Selling a house is no easy feat, especially if you want to sell it via private channels-that is, you want to bypass the traditional channel of enlisting the help of a real estate broker or another property specialist in your area. Don't worry, though, because taking a specific approach and doing your homework beforehand will help you avoid some of the pitfalls that typically come with a private property transaction.
Selling a house privately has its pros and cons, and my goal here is to break them down for you so you know what you are getting yourself into. At any point during the sale process, don't hesitate to seek the expertise of professionals as diverse as an appraiser, a home inspector, real estate lawyer, and a property broker.
Familiarize Yourself with Real Estate
I'm not saying you should go back to school or enroll in a part-time program about real estate, but you should do a bit of research about the real estate profession if you want to sell your house privately. Again, the main goal is to be properly equipped to handle the often convoluted process of putting a property on the market, fielding calls from prospective buyers, and finally selling the house.
Learn more about real estate brokers; understand what they do and why they are good at it, and zero in on the skills required to successfully spearhead a real estate transaction. Next, familiarize yourself with what an appraiser does, as well as the important elements that a home inspector pays attention to when performing his or her duties. Finally, learn a bit about the real estate attorney profession.
Delving into the details of each job is not sufficient, though. Figure out what the law says and how each professional interrelates with another, as well as the scope of each specialist's legal responsibility. Once you have that knowledge-an exercise that could take you weeks or months, depending on your intellectual or professional background-you should be ready to jump on the real estate private sale bandwagon.
Fix Your House
Yes, you want to sell your house privately, and probably you want the property to fetch a high amount. Start by fixing up your property and don't spare any cent while doing it, says Leonia W., an experienced appraiser who has advised many home owners on house repairs and how to bring an apartment up to structural and architectural polish. She says you should enlist the help of a home inspector, who normally would look around the house and tell you if anything is wrong with things like major systems, water supply equipment, and electric circuitry. The goal, again, is to present a nicely maintained and structurally sound abode to potential buyers, so that they can feel comfortable doling out top dollar to purchase your house.
Get a Lawyer
I know you want to sell your residence privately, but there are things you cannot do on your own. The legal aspect of the transaction is one of those. Unless you are a trained attorney or possess savvy in real estate legalese, you should not attempt to handle the legal aspect of the house sale yourself. An attorney can walk you through the law of the land in your residence area, draw up a sale contract, negotiate better terms with both the lender and the buyer, and help you understand key documents during the closing process.
Don't be greedy and refuse to fork over a few hundreds to compensate a real estate lawyer. Think about it: you would probably sell the house for a few hundred thousand dollars-or less, depending on where you live-so what is a few hundred dollars vs. the potential loss you could incur if you didn't understand important legal terms in your mortgage note, or if something happened and you didn't have the right insurance policy to shield you against personal liability?
Research Your Market
Spend some time canvassing your neighborhood to have a feel of the local market, especially the average asking price for houses that are structurally and architecturally similar to yours. Having an idea of property pricing will help you set a reasonable price-and not leave too much money on the buyer's table or set a price that is beyond the average in your local market.
Second, call a local real estate broker and just say something like "I was wondering how much a house like mine (or the neighbor's) would fetch in today's market." An experienced broker automatically would press you for further details, but don't give in and tell him or her the truth. You can simply say that you were just wondering.
Third, read the classified section of your local newspaper to see how house prices are trending overall.
Fourth, go online and use national portals like Yahoo! Homes to have a better idea about pricing. Some sites even help you evaluate your house's worth by entering key elements, such as neighborhood and ZIP code, year, design, and improvements.
Be creative when advertising your property, and do it smartly and affordably. Ideally, I would not recommend you spend any cash on publicity. You still can advertise for free and get a good return on the time and effort you put into the marketing campaign.
Start by spreading the word around you. Tell family members, colleagues, and friends that you plan to sell your abode. Reveal your intentions to worshipers at your local faith center; don't forget to talk about the upcoming sale at your son's or daughter's soccer practice, so that other parents know your intentions. You get it: the goal is to publicize your intention as much as possible around you, everywhere you go.
Next, hop on the Internet bandwagon and make as much publicity as you can on social networks, such as Facebook, Google Plus, and Twitter. I love them because they are free and provide you with a great platform to advertise your house and show the sleek pictures you've spent so much time taking. Again, the goal here is to save you money, but do things as qualitatively as possible. You also can tour several online forums and post your ad there.
Now, if you have tried all these options unsuccessfully, or you don't mind spending some cash on advertising, I would suggest you place an ad in your local newspaper or on a specialized portal like Craiglist.com.
Be Ready for Visits
Before showing the house to prospective buyers, organize a last cleanup effort. If you don't have time or if housekeeping is not your forte, seek the assistance of family members along with friends and colleagues. Organize a quick barbecue session to keep the guys and ladies going, and before you know it, your house will recover the polish it had when you initially bought it.
Now that you have a house that is hygienically sound, start fielding calls from expectant purchasers. Be professional at all times, and be punctual. A real estate transaction involves a lot of money, so the buyer would expect you to show, at a minimum, some professionalism and decorum in the way you handle everything from house visit to closing. So, don't tell someone you would be home at 10:00 a.m. and still be in bed at 9:57 a.m.
Complete the Sale
If you find a buyer who is interested in your property, consult with your attorney and negotiate a price that works for you. Ask the would-be purchaser if he or she already has a pre-approval letter from the bank. If yes, that means things will go quicker and you can get your money as soon as the closing is done. So you should be a bit flexible with pricing. After closing, the buyer's lender typically would wire you the sale amount minus fees along with local and state taxes. Don't forget, though, that you may have to report on your income tax return any gain or loss generated from the transaction.
When it comes to selling your house privately, pay attention to things like the house's structural fitness, attorney representation, and closing terms and conditions. Also, remember to hire a home inspector and an appraiser to have an idea of how much your property would fetch in the open market. The pros of selling your home privately include flexibility in price, control over the whole process, and lower fees paid to any professional. The cons pertain to the fact you would need to spend much time, energy, personal resources, and money on the whole process, an exercise that could tax your physical and mental health. Also, there is a risk of legal exposure if something goes wrong and you haven't sought professional counsel beforehand.