Steven Kessel, REALTOR® - YOUR STRESS-FREE GUIDE TO SELLING FSBO

YOUR STRESS-FREE GUIDE TO SELLING FSBO

Steven Kessel, REALTOR®

Table Of Contents

Is For Sale By Owner Right for You?

Common Reasons Most FSBOs Fail

Why Some FSBOs Sell and Others Don't

What Does a FSBO Really Cost?

Make Sure the Price is Right

Stage Coaching

Upgrades and Repairs

This Little FSBO Went to Market

It's Showtime!

10. It's Opening Day

11. Negotiation Prep

12. The Bargaining Table

13. How to Be a Contract Player

14. Closing Day

15. How to Declutter in a Hurry

16. Enhancing Curb Appeal

17. Let's Talk About Pets

18. What You Must Know About Appraisals

Foreword You are most likely reading this book because you're a FSBO. Pronounced Fizz-Bow sounds nasty, doesn't it? Being a For Sale By Owner can be a nasty experience. So here I am writing and publishing this book to help you. To show you the best way to be successful in this endeavor. Who knows maybe if this book helps, you might send me a check. But only for the book. Not Real Estate Services. Or just maybe you get so overwhelmed by the process that you feel like you're drowning. Totally stressed out. Not knowing what to do next. If that happens you pick up the phone and call me. If you’re currently on the fence about hiring a Sellers Agent or considering any other agents, I highly suggest you stop your search. No one will work harder or smarter to sell your home than me. With me on your side, you simply can’t lose. After all, I'm already on your side, you're holding my book.

Wishing you the very best.

Sincerely,

Steven Kessel, REALTOR® with Future Home Realty, Inc Call me at (781) 246-1234 cell StevenKesselRealtor.com SellMyHouse.ForSale BuyYourDreamHome.com stevenkessel@usa.com

30138 Southernwood CT, Wesley Chapel, FL 33543

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A little bit about Steven... Steven is a United States Navy veteran. He is a retired Fire Lieutenant of a professional Fire Department. And has owned several successful businesses, one in which having Fortune 500 corporations as clients, of his Specialty Advertising business. Steven is now a full time REALTOR® with Future Home Realty, Inc. A leading top producing real estate brokerage in Tampa Bay Florida with over a thousand licensed real estate agents. Future Home Realty, Inc was established in 2001 and is rapidly growing as it provides excellent service in Florida’s communities. We help our clients define their goals as they pertain to real estate and help them make those goals a reality. We do not want to simply meet our clients’ expectations – we strive to exceed expectations in every way. Future Home Realty, Inc consistently ranks among the top real estate brokerages in Florida in Sales Volume and Agent Count. With expertise in Greater Tampa Bay, Greater Orlando, Greater Jacksonville, and Greater Miami – FHR agents represent buyers and sellers across all price points and geographic regions. Its size and agent count gives FHR an advantage as we connect buyers and sellers across Florida. Steven works out of the Wesley Chapel office working with buyers and sellers. Although he has access to work out of six other Future Home Realty, Inc offices throughout the Tampa Bay area. He is a member of the National Association of Realtors®, the Florida Realtors® and the Greater Tampa Realtors®. Steven is also a member of Stellar MLS.

Having been involved in the Specialty Advertising Business he will put that talent to work for you marketing your home. I help my clients meet their home selling goals by marketing for qualified buyers, negotiating the best possible price and terms, smooth the moving process, and so much more. I'm looking forward to meeting with you. Retirement had taught me that I miss serving and working with people, to help them achieve their goals and positive outcomes. So now as a REALTOR® bound by a code of ethics on this new adventure how can I serve you? Steven Kessel REALTOR® is ready to help you achieve your home buying and selling goals.

Call me at (781) 246-1234 cell

StevenKesselRealtor.com

Florida License: SL3543542 L3543542

CHAPTER 1 Is For Sale By Owner Rig y Owner Right for You? WHY SOME PEOPLE SELL THEMS ELL THEMSELVES We live in a DIY world. We swap out toilet flappers instead of calling a plumber. We Google “red spots on neck” instead of calling a doctor. And, sometimes, we market and sell our own homes—For Sale By Owner (FSBO)—instead of using a real estate professional. Sure, doing things yourself can save you money. But unless you know what you’re doing, you could flood the bathroom, mistake hives for measles, and—this is my biggest fear for you—put a house on the market in the wrong shape, at the wrong time, and for the wrong price. The result is a low sale or—gasp!—no sale at all. Sure, FSBO listings can save you some real estate commissions, typically 4% - 6%,* which is nothing to sneeze at. But, as I hope to show you, FSBOs can be penny-wise but net/net foolish. Here are some stats to chew on, thanks to the National Association of Realtors®’ Profile of Home Buyers and Sellers. • Only 8% of home sellers were FSBOs—the lowest figure since 1981. • FSBOs typically sell for less than homes marketed by a real estate professional. A study by Collateral Analytics showed that the price of an FSBO sales is about 5.5% lower than Multiple Listing Service (MLS, agent assisted) sales.

• Most FSBOs are bought by friends and family of the seller. That means the seller didn’t have to figure out how to market his home; he just called a cousin and made a deal. • 28% of homeowners who sold homes themselves did no marketing at all; 28% spread the word via friends, relatives, and neighbors. • 15% of FSBO sellers said “getting the right price” was the hardest part of selling their home.

FSBO SKILLS YOU’LL NEED

If selling a house were easy, everyone would do it. Only 8% wade into the FSBO waters because most homeowners don’t have these necessary real estate skills. Research know-how: In order to accurately price your house, you’ll need to identify comparable sales, understand economic and neighborhood trends, and keep up with mortgage and prime rates. All this takes research chops. Declutter savvy: Decluttering a house is the first step to sprucing up a sale. But you must know what to pitch and what to display. How do you make your home a place someone else can envision as theirs? Staging experience: You love that leather couch; but will a buyer? That blue accent wall in the family room reminds you of Paris at midnight, but will it make a buyer feel claustrophobic? To get the highest price for your home, you must look at it through a buyer’s eyes. Negotiating chops: You’ll have to get a rush from haggling over price, responding to contingencies (and you have to know what “contingencies” mean), and discussing what repairs you’re willing 2

to do. If negotiating makes you sweat, when was the last time you asked for a raise? Then selling your own home will be excruciating. Paperwork experience: Are you good at filling out forms, calculating percentages, dotting all i’s and crossing all t’s? Making a deal may be easy; but memorizing what you discussed is tedious and time-consuming.

HOW I CAN HELP

Sure, you can muddle your way through a sale. I will use my professional expertise to help you: • Research your local real estate market to discover trends. • Market your home to real buyers. • Manage paperwork. • Stand by your side, from placing your listing to closing on the property. • I know the real estate business, what attracts buyers and what scares them away, and how this morning’s headlines might influence this afternoon’s showing.

* There is no such thing as a standard commission.

CHAPTER 2 Common Reasons Most FSBOs Fail Fail is such an ugly word; so are “sold below listing” and “200 days on the market.” Of course, any real estate deal can go south, even ones represented by listing agents who sell homes day in and day out. In 1906 Italian economist Vilfredo Pareto helped shine light on why some homes sell, and some don’t. The Pareto principle, aka “the 80/20 rule,” found that in most endeavors, from growing peas to selling homes, about 20% of what you do matters, while the other 80% makes little or no difference at all. Sometimes, the split is 70/30 or 75/25. But the point is the same, and when it comes to real estate, the Pareto principle means: Stop trying to sell buyers on your entire home, because only 20% of your home’s features are important to the buyer, while 80% don’t matter much because most homes buyers see have the same features. The trick is to emphasize the 20% of your home that is unique, like a view of the ocean or a shady yard with mature trees. Following the 80/20 rule will save you time. Here are some unique features that will make your home stand out. Great views: Of valleys, mountain, river, lakes — any views that other comparable homes don’t have. Wildlife attractions: Perhaps your house looks over wetlands where many types of birds stop during migration, or you’ve got 4

a wildflower garden that butterflies and hummingbird frequent. Wildlife attraction can be a deal closer for nature lovers. Breathtaking sunsets: Who doesn’t love an unobstructed view of a sunset? And if your patio faces west, make sure you schedule the show around sundown and have a glass of lemonade waiting on a patio table so the potential buyer can soak up the sunset. Stone patios: If your neighbors have wood decks, your flagstone patio will stand out. Fenced-in backyard: If a buyer has kids or pets, a fenced-in backyard can be a deal-maker. Fences are expensive. And if your home has one—especially a lovely wood fence—make sure you point that out. Failing to accentuate the uniqueness of a home is just one reason a house doesn’t sell quickly … or at all. Here are other deal killers.

1. PRICING TOO HIGH

Experts say the #1 reason that listings go stale and eventually don’t sell is that owners price the property too high. Maybe fond memories make sellers think their house is worth more than the market will sustain; maybe sellers hope a big fish will bite at a high price, and if one doesn’t, they can always lower it.

Wrong!

Buyers aren’t idiots, and when big money is involved, they do their homework. Overpricing signals that a seller isn’t serious, or that he’s taking a flier and will eventually get real and lower the price. The result is a property that languishes on the market without an offer or sale. The longer a home stays on the market, the more a potential buyer wonders, “What’s wrong with this house?”

Eventually, overly optimistic owners lower the price of their homes. But the bloom is off the rose; and a seller who initially was driving the transaction finds himself chasing buyers, who become fewer as the listing becomes “stale.”

2. PROPERTY ISN'T IN TIP N'T IN TIP-TOP SHAPE

Your house has only one chance to make a good impression, the best reason to make sure the property is in white-glove condition. Unfortunately, many owners can’t see the imperfections that buyers will notice right away. When you’ve lived in a home for a long time, you can overlook nail pops, floor scuffs, and cat smells you’ve become nose-blind to. You may also not notice the weeds around foundation plants, or bird poop on walkways. These are small things that make a big impression on a buyer, who presumes that you don’t care enough about your property to give it a fresh coat of paint. And if the paint is chipped, buyers reason, what else is wrong with the house?

3. MARKETING MISSTEPS (OR NO STEPS AT ALL) T ALL)

Houses don’t sell themselves. You’ve got to spread the word, whip up interest, and target people who actually want to buy a house, rather than just spend a Sunday touring other people’s home. The Multiple Listing Service (MLS) is the first-place buyers’ agents go to find a home that fits their clients’ needs. But the MLS is for realtors only, and you’ll likely have to pay a willing Broker a flat rate of $59 to $499 to get your listing into the MLS without a seller listing agreement. You would also need to agree to a buyer agent (broker) commission, more on that later. This will

also be under a No Brokerage agreement. In other words, you're not represented by an agent or broker. With a signed listing agreement with me however, I don't charge to get your listing on the MLS. Or even for many other services I provide. Because you're willing to also pay a seller agent (broker) commission when your property is sold and closes per the listing agreement. You’ll also need to take photos, hold open houses, create brochures, and show the house—all require specific skills and talents. If you haven’t honed your marketing chops, you can spend a lot of time and money creating brochures no one reads, holding open houses that only neighbors attend, and placing ads online that don’t reach your target audience.

4. UNDERESTIMATING THE PAPERWORK

A ton of paperwork accompanies a property sale, and not knowing what paper you need to sell your home can cost you dearly. You’ll need to obtain, file, or fill out: • Contract of sale • Deed • Title report • Tax statements • Insurance information • Appraisal and inspection reports • Disclosure forms • Lien affidavits • Mortgage documents • HUD statements at closing Mishandling paperwork can wreck a sale and even put you in legal jeopardy, especially if you fail to disclose properly in writing hazards, like lead paint or any material defect, within the home. Also, all official documents and agreements involved in the sales

contract must be executed within a set, legally binding time frame.

5. IGNORANCE OF REAL ES F REAL ESTATE BASICS

You may think attracting your own buyer and skirting all real estate agent commissions is a godsend. But if you avoid all agents, then understanding all the details of the sale falls to you. That means you must become an instant expert on escrow, water rights, mortgage rates, mortgage types, property taxes, property assessments, disclosure obligations, lender requirements, and on and on. Real estate agents learn these topics during pre-licensing courses, post-licensing courses and continuing education requirements for license renewal; you’ll have to learn them on the fly.

6. PROPERTY MISREPRESENTATION

When it comes to selling property, your word is your bond. The way you describe the property—what you include, and what you omit—becomes part of a contract. If you exaggerate, misrepresent, or fail to include a problem you know exists, you risk losing a sale —best-case scenario—or gaining a lawsuit. You look at your property through years of memories, piles of receipts for upgrades and maintenance, and profit you hope to gain so you can move on or even into that condo or bigger or smaller house in Florida or else ware. This personal lens makes it hard to view a property objectively and present it neutrally. Professionals know how to describe your property in accurate, detailed, and attractive ways. Disclosure rules are different in each state, and professionals know what must be disclosed in Florida: termite infestation!—and what doesn’t: tiny chips in granite countertops.

7. RELYING ON ONLINE PRICES

Sure, Zillow will give you a “Zestimate” of your home’s value. But Zillow and other online pricing tools typically use comparable sales in public records to arrive at the best guess of your home’s value. It doesn’t figure in your backyard filled with old-growth trees, or walk-out basement, or kitchen backsplash with eye- popping glass tile. Heck, my website StevenKesselRealtor.com even has an AVM Automatic Valuation Model. I even provided you with a QR code to it. But don't rely on them, not even mine for the most accurate results. A flesh-and-blood real estate agent looks at many different factors that affect the value of your home. With the most up to date information on the MLS as well. looking at what has sold and what's being sold. We do a CMA Comparative Market Analysis using the MLS. You don't have access to that.

8. THINKING YOU CAN AVOID ALL COMMISSIONS

Just because a potential buyer sees your sign and knocks on your door doesn’t mean you’re off the hook for all agent commissions. Sometimes buyers are contractually obligated to buy a house through their buyer's agent, whether they find the property themselves or not. So, if you’re allergic to paying, make sure you find out if a would-be buyer has an exclusive contract with an agent. And you're willing to pay the commission. And let’s get real. What agent will bring a client to your home if there’s nothing in it for them? Would you spend your time working for free?

Ultimately, refusing to pay any commission at all will drastically limit your pool of buyers. So don’t cheap out. Even if you avoid a listing agent’s commission, you’ll most likely have to offer a buyer’s agent commission, typically 2.5% to 3%* of the sales price. Make sure you put that in your listing, so agents know it’s worth their time to bring you a buyer. But some may hesitate because of the risks involved dealing with someone who has no real estate knowledge. Thay also can't represent the buyer and spoon feed you too. That would be a legal conflict. But put out a commission offer, and many ethical agents will be glad to show your house.

9. AVOIDING LAWYERS

Sure, you may not like lawyers. You should hire a lawyer anyway to avoid legal hassles down the road. Lawyers can: • Review brokerage agreements. • Discuss tax consequences of a sale. • Explore and explain issues not contained in a standard contract, such as what happens if a property contains hazardous waste. • Review title searches. • Explain closing costs and help determine if all are fair. • And a whole lot more.

10. TAKING ADVICE FROM FAMILY AND FRIENDS Y AND FRIENDS

Everyone who’s ever sold a house has stories to tell and advice to give. But not all markets are the same. And if your cousin sold his house years ago, in the middle of the housing bubble, and your uncle sold his condo years ago at the beginning of the housing bust, their experiences will be different from yours today. The best advice your family and friends can give you is the name of a real estate agent they liked and trusted. Or just call me. 10

HOW I CAN HELP: I will use my expertise to help you in these ways. • Conduct a market analysis that helps us price the property realistically. • Train my fresh and experienced eye on your property and help you present your home in its best light. • Post your listing on the MLS and many other online listing services, where most people begin their property search. • Create must-read material and go to must-attend open houses. • Do the paperwork. • Help you locate contractors, lawyers, and title companies. • And a whole lot more. That we should talk about.

* There is no such thing as a standard commission.

CHAPTER 3 Why Some FSBOs Sell and Others Don't

The key to this successful home-selling approach is a revolutionary finding discovered by Italian economist Vilfredo Pareto. The Pareto principle, or the 80/20 rule, is the key to this successful home-selling approach. In 1906, Pareto noticed that 20% of the pea pods in his garden held 80% of the seeds. Taking a closer look at this ratio, he found that 80% of land in his area was owned by 20% of the people. After detailed study, he observed that this ratio held true in many aspects of life. For example: 80% of your income is derived from 20% of your work; 80% of a business’s income is derived from 20% of its customers; 80% of your value to an employer is derived from 20% of your work. In a nutshell, approximately 20% of what you do matters. The other 80% is insignificant. Applying the 80/20 rule can save you time selling your home. Unfortunately, many real estate agents and sellers buy into the false idea that more is more. They completely ignore the Pareto principle. Stop trying to sell people on the entire home. Based on the rule, only 20% of your home’s features are important; the remaining 80% are trivial because they are the same features many other homes in your neighborhood have. Instead of focusing on those trivial features, focus on the unique features to grab the attention of buyers. These features make your home different from others. They’ll make it easier to sell 12

your home for the full asking price. Let’s look at a few real-life applications and examples of how the 80/20 rule can have an impact on selling your home. Remember that buyer in the market for a three-bedroom/two- bath house? Let’s assume the agent found that buyer five houses to preview. Each meets his general criteria and is located in the area where he hopes to live. The agent and her buyer drive out to look at the five houses. All five have similar features. The prices are comparable. In theory, you might think the buyer will have a hard time deciding between houses. But no matter how similar they may seem, no two houses are exactly alike. In real life, the 80/20 rule comes into play. Imagine four of the houses don’t have a pool, but one does. The buyer is not aware of this, though, because the agent didn’t mention it. The buyer sees the four houses that don’t have a pool. He isn’t particularly interested in any of them. Then, he sees the fifth house and the pool! Suddenly, he’s ready to make an offer. He might even pay full asking price, even though this house is more expensive than the others. The buyer’s offer isn’t based on the 80% of features this house shares with the rest. Instead, his bid is based on one unique attribute: a pool. The 80/20 rule predicted the sale of this house. Sadly, in this case, time was wasted finding the perfect house. Had the agent known to look for the 20% difference, this might have been her first stop. As a seller, you can leverage the rule to work in your favor. Draw attention to defining characteristics. Here is a real-life example. A real estate agent had a client visit from out of town. He did not have a list of criteria, just liked the area. The agent drove him

from house to house. In each case, this buyer suggested offers 10% to 20% below the asking price. He would not budge. She began to worry; the whole day was turning into a big waste of time. As the sun set, they stopped at one last house. It was not attractive and had little curb appeal. She was out of options. Nevertheless, this house broke the tough negotiator down. He was suddenly willing to offer the full asking price! What set this house apart from the others? It wasn’t because the buyer had a thing for ugly houses. Nope. The 80/20 rule kicked in again. Buyers pay more for unique features. This agent and her client had spent the whole day looking at houses that shared 80% of the same features. He did not care about any of those details. A bedroom was a bedroom as far as he was concerned. He fell in love with the one remarkable feature of this house. As he walked into the great room, there was a large window. The house sat atop a hill with a gorgeous view. And to top it off, the sun was setting below the distant tree line. That view sold the buyer. The other 80% could be improved. He did not buy the house because he liked the floor plan or the number of bedrooms and bathrooms. That view caused him to stop negotiating and offer full price on the spot. Such is the power of the 80/20 rule. Learn how to tap into this rule, and you will not have to settle for less than your asking price. Leverage a unique selling point. Buyers who fall in love do not haggle over pricing; they make good offers. In some cases, the 80/20 rule even helps people make a sale without conducting a showing. This is a huge time saver. The house in the following example had languished on the market for months. Unlike the previous house, this place was not ugly. On the contrary, it was a brand new custom-built home. But nobody seemed to care. It sat on the market more than seven

months without a single offer.

The builder was baffled. His fancy new house would not sell. He ended up firing his agent and hiring a new one. Fortunately, the new agent knew the importance of finding that special feature. He drove out to give the house a thorough investigation. What he found changed everything. The house had a gorgeous five-acre yard. Other houses being sold in the area were all on one- to two-acre lots. Not only was the yard bigger, it was more private than other lots available. The new real estate agent marketed the five acres. He mentioned details and a description of the house, but the house was not the main selling point. He shifted attention to the five-acre lot. In no time, his phone rang! A buyer was relocating and had noticed the house was for sale, but it hadn’t caught his eye. That changed suddenly when the buyer learned it was built on a five-acre lot. He submitted an offer from 1,000 miles away, never having seen the property in person. He was afraid someone else would buy it before he could, and he would lose out on the perfect house. That sale happened in 45 days. The builder was amazed! His house had been on the market close to eight months without so much as a nibble. Suddenly it was sold. Purchased sight unseen, all because of the 80/20 rule. For a short time, this “unsellable” house became the hottest house on the market. Don’t create an advertisement like the ads for every other house in the area. Turn a spotlight on something different about your home. You will attract interested buyers willing to pay full price.

SELLING TO INTERES O INTERESTED BUYERS

Find something unique about your home and build advertisements around that one item. It will catch people’s

attention. Buyers who are looking for that one item will ask to come see your home in person. As a result, you will stop wasting time showing to people who are not interested. Instead, you will be showing your home to buyers who are motivated to make a purchase. You won’t have to show quite so often. You also won’t have to sift through low-ball offers from apathetic buyers. Less stress for you. Take time to uncover your home’s most attractive and unique features. Compare notes with other houses in the neighborhood to see what makes yours stand out.

POTENTIAL UNI AL UNIQUE FEATURES

Each house has unique features. You may already have some in mind. If not, these ideas should get you get started: Hilltop views are an excellent defining feature. As with the earlier example, a high vantage point offers a spectacular view of the surrounding area. Maybe your home looks out on an open field frequented by wildlife. Many people would like that view. Perhaps your house has an unobstructed view of the sunset. That would interest potential buyers. Patios are another great feature. Maybe the rest of your neighbors have smaller patios or none at all. That vital feature could help you sell your home. Location can set your property apart from others. A buyer once paid extra for a townhouse simply because of its location in the complex. Most of the surrounding homes did not have any yard.

However, a few shared a large half-acre “yard area.” One of the

owners whose townhome backed up to this yard area sold his townhouse for a higher price. It set his property apart from others on the market. His home had a characteristic shared by fewer than 10% of the others. He had the only available listing offering that feature. With this easy point of difference, the house sold for a higher price. Another townhome seller in the same complex did not have a yard, but his property backed up to a lake and fountain. That extra feature helped him sell his townhouse quickly and for a great price. You might have a private location. For instance, your lot might be partially concealed by trees, or you might have an empty lot next to you. Use this to market your property. You might have a unique backyard. If you have a larger backyard than your neighbors, use that to your advantage. A shady backyard can also help you sell your property. Some people like the idea of lounging in the shade. A fenced-in backyard is also a big selling point. People with kids and pets flock to homes with fenced-in backyards. You can also look at other features. For instance, a finished basement can help you sell your home. You can market a l et a large attic, an extra-large garage, a swimming pool, or anything else that makes your home stand out. Look for the 20% difference and find a way to market it. That is how you will get results. You cannot just throw the information into your listing, though. You have to take the right approach.

CHAPTER 4 What Does a FSBO Really Cost? You probably think selling a house yourself will save you a ton of money; and you might be right. Certainly, you’ll save the listing agent’s fee. However, FSBO sellers pay for many things themselves—brochures, pictures, signs, advertising— that an agent would pick up as part of their commission. Also Being involved with the important Hud 1 closing statement. Hey, it’s all money in or out of your pocket. And it’s important to understand and chew on all the money a home sale will cost. Here’s a little worksheet that will help you keep track of the cost of your FSBO sale.

Marketing Costs = $__________________________ ts = $__________________________

Most agents don’t tell you how much money they spend selling your house. But they pay for photographers, listing fees, professional signs, contract development, and access to online listing services. When you sell a property yourself, you pay those fees, which can amount to many thousands of dollars. And don’t forget to factor in the value of your time. You’ll spend scores of hours finding photographers, designing signs and placing them around town, staging rooms, manning open houses, and showing clients the property. Figure out how much your time is worth per hour, then multiply that number by how many hours you’ll spend marketing your home. It all adds up.

Holding Costs = $___________________________ ts = $___________________________

Your home continues to cost you money while you wait for a buyer. You still have to pay the mortgage, utilities, property taxes, and utility fees. It’s not so bad—just budget business as usual. But if you, say, must move for a new job before your house sells, you can wind up supporting two properties for an indefinite time. Realtor.com statistics say that homes typically remain on the market for 86 days on average. After you sign a contract, it takes another 30–60 days (or more) to close. And just to fuel more nightmares, about 1/3 of all real estate transactions fall through, and you have to start the march all over again. Fun fact: On average, 18% of FSBOs were unable to sell within their anticipated timeframe, according to an Inman article.

Back Payments and Taxes = $__________________ s = $__________________

Every missed or late mortgage payment, property tax, mechanics lien, and homeowners’ association dues turn up at closing. Some of these debts come with interest or penalties. Before you close on your sale, you’ll have to pay everyone in full.

Loan Prepayment Penalties = $_________________ s = $_________________

Many lenders punish you if you pay back their loans early. It’s called a prepayment penalty, and your current loan may have one as part of the original mortgage agreement or as a rider. Search your paperwork to discover the terms of any prepayment penalty. FHA, VA, and USDA loans do not penalize you for early payment, but many non-government, conventional loans do.

Transaction Expenses = $_____________________ s = $_____________________

They’re called closing costs, and they can run from 2%–6% of the total amount of a home loan, depending on the state you live in. Closings are always a drag. Lenders are late with the mortgage check. You haven’t paid the last water bill. A buyer saw a little water where it shouldn't have been during the final walk- through. And a hundred other situations can arise that delay a closing or crash a sale. Would you know how to deal with all the problems that can arise? The good news is that your buyer probably is being represented by an agent who knows what to do in a crisis. The bad news: The solution will always benefit his client, not you. Bottom line: A recent study by Collateral Analytic found that FSBO homes tend to sell for 6% lower than homes sold by professional agents. Considering many agent commissions are between 5% - 6%, * you’ll typically go through all the work of marketing, showing, and closing on your home, and reap none of the savings you dreamt of. “It appears that many sellers are avoiding commissions while netting home prices less than they would with an agent- represented MLS sale,” the study says. “They are avoiding commissions at any price, even one that exceeds a commission rate.”

How I can help: I’ll save you time and money on:

• Writing a compelling narrative for your listing. • Working with photographers and stagers.

• Helping to negotiate a sales contract. • Handling problems during closing.

Still want to sell your house yourself? I know, it sounds a little scary. But if you still feel you’re up to the task, I want to help you succeed. In Part 2, I’m going to teach you everything you need to know to make your FSBO easier and more profitable.

I’ll tell you how to:

• Set the right price. • Stage your house to attract buyers. • Select the correct marketing tools. • Show your home to its best advantage. • Enhance your home’s curb appeal. • Negotiating price like pro. • Write a foolproof contract. • Handle inspections and appraisals. • Interpret a Hud-1. • Avoid freaking out at closing.

Of course, this advice is not meant as a substitute for the expertise of a licensed real estate agent—like me. But if you want to get a clear idea of the work that goes into selling a house, let’s dive in.

* There is no such thing as a standard commission.

CHAPTER 5 Make Sure the Price is Rig e the Price is Right When you buy a home, the three most important factors are location, location, location. When you sell a home, the three most important factors are price, price, price. Sure, I’ve spent a lot of pages explaining the ins and outs of FSBO real estate transactions. But, if I had to boil it down to the most important concept, it is: Set the right price out of the gate so your home sells quickly for the highest price possible. Many sellers think they’ve got an infinite window of opportunity to set the right price on their house. They often start high—they essentially pick their dream price, which may have little to do with reality—and figure they can always slowly reduce it until someone bites. That’s not how the real estate market works. Setting a price too high, aka “testing the market,” discourages buyers and offers. As you chip away at the price, your listing languishes on the market, becoming stale and even less attractive.

How can you divine the absolutely right price for your home?

First, forget the idea of “perfect price.” Pricing a home is part research, part experience, and part alchemy. Ultimately, you can only know you’ve set the right price on your house in hindsight. If it sold quickly and, hopefully, for more than asking, you priced it right.

That said, I do have some tips that will help you arrive at that magic number.

GRAB COMPARABLES

The best way to predict what price your property will fetch is to see what similar properties—comparables—sold for. Easier said than done. First, realize that every house is unique. Even though two houses can have the same square footage, number of bedrooms, and acreage, they are not the same. House A may have older trees and more shade then similar House B. House B may have drop- dead gorgeous granite counters in the kitchen, while House A has laminates. Your challenge is to find sales of properties that, as nearly as possible, compare to yours. Here are variables to consider. Location: Ideally, you want to find sales within a ½-mile radius of your property. But don’t go by distance alone. Also consider if your house is closer/farther away from a highway, or has a much better/worse view than a nearby comp. This will affect value. Age: Compare homes of the same vintage. If your 3,200-square- foot home is 5 years old, don’t compare it to a 3,200-square-foot home that is 50 years old. If you own a two-bedroom condo, don’t compare it to a two-bedroom single-family house. Recent sales: The more recent the sale, the more valuable the comparable will be in setting the price of your home. Sales in the last six months are OK; sales in the last three months are better. Soft features: This is where you must trust your gut in pricing your home. Some variables, like curb appeal, nearby shopping, community spirit, noise—are hard to quantify, but will affect

your home’s value.

When selecting comparable properties, avoid considering distressed properties—foreclosures, short sales, and ugly homes. These bargain properties often sell at a 5% to 10% discount and aren’t good indicators of your home’s worth.

THINK ABOUT MARKE T MARKET TRENDS T TRENDS

When you look at comparable prices, also glance at how many days a property stayed on the market before a sale. You want your home to sell quickly, not eventually. And “days on market” can indicate whether your local market is hot, or not. If nearby homes are disappearing overnight, then you’re in a seller’s market that could justify an optimistic price. If houses are taking months to sell, then you’re likely in a buyer’s market and setting a price slightly below your competition could give you a big advantage.

CONSIDER ONLINE LIS NLINE LISTING SERVICES

Online sites like Zillow and Realtor.com create algorithms that, basically, gather data from past, comparable sales and derive a “guesstimate” for your house. This is a ballpark number that merely crunches numbers. Zillow doesn’t know how your house will show, or that your bathroom tile is to die for—details that will affect the value of your home. That’s why online estimates should be one more factor to consider, not the last word on price.

HIRE AN APPRAISER

If you’re stumped on what your home is worth, throw some money at the problem and hire an appraiser. For around $500,

an appraiser will view your property, pull comparables, take pictures, and offer an opinion of what your home is worth. An appraiser can often see things in your home that can add or subtract value. Ultimately, an appraiser will weigh in on the value of your home. When a buyer emerges, his lender will send an appraiser to make sure the property is worth, at least, its mortgage. HOW I CAN HELP: With my professional experience, I’ll prepare:

• A detailed market analysis. • A study of area comps and pricing trend. • A fair market value for your home.

Call me at (781) 246-1234 cell

CHAPTER 6 Stage Coaching

When you’re trying to impress someone, you might put on your best suit or dress, wash your hair, swish around some mouthwash, and spray on some cologne—anything that makes you look and smell your best. That’s the purpose of home staging—it brings out the best in your property. Minimal staging entails decluttering, cleaning, and shining what you’ve got. Deluxe staging means transforming your lived-in house into a model home—at least for as long as it’s on the market. Top-notch staging can entail painting, recarpeting, and replacing shabby, dated furnishings with new, fashion-forward items. A Cinderella transformation can cost from a few hundred dollars to $4,500 per month. But professionals say staging your home is essential to getting the best price in the least amount of time. The National Association of Realtors®’ “Profile of Home Staging” provides some impressive statistics. • 29% of sellers’ agents representing staged homes reported an increase of 1% to 5% of the dollar value offered by buyers when compared to similar, unstaged homes. • 39% of sellers’ agents said that staging a home “greatly decreases” the time required to sell a home. • 49% of buyers’ agents said that staged homes had an effect

on the way most buyers viewed a home. • 38% of sellers’ agents said they stage all homes prior to listing them for sale. The rooms most commonly staged include the living room (83%), kitchen (76%), master bedroom (69%), and dining room (66%). Buyers’ agents cited the guest bedroom as the least important room to stage. Making repairs small and large go a long way toward attracting a buyer. Real estate professionals know that getting your home into shipshape condition achieves these goals. • A well-maintained house receives more and higher offers. • A house in good shape will fly through inspections. • Showing a house in good shape allows you to point out your home’s great features, rather than apologize for the mess. • Most buyers will grab onto any flaw as a bargaining chip to reduce the price. If all repairs are made prior to showings, a buyer won’t have imperfections to use as bargaining tools.

CONSIDER UPGRADES

This is one of the trickiest parts of preparing your house for sale. Remodeling and upgrading your home might bring you a better price and reduce the number of days your home sits on the market. Or not. Sometimes people spend a lot of money remodeling a kitchen or adding a bath and still have trouble selling their house; only now they’ve poured more money into their home and need to get a higher price to recoup remodeling costs.

Some remodels add more value to a home than others.

Remodeling Magazine conducts an annual Cost vs Value survey that lists common upgrades and the percentage of money a seller is likely to recoup at sale. The 2018 Cost vs Value survey of midrange upgrades and additions showed: • Bathroom remodel recouped 70.1%.

• Deck addition recouped 63.6%. • Kitchen remodel recouped 59%. • Master suite addition recouped 56.6%. • Entry door replacement (steel) recouped 91.3%.

If you decide to upgrade, do yourself a favor and hire a professional to do the work correctly and quickly. Preparing your home for sale is not the time to learn how to install drywall. Professionals will cost money, but they’ll do the job right the first time and reduce the stress that comes with remodeling and selling. Also, before undergoing a kitchen and bath remodel, do enough research to learn which looks are popular now—then find a way to match those new looks with your older home. This is where an interior designer is a godsend. A designer knows how to make upgrades look like a natural addition to your home, rather than an afterthought.

DON'T FORGET “SYSTEMS”

Replacing your water heater isn’t as sexy as adding a master bathroom, but you’d be amazed how important new systems are to buyers. No buyer wants to buy a house and have the central air conditioning or septic system malfunction. If your HVAC, plumbing, electrical, or waste systems are nearing the end of their expected lives, replace them. Then tout your brand-new HVAC

or instant water heater; those would be the 20% of the 80/20 rule.

EASY/INEXPENSIVE WAYS TO STAGE A HOME

If money were no object, you could hire a staging company that would transform the look of your home into a palace. You don’t have to spend a fortune to make your home look ready for opening night, but you might pay a psychological price. You’ll have to look at your beloved property objectively to spot the eyesores and problems a buyer will quickly notice. Then, you’ll have to store your treasures, which strangers might consider trash. Ouch! Take a deep breath and consider these common, staging improvements that agents such as myself recommend. Declutter: Clutter makes you want to flee your own home, so imagine its impact on a buyer. The problem is, everybody has his own clutter threshold. You might think a refrigerator covered with kids’ art adds a homey touch, while a buyer might think it makes your kitchen look messy. The trick is to look at your home through the eyes of a stranger. Sort, sell, or give away all the stuff that litters closets, tables, countertops, and bookcases. In the best of all worlds, you’ll have months to wrangle your clutter; but in a pinch, you can bag or box the stuff, store it in a storage unit, and go through it at your leisure. As a standard, go through your home and get rid of 50% of your belongings. Highly personalized items, photographs, out- of-season clothes, random junk, and excessive furniture need to go. To be clear, you do not have to throw the stuff out! Donate it. Sell it at a yard sale. Give it away. Someone can use what you don’t need.

Put precious items, such as family photos, into a safe or offsite storage. Once you declutter, you will be amazed how much roomier and nicer your home feels. The goal is to depersonalize the home so potential buyers can envision themselves living there. Deep clean: Hard-core cleaning: Now that the clutter is gone, move on to hard-core cleaning. The goal is to make your house shine. Be meticulous. Tidy each room from top to bottom. For a good deep cleaning, you should do the following: • Get rid of cobwebs first. This keeps you from getting dust bunnies all over freshly cleaned floors and furniture. • Dust ceiling fans and lighting fixtures while you clean the cobwebs. • Replace any burned out bulbs. • Dust your blinds. • Wash walls, unless you plan on painting. • Clean all glass surfaces: mirrors, television screens, patio doors, and windows. • Polish all wooden surfaces, including wooden floors. • Dust baseboards and window trim. • Polish door hardware—especially remove paint drips. • Wipe down any leather furniture. • Clean out and reorganize closets and cabinets. • Attack all appliances with cleaning fervor. Make them shine! • Sinks, toilets, tubs, showers, faucets, and countertops need to be impeccable. Every room is important, but the kitchen and bathrooms will take you over the top. They need to be eat-off-the-floor clean. • Vacuum rugs, shampoo carpets, and mop as if your life depends on it. A professional steam cleaning is a good 30

idea. Depersonalize: Remove anything that makes the home uniquely your own, so a buyer can imagine his life in your house. Remove family pictures, kids’ artwork from the fridge, sports memorabilia, and collections that you think are darling, but a buyer would consider clutter. Repair and repaint: You may not have the time or money to repaint every room, but you should devote a few hours too removing scuff marks from walls and baseboards, and fill and touch up wall cracks and dings. Fresh paint provides a clean canvas. If you have not painted your house in the last year, consider doing the entire inside of the home right now. If you have painted it, you might want to paint a second time. When planning to repaint, include everything. Paint the ceilings, the trim and window casings, and the doors. Do not forget the closets. And of course, paint the walls. Make sure you paint the right way. An artist creates a new painting on a plain, primed canvas. Through your efforts with painting, you are hand-delivering your potential buyers a clean, primed canvas where they can imagine their family in your home. Keeping all of this in mind, use neutral colors. That does not mean everything must be lifeless or stark white. That can have a negative effect as well. Rather, you want colors to be unobtrusive. Stick with gray, beige, off-white, and white. If you just painted the master bath turquoise and added cute polka-dot trim, change it! Remember, a blank canvas opens the imagination to endless possibilities. Polka dots do not. visit my website blog at StevenKesselRealtor.com and read "How to save money and paint like a pro".

Disguise hardwood floor scratches with fill pens (a Sharpie will do in a pinch). Adjust kitchen cabinets so they don’t sag. Scrub dingy tile grout.

MAJOR AREAS OF FOCUS

Kitchen and Bath: Focus on these high-impact areas. Buyers are most turned off by dirty, grungy bathrooms and kitchens. Nobody wants to eat in a place they feel is nasty. Likewise, no one wants to be naked in a disgusting place. Now that doesn’t mean you can create stunning bathrooms and kitchens, while leaving the rest of the home a mess, and still expect to sell your house for top dollar. Just be sure to address your bathroom and kitchen first. Keep this in mind: Potential buyers might forgive a less than stellar child’s room, but a questionable bathroom or kitchen could cost you a sale. So, let’s get started. You’ve done a deep clean of the whole house, and you most likely painted it as well, including the bathrooms and kitchen. Now it’s time to move on to another important issue: appliances. This can be a good idea or a money pit. Fortunately, you can follow a few guidelines, to make the big decisions. Should you buy new appliances? It depends on your situation. No doubt, new appliances make an impact with buyers. The National Association of Realtors® did a survey of buyers in the market over the past several years and found: • Buyers were somewhat or very interested in buying a home that featured new appliances. • Roughly 17% of the respondents preferred stainless steel. • The most important factor: appliances were available. • Buyers who were unable to get their sought-after

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