Home Sale by Owner

YOU CAN DO IT!

Steps in Selling Your Home

1. Preparing your house for sale. Cosmetic changes and a thorough cleaning can go far in creating a favorable first impression to buyers. Prepare the outside of your home to attract passerbys. Consider what would attract you if you first saw your home and what would put you off? Fix the minor problems such as leaking faucets. Consider fixing the major problems on your time table and terms to avoid these problems being pointed out during a home inspection and being the subject of a repair amendment.

2. Setting the price. Finding the right price is difficult for owners. But the following can help:
-Find recent sales in your immediate area of similar homes. With an address you can learn the sales price from the county offices.
-Compare advertised homes in similar areas to your home.
-Order an appraisal from a certified appraiser. Let them know this is for purposes of a sale by owner. A certified appraiser can be found in the phone book.
-Check the county assessor’s office for the fair market value of your home for tax purposes. While harder to find, the assessor may be able to help with recent sales values of nearby similar homes or the assessed value of nearby and similar homes especially if you have street addresses and depending on what search abilities the assessor’s computers have.
-There are also website that offer help on the valuation of a home. One website is www.domania.com which has a $30 charge.

When you do decide on a price leave yourself some room to negotiate.

3. Finding the buyer. Get an attractive for sale sign with your phone in large enough print to be seen from the street. Post notices on boards at work and neighborhood spots. Tell your friends, neighbors and relatives. Advertise. Have your own open house. Make a fact sheet on the house to hand out. Use the internet. Type in HOME SALE BY OWNER or similiar search words and you will be directed to web pages of interest that advertise home sales by owners.

4. Contracting with the serious buyer. Make sure an interested buyer is serious and capable of financing the purchase. Many buyers have a pre-approval letter from a lender to show they are serious buyers. A binding real estate contract with earnest money spells out all aspects of the sale. The owner must also comply with Illinois law on the Real Property Disclosure Act, the Radon Disclosure Act and Federal law on Lead paint disclosure.

I consider the contract and disclosure forms to be primarily for the protection of the seller while the inspection paragraphs and warranty paragraph are for the protection of the buyer. The seller must also be willing to let the attorney do a good job. I have had sellers that really don't want me to do anything but type out a standard contract. A good contract for the seller can head off potential problems with the sale. The seller does not want to find they have some liability after the sale if the buyer finds some major problem that was not adequately disclosed or contracted against.

5. The buyers turn. Once you have the contract, the buyer will begin the financing or loan process unless you are lucky enough to find the rare buyer who pays cash. The buyer takes the contract to a lender who begins the credit process.

6. Steps in the sales process. The following steps are taken to head towards closing.

-An appraisal inspection is arranged by the lender. If the loan is an FHA or VA loan there may be repairs to be done at the owners expense with a follow up inspection. Some buyer assistance programs also obligate the seller to make repairs. My contracts specifically give the seller the right to refuse to make expensive repairs such as a new roof and to instead cancel the contract if needed.
-A termite inspection is ordered and treatment made if necessary
-Title insurance is ordered. Title insurance guarantees the buyer that they are receiving good title and the lender that their mortgage is protected from title defects. The title insurance may reveal steps that need to be taken to clear title.
-There may be other inspections required by the contract such as whole house, radon, mold, well and septic, if applicable.
-There may be amendments or extensions needed to the original contract
-An attorney will prepare the transfer of title papers which includes the deed, state and county revenue form. Certain cities have requirements that have to be met. For example the City of Peoria has their own transfer charge for sale and requires a zoning inspection for other than single family homes.
-The owner requests a written payoff from any lender that has a mortgage on the house.

7. The closing. This is where it all comes together. Owner and buyer gather around a table with the closer who will present and obtain signatures on the transfer papers and new mortgage papers and record at the Recorder of Deeds. A HUD statement sets forth all the figures and costs of the sale. This will show you your net profit from the sale. This is when you get your check.


CONGRATULATIONS ON THE SALE!