OriginColo

For Sale By Owner – 

Many people are interested in selling their home themselves, and I completely understand pursuing this option!  The bottom line with selling your home yourself is, well, the bottom line—it is about keeping more money in your pocket!  This is precisely one of the top reasons I became an active real estate broker—after all, I have bought and sold quite a few of my own properties as a real estate investor, so why not keep more of my own money!

Most folks do not have the time, or motivation, to endure the 168 hours of education required to sit for the state and federal tests in pursuit of becoming a licensed real estate broker.  Fortunately, if you are selling your own home you do not need to be licensed; however, you do need to employ many of the same principles used by licensed real estate brokers.

If you are starting out on the journey to sell your home yourself (without the use of a real estate broker), It is important to remember a few things:

1. A home is typically a person or family’s biggest investment—this means that a home purchase is a huge decision!
2. The real estate market is flooded with professional real estate brokers that earn their income by achieving the best possible results for their clients—you can learn from them!
3. A real estate transaction is fairly complex—if the process is handled by third-party, the law requires that the transaction is handled by either an attorney or a real estate broker (real estate brokers have been given the authority to practice law in limited areas)

A Home is a Huge Investment!

Since a home is typically one of the largest purchases that a person makes in their life, many people are scared or at least anxious of the process—I know, I’ve been there.  Fortunately I had someone urging me to purchase a home and that person also coached me through the process.  Looking back, I feel very fortunate that I had that advice.

When you are selling a home yourself, it is important to remember that potential buyers are making a huge decision!  If your potential buyers are first-time home buyers they likely need someone to help guide them through the process, much like financial advisors help us to achieve financial goals.  With this in mind, it can be tough to sell a home without the use of a real estate broker at least representing a potential buyer, but if you do connect with a buyer that is not represented by a broker, you may be able to help ease them through the process by recommending professionals that can help them with questions that they may have—it is best to eliminate any bias in the professionals you recommend, so suggest that they solicit advice from multiple sources on a particular subject.  For example: if the potential buyer wants a home inspection to reassure them that they are making a sound investment and will not have to worry about any major issues surprising them in the future, locate and evaluate at least three qualified home inspectors that you can recommend.  Remember that there are many facets of a home purchase, so it may be beneficial to also have the ability to recommend top-notch home lenders, insurance agents, trade professionals like roofers and plumbers, and maybe even financial advisers!

One of the most important details when making a huge investment is PRICE!  Potential buyers are going to want a good deal—after all, everyone wants to ensure that they are paying a fair price for everything they purchase especially a huge purchase like a home!  You need to have the ability to reassure potential buyers that they are purchasing your home for a fair price.  Take your time when pricing your home and do your home work!  It is important to present an objective opinion on the price and be able to support it with facts and data!

Learn From the Pros!

I would bet that most real estate brokers would tell you that the first home they sold for a client was not easy.  An experienced real estate broker has likely honed their skills over years, through market ups and downs, learned from more experienced brokers, and more!  Licensed real estate brokers are required to work for an experienced managing broker for a minimum of two years prior to being able to be an independent broker, similar to an apprenticeship that is found in trades like electrical and plumbing.  This means that for the first two years of a real estate broker’s career they are being mentored and monitored.  In addition, real estate brokers in Colorado are required to take 8 hours per year in continuing education to be able to maintain their real estate license.  All of this boils down to real estate brokers having a great understanding in all aspects selling a home, but you may be able to use this as your advantage to shortcut your education process.

Since real estate brokers are up to date on everything from prices and market trends to laws and the sales process, you can utilize them or even their websites to tap into this information.  This also reinforces one of my main principles as a real estate broker: know your competition!  You will want to use the information you gather from professional real estate brokers to price and market your product (your home).  Use all of the home pricing tools you can find to ensure that you are pricing your home competitively, and know your competition (the other homes for sale in your area)!  While doing your pricing research, pay attention to marketing techniques and write them down to use when you are ready to sell your home!

One more point on pricing tools: I suggest exploiting your local real estate brokers when it comes to evaluating the price of your home.  Take advantage of those pesky post cards that they send out promising a free or no-strings-attached pricing/market evaluation of your home; I suggest getting opinions from three separate brokers.  When you call them, use real estate broker lingo and say you want a CMA (comparative market analysis) on your home.  Most brokers will gladly provide this service for you because of the chance that they may have an opportunity to earn your business down the road.  They may contact you later in an effort to solicit your business, but you can always tell them the truth and hopefully get them to leave you alone: “thank you for the CMA, but I have decided to sell my home on my own”.  Maybe even say something to be nice like: “I will be sure to contact you if I later decide to enlist the help of a real estate broker”.  If you want to dig even deeper into the broker’s knowledge, ask them about the services and marketing techniques that they would employ if you decided to use their services.  There you go, short-cutting your education process to catch up with the pros!

The Complexity of a Real Estate Transaction

Congratulations, you have landed a serious buyer!  Now that you have successfully employed your pricing and marketing techniques, the next hurdle is navigating the contract process.  Colorado provides standard real estate contracts that can be used by anyone and are required to be used by licensed real estate brokers.If you plan to utilize a state issued standard form, I suggest familiarizing yourself early on.

In Colorado, the contract to buy and sell real estate, residential, is 17 pages long—be prepared for some fun reading!  As tough and onerous as the reading may be, the nice thing about this contract is that it basically explains the entire process.  There are many dates, deadlines, and other requirements that are important to keep track of (title work, inspection, insurance, appraisal, financing, etc.), so I strongly suggest that you familiarize yourself prior to having a buyer.  Get your highlighter out and spend some time with this contract!  If you decide that this looks too scary, you may want to look into retaining an attorney and/or finding a real estate broker to help you through the contract process (in fact, you will read suggestions about consulting an attorney in the Colorado contract).  Keep in mind that there will likely be fees associated with this service, but it will be minimized since you did all of the work to find the buyer.  Additionally, the potential buyer may be a bit overwhelmed by the contract, so having an attorney and/or real estate broker assist may ease the concerns of both you and your potential buyer.
Selling your home yourself can be difficult, but it is definitely possible!  If you are thinking about going down this path, just be sure to take your time upfront to do some research and shortcut your education by learning from the pros!

Feel free to contact Ray for more information by clicking this link or sending an email to Ray@Origincolo.com