A Guide to Private Sales.
With the market experiencing constant change, it’s natural that Sellers will consider private sale to maximise their profit. This is a challenging market and you need to be prepared to sell, so here are a few tips that might help: 1. Make sure everything in your house is ideal or similar to it, build-wise. Ninety-nine percent of for sale by owner homes on this market will be checked for faults, so you need a knowledgeable third party to go through your home to make sure they pass home inspection. You may also want a licenced Home Inspector to employ a pre-sale home inspection.
2. I recommend that you tell the Home Inspector in writing of what he discovers. If you knew them and did not reveal them at the time of the Bid, these issues might prove to be an out for a Buyer at or before the close time.
3. Have a 3rd party with a background in design, advise you to de-personalize your home and make it stand out on the market. I pay for a professional Stager to visit all my listings and give them a thorough report before placing them on the market and I know it gives an benefit to my listings.
4. Especially if that includes storing a lot of clutter, follow their advice. Instead of loading the basement or garage down to the max, I would recommend storage off site. It only reveals one of your home’s limitations to the Buyer.
5. When your home looks fantastic, the number one marketing move is pricing correctly. Make sure you know what the new deals are (not listings because they might be overpriced) and then the your house to show that you don’t use an agent. If you privately give your home, the buyer will have to perceive a profit. Private sellers make the greatest error is selling their home within the price range and not showing that there is no fee there.
6. Develop your home’s Web presence. Very few people buy things today without looking on the internet so that the biggest audience out there will access your home-sale web site. Note that the competition is national, regional and local MLS, who have invested years and thousands of dollars in top positions, not to mention the Brokers and Franchises.
7. Make sure you employ a professional photographer who has Virtual Tours or Video on sale. Buyers want as much details as they can before even seeing the house. I believe so strongly in these picture formats that I also pay for certain pictures of empty houses or those that need significant renovations. Don’t waste your time or customers by referring to attributes that aren’t there or might-be-potentially there … Let the buyer make a decision.
8. Upload your website at for sale by owner. This provides significant visibility.
9. Make sure you or someone else answer any contact phone numbers or emails immediately. I will reply as soon as I can, unless I am in a business meeting. Buyers, many from a generation that sees microwaves as slow cooking …. you have to be ready to respond to ASAP.
10. Realize that you are going to get a lot of phone calls from buyer agents who are going to tell you they have clients that are perfect for your property. They might be right so let them show off your house. Remember they aren’t going to work for free like you so your pricing should take that into consideration.
11. Open Houses is the way many buyers surf the marketplace to purchase. Make sure you use signs correctly. The City demands that all signs of the Open House reveal the open house address and time. Make sure you have a Buyer’s eye on the local stock of houses in your town. You’ll need to be the best on the market that day, to be noticed.
12. You should have a knowledgeable third party (Lawyer) lined up and ready to take you through the contract if you receive an offer on your property, explain the clauses and watch for conditions or timing that may pose future problems. When I sit down with customers their first thought is quality, the terms and conditions are mine. I have seen so many occasions when sellers have become so obsessed with price that they have overlooked many "small" issues which have become "massive" ones by closing. The 3rd party’s job is to ensure that all the excitement isn’t missing those issues. Make sure that if the third party also gives you pricing advice the they know the market and have an understanding of negotiation skills so that they can see the problems from the buyers side, if possible, to give you a glimpse of reality when you have a fancy ride.
Note: I have always run through my for sale by owner bid with an office manager or lawyer for that essential third party point of view when I purchased or sold for myself. We have made my own bid to me often, so that I can have the proper emotional space to make the right decisions.
13. The Real Estate Board has a customer information page that displays six of the big types with the plain language definitions used. For more details please follow this link.
14. Put all communication between Buyer and Seller after the 3rd Party has accepted the Purchase and Sale Agreement, by email rather than by telephone. Make sure that everything is stored in an online archive until it closes and up to 6 years later in case only.
15. Do not use the same attorney to close the Buyer and Seller deal, so you can "save" money. Make sure all parties involved in the transaction report their relationship to either you or the Buyer in writing. REALTORS shall at the time of bid also report their fiduciary obligation in writing.
16. Usually, the Agreement would require the Buyer to visit your property for Building inspection and measure visits. Be sure that both the number of visits and the duration of the contract stipulate these, otherwise you might be in for a huge surprise when all the 20 long-lost buyers’ family members meet with three vendors looking to bid for quotes. Typically at mutually agreeable times I recommend two or three visits of no more than one hour. I’d say that you’re not there and that all questions and answers should be answered in writing, so there’s no misinterpretation later … the old one he said.
17. Request for a substantial deposit, 5-10 percent of the purchase price to be kept in confidence by your lawyer. The deposit number gives you a sense of Buyer’s seriousness.
18. Financing and Building Inspection Conditions: Most offers in this market will have conditions that have to be met within a specified period of time. Keep the time as short as possible. I suggest no more than three business days for a Building inspection or financing. Hopefully the bank has pre-approved your buyer and then there is nothing to do but a simple evaluation of your land. Building inspectors should be able to complete a thorough inspection and send the report to the buyer within 3 Banking days. Be aware that if the Inspection is of low quality, the Buyer will seek to renegotiate the price.
19. Conditional on Buyer’s Property Sale: This is a tough one, made tougher because you have no control over the Buyer’s Property’s asking price. You could have conditionally sold your property at a great price, and then the buyer wants to overprice their home. Essentially, with no assurance that the buyer will get a good deal and start the ball rolling, the home is pulled from the marketplace. You may want to ask the buyer to provide a Qualified appraisal of his property before you agree to this Condition.
20. Neither consider cash as part of the deal. FINTRAC keeps an eye on irregular cash movements and I am allowed to request and maintain personal details from both Sellers and Buyers.