How to Sell Your Home Without a Real Estate Agent

Considering the rapid rise in home prices over the past several years, home sellers are taking a hard look at the commission they have to pay to a real estate brokerage to market and sell their home. Real estate commissions vary across the country; they average in the four to seven percent range.

According to the 2004 National Association of RealtorsŽ (NAR) Profile of Home Buyers and Sellers fourteen percent of homes were sold by-owner. The NAR study listed the two most difficult tasks for for-sale-by-owner (FSBO) were preparing and fixing up the home for sale and getting the pricing right.

Invite three full-time mid to high producing agents to your home to give you an opinion of price. Understand that if the three price opinions are not what you think the property is worth, you should understand the danger of an over-priced property. Homes that are over-priced have been studied by large national real estate brokerages and over-priced homes take longer to sell and sell at a lower price as a percentage of the original list price.

Ask the agents to give you constructive feed back on what you should do to make your home visually appeal to the majority of buyers. Below are some staging tips to prepare your home for market.

1) Research how to "stage" your home to maximize its appeal to homebuyers by creating a spacious and pleasant home environment for buyers.ˇStart by removing the first thing that gets in your way.

ˇTake one or more major pieces of furniture out of every room to make it more spacious.

ˇKeep matching furniture pieces together to build uniformity in a room.

ˇCreate seating areas where two or more people can talk.

2) Keep the eye moving when staging a room.

ˇUse furniture placement to direct the buyer's eye toward a room's features.

ˇMove large pieces of furniture away from windows.

ˇPlace large furniture at entry end of room to lighten visual load at opposite end of room.

ˇUse area rugs to anchor seating arrangements.

ˇHave your dining table closed to its smallest size.

3) Use furniture placed on angles in a room to give it a quick update.

ˇAngle a bed in a corner of a bedroom to focus attention.

ˇAngle furniture in a V shape in living and family rooms.

ˇAngled furniture can help fill a room short on furniture and lend a designer look.

4) Create vignettes in rooms to set mood.

ˇBreakfast tray with coffee cups, newspaper, flower vase on bed.

ˇSet the dining room table with linen tablecloth, china, silverware,and stemware.

ˇSet up game table for chess, bridge, or backgammon.

5) Effective model homes focus on creating the right environment.

ˇDe-clutter so buyers can overlay their furnishings and lifestyle.

ˇClean, fresh, and new smell.

ˇAttention to detail. Clean rooms and landscaping trimmed.

ˇSubtle background music, classical, light jazz, or rock.

ˇInterior décor and wall colors accent home's architectural features.

ˇLive plants or fresh flowers add finishing touches.

6) Understand decorating basics that can guide you to repositioning a room.

ˇColor. A little goes a long way.

ˇScale. Do furniture sizes complement or overwhelm a room?

ˇPattern. Easy does it to avoid distracting from room itself.

ˇLighting. Use it to define dark corners. Helps to fill out a room.

ˇFocal point. Fireplaces, views, art, find one in every room.

ˇTexture. Adds visual interest, warms cold spaces and finishes.

Understanding and completing the paperwork in a real estate transaction was number three of the most difficult tasks according to the NAR study. Once your home is priced right and ready for market you should retain a real estate attorney to help you review contracts, disclosure forms and to help you qualify potential buyers of your home. An experienced real estate attorney can help you avoid the common pitfalls in real estate negotiations and will facilitate a smooth transaction.

Here are some cliff-notes on real estate contracts.

ˇUse an approved real estate contract by your state real estate attorney association or local Board of RealtorsŽ.

ˇReal estate contract. A binding agreement between buyer and seller. It consists of an offer and an acceptance as well as consideration (i.e. money).

ˇAcceptance. Agreement by the parties of the terms of a contract.

ˇContract length. Research customary contract lengths, the standard is 45 days from contract to closing.

ˇHave sold comparables properties on hand for prospective buyers.

ˇComparable. Closed prices for similar homes in age, condition, location and size.

ˇPrice. Study average sold prices as a percentage of lists in the last six months.

ˇLow-ball offers. Buyers should offer over 87% of list if they are serious, otherwise you will should not responding at all to low-ball offers.

ˇCounteroffer(s). The response to an offer or a bid by the seller or buyer after the original offer or bid. Request all counteroffers to be in writing.

ˇRequire all buyers to present the highest level of mortgage commitment with their contract.

ˇMortgage Commitment. A document by a mortgage lender that commits the lender to providing a loan at agreed terms and conditions.

ˇMortgage term, rate and amount. Look for strong down-payments of thwenty-percent or more. Interest-only loans signal that the buyers could be stretching to qualify for a loan.

ˇCash offers in lieu of mortgage financing should be confirmed with a letter from your financial institution stating funds are on deposit to close the contract.

ˇFederal law requires Lead-Based Paint Hazard disclosures.

ˇLead-Based Hazard. A disclosure of reports or knowledge of Lead-Based Hazards. Buildings built after 1978 do not present Lead-Based Hazards.

ˇRead Protect Your Family From Lead in Your Home by the US EPA.

ˇReal property disclosures required by the federal or your state Written statements by the seller(s) of a property disclosing any known defects.

ˇLocal disclosures. Local requirements of disclosure that the seller provides and the buyer acknowledges, such as certificates of occupancy.

ˇW-9 form. An IRS form requesting taxpayer identification and certification numbers of buyers to receive interest on earnest money from delivery to closing.

ˇSubject to appraisal. Most contracts as part of the mortgage contingency require the subject property to appraise at a minimum of contract price.

ˇAppraisal. An objective third parties opinion of value by a licensed or certified appraiser.

ˇEarnest money deposit. Money given to the seller at the time the offer is made as a sign of the buyer's good faith.

ˇResearch customary earnest money deposits as they vary. The larger the deposit, the increased motivation you buyers show to perform the contract.

ˇRefund of earnest money deposits. Contracts should provide for refund of the entire earnest money deposit within agreed contingency periods. Seller's attorney should hold earnest money deposits.

ˇAttorney approval period. Your attorney reviews and makes changes to the contract, typically 5-7 business days.

ˇProperty inspection period. The right under a contract for the buyer at their expense to discover the actual condition of the property. This period typically runs 5-7 business days.

ˇWell and septic inspections. These are independent of structural and mechanical inspections.

ˇTimelines for contingencies run concurrently.

ˇContingency. A provision in a contract requiring certain acts to be completed before the contract is binding.

ˇClosing/ escrow date. The date of the end of the transaction process where the deed is delivered, documents are signed, and funds are dispersed.

ˇPossession date. The date agreed by contract when the buyer can occupy the property.

ˇFinal walk-through. A property tour before closing or escrow that permits the buyers one final verification of condition, agreed repairs and personal property.

ˇTax pro-rations. The amount of credit given to buyers at closing for unpaid property taxes, when taxes are paid in arrears. Pro rations should always be more than 100 %.

ˇPersonal property. List and initial all personal property included with the sale, such as air-conditioners, appliances, and playground equipment.

ˇHome sale contingency. The contract is contingent on the sales of the buyer's property.

ˇBuyers show motivation when including a home sale contingency by having their current property already on market.

ˇHome closing contingency. The contract is contingent only on the successful closing of an existing real estate contract.

Marketing your home to prospective buyers should include these methods.ˇA professionally painted yard sign.

ˇNewspaper advertisements classified and photo.

ˇPublic and broker open houses.

ˇInternet: virtual tour and at least eight photos.

Mark Nash is a real estate author of four books, his latest "1001 Tips for Buying and Selling a Home" is available in bookstores nationwide and on Amazon.com. Mr. Nash is a full-time real estate agent in Chicago and has shared his residential real estate tips with CBS The Early Show and Bloomberg TV.Real estate journalists from around the country turn to him to help their readers understand the real estate market.

Visit him online at http://www.1001realestatetips.com and http://www.marknashrealtor.com