_____________________________________________
The Real Estate is subject to public highways, covenants,
restrictions and zoning, if any.
Restrictions:
_____________________________________________
39
Included are all permanent fixtures and all property that
integrally belongs to or is part of the Real Estate, whether
attached or detached, such as light fixtures, shades, rods,
blinds, awnings, windows, storm doors, screens, plumbing
fixtures, water heater, water softener, air conditioning
equipment, built-in items, outside television antenna,
fencing, gates and landscaping.
2. PRICE. The proposed purchase price is $0.00, of which $0.00
would be deposited with Seller, or Sellers agent, upon
acceptance of a binding Purchase Agreement. Buyer would pay
the balance to Seller at closing.
3. POSSESSION. Possession would be given on
__________________, or sooner by mutual agreement.
Settlement would be made at the closing, immediately prior to
possession.
4. INSPECTION. After the final acceptance of a binding
Purchase Agreement, Buyer may have the Real Estate inspected
by a person of Buyer's choice to determine if there are any
structural, mechanical, plumbing or electrical deficiencies,
structural pest damage or infestation, any unsafe conditions or
other damage, including the presence of radon gas, any leadbased paint hazards, and inspections for other conditions that
are customary to the locality and/or that are required by law.
5. CONDITIONS. Buyer's obligations under the Purchase
Agreement would be subject to:
a. Receipt by Buyer of financing, in the amount of $0.00, and at
an interest rate not to exceed 0.00 %, financed over a period of
0 years or more, to finance Buyer's purchase of the Real
Estate.
b. Sale by Buyer of Real Estate located at
___________________________________,
_________________________, _________________________ on
terms reasonably satisfactory to Buyer.
40
Buyer would agree to satisfy or release such condition(s) by
__________________.
6. STANDARD PROVISIONS. The Purchase Agreement will
include the standard provisions that are customary to the
locality and/or that are required by law.
7. ADDITIONAL PROVISIONS.
_____________________________________________
8. STAND STILL. Seller shall not initiate or carry on
negotiations for the sale of the Real Estate with any party other
than Buyer unless either (1) Buyer or Seller fail to enter into a
binding Purchase Agreement by __________________, or (2)
Buyer and Seller agree in writing to abandon this Letter of Intent.
9. NON-BINDING. This Letter of Intent does not, and is not
intended to, contractually binds the parties, and is only an
expression of the basic conditions to be incorporated into a
binding Purchasing Agreement. This Letter does not require
either party to negotiate in good faith or to proceed to the
completion of a binding Purchase Agreement. The parties shall
not be contractually bound unless and until they enter into a
formal, written Purchase Agreement, which must be in form and
content satisfactory to each party and to each party's legal
counsel, in their sole discretion. Neither party may rely on this
Letter as creating any legal obligation of any kind.
Notwithstanding the provisions of this paragraph to the
contrary, Seller and Buyer agree that the above paragraph
entitled "Stand still" shall be binding, regardless of whether a
binding Purchase Agreement is entered into by the parties.
If you would like to discuss a sale of the Real Estate with the
undersigned on these general terms, please sign and return a
copy of this Letter of Intent to the undersigned at your earliest
convenience.
Sincerely,
41
BUYER:
____________________________________
___________________________________
The above Letter reflects our mutual understanding and sets
forth the basis for proceeding to negotiate a Purchase
Agreement as outlined above.
SELLER:
____________________________________ DATE:
_____________
___________________________________
Make It Legal
The Intent to Purchase Real Estate should be signed by the buyer and
submitted to the seller for the seller's consideration and signature. The
Letter should be signed by all buyers and by all sellers. It is not necessary
that the document be witnessed or notarized.
Copies
Give a signed copy of the letter to each party to the pending Agreement.
Other Information
After all parties have signed the Letter of Intent, it is expected that they will
continue negotiations to finalize the details of the proposed sale. Such
final details should be included in a new document, the Purchase
Agreement, which will be a binding contract, obligating the seller to sell
and the buyer to buy, although it may be made subject to certain
contingencies. As the seller you aren’t obligated to have the offer to
Purchase Agreement drawn up. The Buyer may want to do this and have
their lawyer give them the green light on the deal at the same time.
11. SOLD! Or is it? CLOSING THE DEAL
Now that you have a firm offer completed time is of the essence.
As mentioned earlier you have more at stake presumably than
the purchaser as you have trusted them to make all attempts to
close the sale. You have basically taken your home off the
42
market and in so doing, have lost any momentum you may have
gained. So now all your effort goes to completing this sale.
Canadians need to get their offers to their lawyers – both buyers
and sellers – as quickly as possible because depending on the
closing date, there is a quite a bit to be done. The lawyers will be
in touch, each doing their necessary jobs to complete the
transaction.
In the U.S. you need to contact your escrow agent and open an
account with them so they can take charge and do the
necessary steps to complete the sale. These people are
professionals and will see to all the details such as title
searches, verifying conditions, documenting mortgage
information etc. It’s a good idea to keep in touch with the escrow
company during this phase to ensure your hard earned sale is
progressing as expected.
Both parties to the transaction will have various fees to pay and
your lawyers can inform you of how much and when these fees
are due. From you the seller’s standpoint, you shouldn’t feel the
pinch out of pocket as they will just deduct your disbursements
(closing costs) from the proceeds of the sale.
The following work sheet is intended to act as a reference guide
to help you as the private seller keep track of all the closing
details. Using this work sheet will help you converse with the
lawyers and escrow agents more intelligently.
HOME CLOSING WORKSHEET
__________________
SELLER INFORMATION
43
Name:
Address:
___________________________________
_________________________
_________________________, ___ __________
SSN:
___________
Home Phone: ______________
Work Phone: ______________
Extension: ______
Name:
Address:
___________________________________
_________________________
_________________________, ___ __________
SSN:
______________
Home Phone: ______________
Work Phone: ______________
Extension: ______
REAL ESTATE AGENT(S) IF ANY. (LEAVE BLANK IF PRIVATE SALE)
_____________________________
------------------------------------------------PREPARATION OF HOME – CHECKLIST
(BUYER REQUESTED FOR SALE COMPLETION)
INTERIOR:
Fireplace Cleaning
Painting of Walls
Carpet Cleaning
Window Cleaning
Drapery Cleaning
Closet Cleaning
Bathroom Cleaning
Floors Polished
Appliance Cleaning
Kitchen Cabinet Cleaning
Operation of Stove
Operation of Oven
Operation of Disposal
Operation of Light Switches
Repair Faucets
Repair Door Knobs
Repair Doors
Replace Light Bulbs
COST
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
PRIORITY
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
44
Replace Doormats
$0.00
__________
EXTERIOR:
Lawn Mowed/Watered
Shrubs Trimmed/Watered
Flowers Trimmed/Watered
Trees Trimmed
Driveway Repaired/Cleared
Sidewalks Repaired/Cleared
Windows Repaired
Mailbox Repaired
Garage Cleaning
Chimney Cleaning
Painting of Walls
Animal Deposits Removed
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
__________
MISCELLANEOUS:
CLOSING COSTS WORKSHEET
SELLING PRICE:
SALES COSTS:
Real Estate Commission if any
______________
SELLER
BUYER
N/A_______________? ___
LOAN COSTS:
Loan Origination
Loan Discount (Points)
Appraisal
Credit Report
Lender's Inspection
Mortgage Insurance Application
Assumption
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
TITLE CHARGES:
Settlement/Closing
Abstract/Title Search
Title Examination
Title Insurance
Document Preparation
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
45
Notary Fees
Attorney Fees
Survey
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
INSURANCE:
Property Insurance:
0 month(s) at
$0.00 per month =
Total $0.00
$0.00
$0.00
Mortgage Life Insurance:
0 month(s) at
$0.00 per month =
Total $0.00
$0.00
$0.00
TAXES:
Local Property:
0 day(s) at
$0.00 per day =
Total $0.00
$0.00
$0.00
County Property:
0 day(s) at
$0.00 per day =
Total $0.00
Special Assessments
$0.00
$0.00
$0.00
$0.00
RECORDING CHARGES: $0.00
Mortgage
$0.00
$0.00
$0.00
Deed
Mortgage
Mortgage Release
Transfer Taxes
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
$0.00
TOTAL SETTLEMENT COSTS:
$0.00
$0.00
NET PROCEEDS TO SELLER:
____________________
$0.00
MISCELLANEOUS CHARGES:
PROGRESS CHART
46
SCHEDULED DATE
DATE COMPLETED
PRIVATE SELLERS CHECKLIST
:
Buyer's Offer to Seller
__________________
__________________
Acceptance from Seller __________________
__________________
Counter Offer from Seller __________________
__________________
Acceptance from Buyer __________________
__________________
Final Acceptance
By Buyer & Seller
__________________
__________________
Earnest Money Deposited __________________
__________________
Release of Contingencies __________________
__________________
Closing Date
__________________
__________________
LENDER:
Interest Rate/Points
__________________
__________________
Credit Report Received __________________
__________________
Loan Sent to Underwriter __________________
__________________
Appraisal of Property
__________________
__________________
Survey of Property
__________________
__________________
Loan Approval
__________________
__________________
Title Examination/Report __________________
__________________
Title Insurance
__________________
__________________
Property Insurance
__________________
__________________
Final Instructions for Home Closing Worksheet
__________________
47
The Home Closing Worksheet is not a legal document and does not require
any signatures, witnesses, or notarization.
This worksheet is designed to help the potential seller prepare the home
for closing and is meant as a reference guide only. You may want to give a
copy to the sellers so you can be assured they know what their
responsibilities to the completed sale are.
As you can see there is much to think about after the Purchase
Agreement has been signed and copies delivered. Make sure the
lawyers and or the escrow company has the paperwork in a
timely fashion because they have quite a bit of work to
accomplish before closing. When the transaction is in the hands
of the professionals you can begin to breathe easier. Provided
you meet your responsibilities to the purchaser such as repairs,
inclusions in place etc. (they will likely request a personal
inspection before closing to verify you’ve done what they’ve
asked of you) then the closing should continue without any
hitches.
Closing a sale can be very stressful especially for the
purchasers. Try to make them feel comfortable at all times and
cooperate with attorneys and escrow agents to ensure a smooth
transition. If any last minute glitches occur, remain calm and let
the attorneys deal with it. If necessary you can contact the
purchasers directly to try and rectify any last minute problems
as you’ve presumably gained their trust and this should assist
matters.
You will be asked to meet with your closing professional to sign
paperwork and transfer keys etc. and the only thing left to do is
CONGRATULATE YOURSELVES ON
A JOB WELL DONE!
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Appendix A
REAL ESTATE TERMINOLGY
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AMORTIZATION - The number of years it takes to repay the entire amount of
a mortgage.
APPRAISAL - An estimate of a property's market value, used by lenders in
determining the amount of the mortgage.
APPRECIATION - The increase of a property's value over time.
ASSESSMENT - The value of a property set by the local municipality, for the
purposes of calculating property tax.
ASSUMABLE MORTGAGE - A mortgage held on a property by the seller
that can be taken over by the buyer, who then accepts responsibility for
making the mortgage payments.
BLENDED MORTGAGE - A combination of two mortgages, one with a higher
interest rate than the other, to create a new mortgage with an interest rate
somewhere between those two original rates.
BLENDED MORTGAGE PAYMENTS - Equal or regular mortgage payments,
consisting of both a principal and an interest component. With each
successive payment, the
amount applied to interest decreases and the amount applied to the principal
increases, although the total payment doesn't change. (Exception: see
Variable-Rate Mortgages.)
BUY-DOWN - When the seller reduces the interest rate on a mortgage by
paying the difference between the reduced rate and market rate directly to the
lender, or to the purchaser, in one lump sum or monthly installments.
CLOSED MORTGAGE - A mortgage that cannot be prepaid, renegotiated or
refinanced during its term.
CLOSING - The real estate transaction's completion, when the parties
involved agree that all legal and financial obligations have been met, and the
deed to the property is transferred from the seller to the buyer.
CLOSING COSTS - Expenses in addition to the purchase price for buying
and selling a property.
CLOSING DATE - The date on which the title and keys to the property are
transferred from the seller to the buyer, and the money is paid.
COMMON ELEMENTS - The portions of a condominium development owned
in common (shared) by the unit owners.
CONDOMINIUM - Shared ownership in property. Owners have title
(ownership) to individual units and a proportionate share in the common
elements.
CONVENTIONAL MORTGAGE - A first mortgage issued for up to 75% of the
property's appraised value or purchase price, whichever is lower.
COUNTEROFFER - One party's written response to the other party's offer
during negotiation of a real estate purchase between buyer and seller.
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CURB APPEAL - How your home shows to a prospective buyer from the
street. Is it eye-appealing from the curb?
DEBT SERVICE RATIO - The percentage of a borrower's gross income that
can be used for housing costs, including mortgage payment and taxes (and
condominium fees, when applicable).
DOWN PAYMENT - The difference between a property's purchase price and
the amount financed.
EASEMENT - A legal right to use or cross (right-of-way) another person's
land for limited purposed. A common example is a utility company's right to
run wires or lay pipe across a property.
ENCROACHMENT - An intrusion onto an adjoining property. A neighbor’s
fence, storage shed, or overhanging roofline that partially (or even fully)
intrudes onto your property is examples of encroachments.
EQUITY - The difference between a property's purchase price and the
amount financed.
ESTOPPEL CERTIFICATE - A written statement of a condominium unit's
current financial and legal status.
FIRST MORTGAGE - The first security registered on a property. Additional
mortgages secured against the property are "secondary" to the first mortgage.
FORECLOSURE - A legal process by which the lender takes possession and
ownership of a property when the borrower doesn't meet ("defaults on") the
mortgage obligations.
F.S.B.O. - For Sale by Owner
HIGH-RATIO MORTGAGE - A mortgage for more than 75% of a property's
appraised value or purchase price.
INTEREST - The cost of borrowing money.
JOINT TENANCY - A form of ownership in which two or more individuals
(often spouses) have an equal share in the ownership of a property. In the
event of one owner's death, his or her share is automatically transferred to the
surviving
owner(s), apart from the deceased's will.
LEVERAGE - Controlling a large asset with a relatively small amount of cash.
In real estate, $25,000 down payment (or less) can be used to purchase
(control) a $100,000 home, for example.
LIEN - Any legal claim against a property, filed to ensure payment of a debt.
LISTING AGREEMENT - The contract between the listing broker and an
owner, authorizing the REALTOR to facilitate the sale or lease of a property.
LISTING BROKER - The REALTOR who signs a contract with an owner to
sell the property.
MAINTENANCE FEE - A monthly fee paid by condominium owners for
maintaining the development's common areas.
MORTGAGE - A contract between a borrower and a lender. The borrower
pledges a property as security to guarantee repayment of the mortgage debt.
50
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MORTGAGE BROKER - A licensed individual who, for a fee, brings together
a borrower in search of a mortgage and a lender willing to issue that
mortgage.
MORTGAGEE - The lender.
MORTGAGE INSURANCE - Government-backed or private backed
insurance protecting the lender against the borrower's default on high-ratio
(and other types of) mortgages.
MORTGAGE LIFE INSURANCE - Insurance that pays off the mortgage debt,
should the insured borrower die.
MORTGAGE PAYMENT - The regular installments made towards paying
back the principal and interest on a mortgage.
MORTGAGE TERM - The length of time a lender will loan mortgage funds to
a borrower. Most mortgage terms run from six months to five years, after
which the borrower can either repay the balance (remaining principal) of the
mortgage, or
renegotiate the mortgage for another term.
MORTGAGOR - The borrower.
MULTIPLE LISTING SERVICE (MLS®) - A system for relaying information to
REALTORS about properties for sale.
OPEN MORTGAGE - A mortgage that can be prepaid or renegotiated at any
time and in any amount without penalty.
PARTIALLY OPEN MORTGAGE - (Also called a "partially closed" mortgage.)
Allows the borrower to prepay a specific portion of the mortgage principal at
certain times with or without penalty.
PORTABILITY - A mortgage feature that allows borrowers to take their
mortgage with them without penalty, when they sell their present home and
buy another one.
PREPAYMENT PRIVILEGE - A mortgage feature that allows the borrower to
prepay a portion or all of the principal balance with or without penalty. This
privilege is frequently restricted to specific amounts and times.
PRINCIPAL - The mortgage amount initially borrowed, or the portion still
owing on the mortgage. Interest is calculated on the principal amount.
RATE (Interest) - The return the lender receives for advancing the mortgage
funds required by the borrower to purchase a property.
REALTORS - Real Estate Professionals who are members of a local real
estate board and the Canadian Real Estate Association. Only these
professionals can call themselves REALTORS.
REFINANCING - The process of obtaining a new mortgage, usually at a
lower interest rate, to replace the existing mortgage.
RESERVE FUND - The portion of a condominium maintenance fee that is set
aside to cover major repair and replacement costs.
SECOND MORTGAGE - A second financing arrangement, in addition to the
first mortgage, also secured by the property. Second mortgages are usually
issued at a higher interest rate and for a shorter term than the first mortgage.
51
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SECONDARY FINANCING - Second, third, fourth, etc. mortgages, secured
by a property "behind" the first mortgage.
SELLING BROKER - The REALTOR who actually finds the buyer.
TAKE-BACK MORTGAGE - See Vendor-Take-Back Mortgage.
TERM - See Mortgage Term.
TITLE - The legal evidence of ownership of a property.
TITLE SEARCH - A detailed examination of the ownership documents to
ensure there are no liens or other encumbrances on the property, and no
questions regarding the seller's ownership claim.
UNIT - Term used to describe the individual home or apartment held by the
owner within a condominium development.
VARIABLE-RATE MORTGAGE - A mortgage for which payments are fixed,
but whose interest rate changes in relationship to fluctuating market interest
rates. If market rates go up, a larger portion of the payment goes to interest. If
rates go down, a large \ portion of the payment is applied to the principal.
VENDOR-TAKE-BACK MORTGAGE - When sellers use their equity in a
property to provide some or the entire mortgage financing in order to sell the
property.
WEEKLY PAYMENTS - Mortgage payments made weekly or 52 times per
year.
ZONING REGULATIONS - Strict guidelines set and enforced by municipal
governments regulating how a property may or may not be used.
The Rogue Ex-Realtor
Richard Embro-Pantalony had been involved in real estate as an agent,
investor and real estate Internet entrepreneur for more than 30 years.
During this time Richard has interacted with and represented homebuilders
and developers as well as many Real Estate brokers from
different International and Independent Companies.
He is an experienced real estate investor and proved that
you really can buy property with little or no money down. He
also studied as a Paralegal and started a small legal
practice specializing in small claims court representing
corporate client collections and claims as well as landlord and tenants
litigation representing builders, landlords and property management
companies.
He is a qualified law clerk and has extensive sales and marketing expertise
gained from years of building and maintaining clientele in these specific
industries, particularly business-to-business direct sales.
52
Richard has gained experience advertising and marketing on the Internet
as he produced and marketed his own automobile advertising magazine
and owned one of the first used automobile websites on the Internet over
14 years ago.
The Internet has become an informative source for the public to educate
themselves before making a major purchase. Richard researched the latest
Internet technologies available and by merging the new technology
available online with his unique home selling business model, he intends
to shake up the real estate industry. It is intended as a potentially explosive
wake up call to change current real estate business practices. His purpose
is to change the way all real estate is bought and sold.
In the past, Richard spent many hours helping people sell their home’s
privately with the understanding if they didn't sell it, he would market their
homes through MLS. It was during this period that Richard began seeing
the need for an alternative to the MLS system. Agent and Broker fees were
a constant complaint during the home selling process for many of his
clients. There had to be a better way to assist the home seller market their
house without having to pay thousands in brokerage commissions.
53