Be Your Own BrokerSep 25, 2000 (Updated Sep 27, 2000) Write an essay on this topic.
I lead a charmed life. What can I say? At the same time that I got a great job in South San Francisco, I received a letter from a couple in San Diego that asked me whether I wanted to sell my house in Carmel Mountain Ranch. What a break! Here I was saying to myself, "Heck, I have already gone through the sales process three times", and another break... the buyer of my house is a mortgage broker.
Therefore, I decided to sale the house without a broker. I gave him a break and waived the 6% commission and in turn, he gave me the highest going sales price for my model in the area.
Steps in the Sales Process
Get Property Analysis and Marketing Proposal
Before I ever got an offer on my house, I contacted the real estate broker team that had sold two of my houses, my parent's house and my sister's house. This team is Gregg and Debbie Neumann of Prudential/California Realty. I have nothing but admiration for them and I feel at least compelled to thank them officially here because they spent a large expense to put together free of charge a detailed Marketing Analysis of my property. Through 1993-1998, they have been #1 agents in San Diego for number of houses sold and #3 agents in the United States for number of homes sold. They even went so far to recommend a real estate broker to help me buy a house up here in northern California.
The Property Analysis and Marketing Proposal includes the following:
* estimated seller's settlement statement
* property profile listing property characteristics, sales and loan information, and assessed and tax information
* real estate active listing of comparable homes
* real estate pending listing of comparable homes
* real estate sold listing of comparable homes
* real estate expired listing of comparable homes
* real estate full display of features of comparable homes that are pending or for sale (with color pictures)
* real estate display of features of comparable homes that have expired to reduce the possibility of overpricing your property
Do not forget to not sign any sales contract contract with the realtor though!
Buyer Prepares Formal Offer to Purchase
The buyer sent me via e-mail a formal offer to purchase which includes the buyer's and seller's names, property address, date, sales price and the deposit amount (earnest money) to be deposited into escrow to start the escrow process. I also asked him to add a special clause that the seller would provide a home warranty policy since I had to so quickly move and did not want the buyer to have a hardship if anything was broken that I did not know about. This I signed and faxed back to him.
Prepare Formal Estimated Seller's Settlement Statement
Since the buyer is a mortgage broker, he was able to conveniently calculate my estimated cash return. I saw immediately that although I reduced the sales price by 6%, that also reduced a number of itemized costs that were based on the sales price. Therefore, I made a net profit of $8,000 by going this way.
Get a Blank Sales Contract from any Real Estate Office
The seller prepared this form very fast, since he does that for a living. One thing that I did was that I set a ceiling on the "fix-up" costs that I would incur of $500. In past house sales, I would be frustrated because the buyer constantly throughout the escrow process would find something else that had to be fixed. My profit therefore kept getting eaten into. Since I was up the coast, it would have been near impossible for me to fix everything so I made it clear to the buyer that the sale would have to go "as-is".
Get a Good Escrow Company
In San Diego, Chicago Title Company is one of the largest and has a good reputation. Both of us felt comfortable with them because of previous good experiences.
Buyer Get Independent Property Inspection
This provides piece of mind for both seller and buyer. Buyer is usually responsible for this cost.
Get Trusted Person to Give Special Entry to Buyer in House
One thing that did not go as well as I would have liked is that the seller was not very organized. During the last two weeks of the escrow process, the buyer needed to get into the house on a daily basis, which required my dad to drive from El Cajon on a daily basis to supervise the entry into the house. It was a constant list of things that had to be done: 1) termite inspection, 2) carpet cleaned, 3) windows cleaned, 4) lawn aeriated, 5) roof inspection and repair, 6) property inspection, 7) termite fumigation and repairs, etc.
In my case, things fell into place which made it clear to me that doing the sale independent of a real estate broker was the way to go. This experience with selling my house saved me $8,000. It also helped that I was selling my house in a seller's market and that I was selling a house in a very desirable location where people often left notes on my door to buy my house. What can I say? It pays to have great landscaping. :-)
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