FSBOs - A Theoretical Approach
Several months back, I made a rather exhaustive list of the various things one needs to attend to when sellers elect to sell their home themselves. This month, I have cribbed a few "outside the box" marketing ideas from CNN/Money for homeowners that are committed to selling their home themselves. What follows are some suggestions you may not have heard of before as well as some of the more obvious but frequently overlooked.
1. BE CREATIVE. Consider a lease-to-own deal, which makes it easier for cash-strapped buyers to take the plunge.
2. FIND A HOOK. When Kelly Andrews, 28 and just married, decided to sell her one-bedroom condo in February, hers was one of about a dozen on sale in a 936-unit complex. Being in public relations, though, Andrews knew to play up the condo's one unique feature: its former owners. So she called up a reporter for the local paper and told a tale of how she and the two prior owners of unit No. 163 were single women who ended up finding their future husbands there. After the paper dubbed Andrews' unit "Cupid's Condo," she was flooded with calls from single women (and agents representing them). One of those women offered to lease the unit for the precise amount of Andrews' mortgage payment. She thought this might work out even better than an outright sale, since leasing would allow her to build equity while waiting for the market to improve (Andrews hopes she can sell at a higher price).
The lesson: Highlight what makes your house special. Generic descriptions about "spacious bedrooms" or "modern appliances" are too common. Instead, "paint a lifestyle, a story". And be as specific as you possibly can. Don't simply mention that your home is near local amenities. Let buyers know they can live within "a five-iron shot of the 15th tee."
3. IT HELPS TO MARKET. The fact is, 84% of buyers search for homes online, more than double the percentage that did so in 2001. In addition to traditional spots like Realtor.com, check out alternative sites where buyers are flocking, like Craigslist.org, Realestate.yahoo.com, Zillow.com, Trulia.com and Base.google.com, Google's classified section. Because many home seekers are getting to these sites through a search engine, it's critical to offer a comprehensive description of your home, so searches will find you through any number of listed features. A simple way to generate word of mouth offline: In addition to basic marketing fliers, make up business cards with a picture of your home, contact info and the price. Cards are easier to hand out and be passed around than fliers.
4. One of the most overlooked items is Financing Options Flyers. They provide potential buyers some idea of what income will be required by the lender, what the mortgage payments will be (including taxes and insurance, etc.) and of course what loan programs are available and the current interest rates.
5. DON'T JUST SELL - SWAP. Consider swapping your home. The idea is simple. Look for like-minded sellers who'll need a new place to move into once they close their own deals. In the past year, free websites such as DomuSwap.com and GoSwap.org, along with paid services like OnlineHouseTrading.com ($19.95 to list), have cropped up to bring home swappers together. Keep in mind these services are still new. A recent search on DomuSwap showed a listing of 1,021 Florida homes but only 43 in New York. Once you post details of your property and what you're looking for in a new home - these sites will ping you back with a list of houses that come close to your wish list whose owners are interested in a property like yours. If you find something you like, just click on it and send the owner a message. Once a match is made, the transaction can move quickly. Within four days of posting their home on DomuSwap, one couple was contacted by a prospective buyer. And nine weeks later, the deal closed.
Keep in mind, you don't have to trade for equivalent value. While it's called a swap, it's really two separate transactions, where both trading partners take out mortgages based on the price they agree to pay.
6. LOCK IN A FUTURE BUYER NOW. With banks tightening lending standards, your problem might not be finding an interested buyer; it could be attracting a buyer with the means to purchase your home. One option is to give the buyer time to improve his credit or save for a bigger down payment through a lease-to-own contract.
Here's how it works: You agree to rent the property to the interested buyer. At the end of the lease, which normally lasts 18 months or less, the buyer has an option to purchase at an agreed-upon price. With the help of an attorney, you can draft these contracts however you see fit. Some homeowners, for example, charge a nonrefundable "option fee," as much as 2% of the home's value. This fee, if the renter buys, is typically applied to the down payment, and in the event that he decides not to purchase the property it is forfeit to the seller.
Copyright © 2020 Rod Haase. All rights reserved.