10 Common Mistakes Made By St. Louis For Sale By Owners

If you are considering selling your property or in your own, you need to be aware of the pitfalls that may lay ahead of you. Homeowner's that decide to take on the task of selling their home themselves typically find out there is a lot more to it than just finding someone that likes their home and wants to buy it. Some homeowners successfully complete the sale of their home, but the reality is the majority do not. Many of these are tripped up by what we call "home sale landmines". Hopefully this list of the 10 most commons mistakes made by "FSBO'S" in St. Louis will either help you avoid the pitfalls or realize that you may want to consider using a REALTOR® instead.

Mistake #1 - Everyone wants the commission

Typically one of the motivating factors for a homeowner to decide to attempt to sell their home on their own is a desire to save the "commission"; the cost of selling their home using the services of a real estate agent. The problem is the main thing that makes "FSBO's" attractive to homebuyers is the idea they are going to save money by cutting out the cost of the real estate agent. See the problem here? Both the seller and the buyer want the benefit of the commission savings. The ball is in the Seller's court here, so to speak, as they start out by pricing their home...unfortunately they usually price it too high as a result of wanting the benefit of the commission savings as well as the fact that most of us love our homes and tend to think they are worth more than they really are.

Avoid this by pricing your home right from the start. Try to take the emotion out of it; do your homework and see what comparable homes are selling for in your area. You may wish to obtain an appraisal to get an objective opinion of the value. Then, when pricing your home don't be greedy...use some of the commission savings to price your home competively and make it seem attractive to buyers.

Mistake #2 - Beauty is in the eye of the beholder

Many homeowners not only don't see the flaws that others may see in their homes, but many times can "justify-away" deficiencies or negative aspects of their homes. This is understandable as, to many of us, our houses are much more than just a house, they are a home. We have many wonderful memories of family and friends in the home, and may have a hard time taking an objective look at our home's condition to determine what needs to be done to prepare their home for sale. This is another area where an objective opinion would be a big help. Get someone that is not emotionally attached to your home (and has the guts to tell you to your face what they really think) to walk through your home in the shoes of a prospective buyer and tell you what repairs or improvements you need to make prior to placing your home on the market for sale.

Mistake #3 - Don't keep it a secret!

Many FSBO's buy a generic "for-sale" sign, put it in their yard, and wait for the buyers to call. Unfortunately, there is much more involved in getting your home sold than this. While a for-sale sign is one of the better ways of exposing your home to potential buyers, it only exposes your home to your neighbors and those potential buyers that may be driving the area. It is imperative, especially in today's market, that you make sure that your home is advertised where's today's buyers are looking; that means you need to have great web-presence; have your home advertised on all the major online real estate sites; have a website for your home showcasing all the information, photos, etc that a home buyer may be looking for as well as promote your home through social media such as Facebook.

Mistake #4 - Forgetting the customer is always right.

How frustrating is it when, in spite of the fact your for-sale sign says "by appointment only", that, just as you are sitting down to dinner, the door bell rings and you answer to find a prospective buyer wanting to see your home? While most prospective buyers would not normally consider knocking on the door of a home with a real estate company for-sale sign in the yard, the for-sale by owner sign seems to be an invitation to do so. Many sellers find this uncomfortable and inconvenient and may be quick to "shoo" the potential buyer away or tell them to call later. Unfortunately this will most likely result in never seeing the buyer again. As unfair as it may seem to you the seller, buyers today want everything "now" and on their terms...quite frankly there are plenty of homes available for sale so it probably won't be hard for them to find an accomodating seller. Try to make your home available to be seen by buyers on short notice, and even at times when it is not convenient.

Mistake #5 - Go 'way

If you list your home with a good real estate agent, the agent will advise you that, during showings, you need to not be at home. This is done to make prospective buyers feel comfortable and give them the freedom to look around at your house without feeling like they are being intrusive. When you are selling your home on your home, it's a little more difficult to do this as there is not an agent involved that is with them in your home, but to the extent you can "be gone" you should. Meet the customer at your front door, give them a short (emphasis "short") run-down on the features of your home, then walk outside and leave them to look at your home privately.

Mistake #6 - Don't take it personal, no one said your kid was ugly.

When it comes time to negotiate with an interested purchaser many sellers blow it when doing it on their own. The seller and the buyer are looking at the same "deal" quite differently. The seller sees their home as the palace they are offering at a great price in great condition and the buyer sees it as a house that is not decorated the way they like, needs some improvement and is over-priced. This is why no seller ever lists their home at the price that is the absolute minimum they will accept and why a buyer rarely offers the full price, particularly in challenging markets.

This is why negotiating is a big part of any real estate transaction. This is another area where, if it can be handled by an objective third-party it goes much smoother but FSBO's are usually forced to deal directly with the buyer, or worse-yet, the buyers agent directly (this is worse because they are represented by a professional and the seller is not which puts them at a disadvantage). Sellers tend to take the buyer's offer's, and their justification for an offer at less than asking price, personal and often let emotions blow up the negotiations.

Seller's must remember while this may be their "home" when it comes to selling they have to look at it as a "house" they are selling and take the emotion out of it. If a prospective buyer hurts your feelings by not appreciating all the "improvements" you made to the house just suck it up and don't take it personal.

Mistake #7- A hand-shake won't cut it.

There was a time when a simple handshake sealed a deal, and today there are many transactions still done in that manner, but when it comes to real estate that is not the way to go. For a variety of reasons, all aspects of the sale of a house should be handled in writing and this includes the negotiations. Too frequently FSBO sellers will negotiate the sale of their homes verbally and think they have reached "an agreement" only to find the deal blows up when it is reduced to writing because of terms or conditions in the contract that either are new, or were not discussed during negotiaitons. Not to mention if you want a legally-binding contract that you sue the buyer to enforce it must be in writing according to the Statute of Frauds.

Sellers will find a variety of sources for pre-printed sale contracts online that they can consider using or they can contact an attorney to prepare the documents. If the buyer is represented by a REALTOR® that will allow the use of the St. Louis Association of REALTORS® standard contract form which is a great document, is comprehensive, fair to both parties and has been approved by the St. Louis Association of REALTORS® as well a the Bar Association of Metropolitan St. Louis.

Mistake #8 - Got Lead? Got $11,000 to spare?

Sellers are rarely aware of the existence of an EPA rule which requires ALL sellers of homes built before 1978 to disclose the existence of lead-based paint in existence in the structure as well as other requirements. Or, if seller's are aware of the law they don't think it applies to them when they are selling their own home but that is not correct. Failure to comply with this rule can be costly also with civil penalties of up to $11,0000 plus three times the actual damages a person suffered as a result of the violation.

The requirments include (for homes built prior to 1978):

For more information see the EPA Fact Sheet.

Mistake #9 - But they SAID they were pre-approved for financing

It's exciting when, trying to sell your home, someone comes forward and says they want to buy it. It's even more exciting when you have been able successfully negotiate the terms of the deal and reach an agreement with the buyer. What next? Well, unless the buyer is paying cash (which is highly unlikely) the buyer is going to need a loan to compelte the purchase of your home.

Seller's can waste weeks, sometimes even months, waiting for an un-qualified, or maybe un-prepared, buyer to get their financing. Many times, particularly when a buyer is working with an agent, the buyer will visit a lender first and get "pre-approved" for their fianancing. While this is an excellent practice and Seller's should not enter into a contract to sell their home without some assurance the buyer is qualified and can get financing, many "pre-approvals" literally are not worth the paper they are written on. Read the letter and see what the conditions the approval is subject to and then you will have a much better idea of how thoroughly the lender evaluated the buyer. For example, it's not uncommon to see that the letter is subject to "verification of income and debts, buyer's credit meeting normal underwriting guidelines, verification of employment, etc.". What this tells you is the buyer has a long way to go before actually being approved for a loan.

Before entering into a contract discuss the financing with the buyer, see what they have done to assure financing will be available to them and if there is any doubt ask them for something in writing from their lender that they qualify for the loan they are trying to obtain, or, as part of the contract, require they apply for a loan with a reputable lender within a few days of signing the contract and then allow an amount of time to provide proof they qualify.

Mistake #10 - Your house is NOT "A Great Home for a Family"

Why not? Because the Federal Fair Housing Laws say so! Granted, homeowners are not typically real estate professionals and therefore may not be aware of the laws that affect the sale of a home, but if a Seller is going to act like a real estate agent by selling their own home, then they need to educate themselves on laws that affect how they sell their home. This includes Federal Fair Housing laws. It is actually faily easy to violate the law pretty innocently but when it comes to Fair Housing Laws "good intentions" or "ignorance of the law" doesn't get you very far. The most common violation of Fair Housing Laws by FSBO's is probably in their ads. Seller's may not give a thought to such statements in ads as "great family home", "In St. Thomas Parish", "nice yard for kids", etc. but these would all be violations of the fair housing laws. To learn more about Fair Housing laws go to the following resources:

We can get you through it!
We know selling your home sounds like a daunting task, particularly in this market, but if you will allow us, our professionals at MORE, REALTORS can show you just how easy we can make it for you from start to finish! We know the St. Louis market, we know the real estate business and have some of the most knowledgeable and experienced brokers and agents in St. Louis in our firm.
MORE REALTORS
Phone (314) 414-6000
Email: Info@MO-RE.com
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