Let For Sale By Owner's sell in peace -

Yesterday, I listened to a customer tell one of our wonderful customer service representatives that he was tired of having Realtors call him 5 times each day trying to scare him, telling him he will fail, asking to list the house, etc. Simply put, this is childish activity and down right unethical. I understand agents need to make money but they should not "scare" people into doing something - it is not good business and it is morally wrong.

For Sale By Owner customers have the right to sell their homes without an agent AND without being bombarded with scare tactics. This would be like eBay.com telling someone they can not sell their furniture at their Church Bazaar (or garage sale). Or, a travel agent calling a customer and telling them they will not pick the right hotel at the right price at Walt Disney World when they book on-line, without an agency. Or stock brokers telling good, hard working citizens they can never buy and trade their own stocks on-line, that it is too dangerous!

Life has risks. I understand this, as do our important and respected customers on ForSaleByOwner.com. Risks bring reward. These hardworking citizens are empowering themselves to be successful and improve their financial security. So please let every For Sale By Owner seller - regardless of where they are advertised - sell their home in peace. Thank you.

Driven By First-Timers, Home Sales Show Dramatic Increase

New data from the National Association of Realtors found that in the month of September, which is the latest data available, existing home sales increased 9.2% from September 2008. While this is great news for the housing market as this is the highest increase we've seen in two years, the increase is likely due to the fact that the $8,000 tax credit for first-time home buyers is expiring November 30 and these buyers are racing to close on their home sale. In fact, early estimates are that first-timers have comprised 45% of all home sales thus far this year.

Unless the tax credit is extended, we suspect that October and November figures will also show increases and that we'll see a noticeable drop in December.

Home sellers, especially with homes geared for first-timers, should keep close attention to housing news regarding the tax credit. We'll keep you informed here as well, but we've found that the most successful "by owner" home sellers are aware of the latest news affecting the housing and mortgage industries. Not only because buyers are more confident working with such knowledgeable sellers, but because sellers who are aware of the latest trends are more likely to market and accurately price their home to attract qualified buyers.

Mortgage Rates Dip Below 5 Percent

Freddie Mac has just reported that the average 30 year fixed mortgage rate was 4.87% for the week ending Thursday, October 8. It's the lowest that mortgage rates have been since the spring. For a $250,000 mortgage, the monthly payment at a 4.87% rate is $1,322. The 30 year fixed rate was 5.94% last year at this time, or a monthly mortgage payment of $1,489 on a $250,000 mortgage.

Buyers and those who want to refinance are not the only people interested in low rates. Sellers need to keep track of mortgage rates because rate changes will make their home more or less affordable. Real estate agents typically contact home buyers who are sitting on the fence to alert them to low interest rates, and "by owner" sellers should do the same. The smart "by owner" seller should take some time this weekend to call or email people who have showed interested in their house and let them know about these low rates. Buyers will appreciate that you are helping them save money in today's economy.

Click here to get started on getting approved for a mortgage.

Selling For Sale By Owner - Yes you can!

You - anyone - can sell their home "by owner". I had a conversation with someone this week and they said "I thought you had to use an agent" to sell your home.

FACT: Every consumer has the right to buy and sell property without using a real estate agent.

Sadly, many consumers are mislead to believe there is some special law or policy which states they have to use an agent during the buying and selling process. Ten (10) years ago, information was controlled by agents which lead people to believe they had to work with them. Today, the internet and easy access to every key piece of information to help you - the consumer - buy and sell property is at your finger tips.

About 4 years ago, an independent study (Real Trends) found out about only 50% of consumers were aware of the For Sale By Owner method of selling their home. I hope during the past 4 years this has improved and made more people are aware you have the right and greater opportunity to sell via the For Sale By Owner method.

Every consumer has the right - and more tools today - to sell and buy your home and to save a lot of money. Empower yourself. Empower your friends and neighbors. Make sure they know they have a powerful choice to make which can provide them financial independence by selling For Sale By Owner.

$8,000... Time is Running Out!

As any first-time home buyer probably knows, one of the best deals in today's market is the $8,000 tax credit that the government is offering to people purchasing their first home. According to figures from the IRS, it has been very successful as more than 1.4 million people have used the tax credit thus far.

The home buyer has to meet certain guidelines in order to qualify for the tax credit (click here for specifics), but most importantly the real estate transaction has to close by November 30, 2009. That date is quickly approaching, and prospective first time home buyers should not let this opportunity pass, especially since there have not been any strong signs that the federal government will be extending the deadline.

Choosing a good real estate attorney, as well as getting pre-approved for a mortgage, will help ensure that you will be able to close on your dream home in time.

Existing Home Sales - August, 2009

Yesterday the National Association of Realtors reported "existing home sales" dropped 2.7% from July. This is no surprise and should not be a shock. For the next 15-18 months, we will see months of increases along with months of decreases. Meaning, the industry as a whole will not see 12 straight months of non-stop increases. The weak economy, unsteady housing market, weak job prospects, and foreclosure volumes will combine to make the housing market uncertain and a bit unpredictable.

That said, I believe consumers have the opportunity and power to sell their properties if they know and understand their market. Today, more than ever, consumers who sell their home via the For Sale By Owner process have more access to resources, knowledge and information to correctly price their home. In this market, the consumer should monitor home inventory on a weekly basis and follow these basic steps:

• What new homes (similar to your home) decided to sell this week?
• What are the prices of homes similar to mind?
• Visit your competition - see what "selling" features they have.
• Understand how many foreclosures are listed in your neighborhood (this will likely lower final sales prices but check the price of these properties too.
  
• Finally, find out what homes similar to yours, sold for in the past month or two.
• Note: Every consumer has access to this information via the internet - it is freedom of information and quite empowering.
  

In this market, selling For Sale By Owner gives you and extra 6% of pricing power against your competition. Example: If you competition is listed at $300k, price your home at $295k. Your competitor who is using an agents will only take home $282k ($300 - $18k in commissions) so you come out way ahead.

Build confidence & empower yourself -

FSBOs Finding Success in Selling Own Homes

As previously discussed, the real estate brokerage industry has highlighted the benefits of selling "by owner." The average ForSaleByOwner.com seller saves $12,750 in commission and utilizes our online marketing tools to attract buyers and get their home sold. Here's what some of our recent sellers have told us about their experience with ForSaleByOwner.com.

"Awesome service ... in today's economy and market, people are on the lookout for the best deal for the money. ForSaleByOwner.com is just that deal! Thanks for helping me sell my home!" - Jarett in Cabot, Arkansas

"Nothing negative to say. Placed the ad on forsalebyowner.com on Sunday and received an offer on Monday. Can't complain about that!" - Bryan in Cary, North Carolina

"We got several calls from interested buyers. More than we did when our home was on the market with (a Realtor) for 5 months. We have been speaking nothing but good things about your service and will continue to talk you up. We will be doing this again. I guarantee it! " - Tania in Converse, Texas

"Extremely pleased with service. Saved over $10,000 in Realtor fees! Would highly recommend!" - Patrick in North Olmsted, Ohio

"We were very satisfied with the service. It just shows that selling a home on your own is much easier than the use of an agent of which most had no clue on how to price in this market." - Edward in Jersey City, NJ

"Great service, great product, very effective. I had a purchase and sale agreement within two weeks. Thanks." - Ethan in Veradale, West Virginia

Tips on How to Price a Home

A home's asking price is one of the first pieces of information that buyers will want to know about any home on the market. If sellers price it too high they risk scaring potential buyers away. If it's too low the sellers risks risk losing money. In order to price a home accurately, a "by owner" seller has to become educated about the local real estate market. Doing so will allow the seller to set an asking price that will compete favorably against other comparable homes.

But don't worry, it's easy to do if you just follow these simple steps:

1. Know the Competition: Visit real estate websites and drive through your local area to search for homes for sale that are similar to yours in size, number of bedrooms & bathrooms, lot size and square footage. Educate yourself about their asking prices and, especially for condos, calculate the price per square foot. Trulia.com will do most of this work for you and allows you to print out a list of comparable homes, but you'll also want to visit Realtor.com and ForSaleByOwner.com to get a more complete list of available homes on the market.

2. Visit Open Houses: Now that you know what's on the market, visit as many open houses as you can in order to find out how your home compares to others. Your goal is to learn as much about those homes as possible, such as upgrades and renovations to the kitchen, bathrooms and bedrooms.

3. Learn About Recently Sold Properties: Your next step in educating yourself about the local market is learning how much homes have sold for in the recent past. Home sale information is public information and can be found a number of ways. Your county clerk's office and/or local town hall can provide you with this data, but the Internet has made the task even easier. Trulia.com and Zillow.com each have a "Recently Sold" feature that will list all information about properties that have sold near any given address.

4. Get a Starting Point: For a simple, cost-effective way to get a ballpark range of how much your home is worth, consider getting an Automated Valuation Model (AVM). Similar to a real estate agent’s Comparative Market Analysis, an AVM will compare your home to similar nearby recently sold properties. The AVM won’t know if your home has an upgraded kitchen, finished basement or new roof, etc., but it will give you a suggested range to price your home. The AVM will also provide you with a list of nearby recently sold properties. ForSaleByOwner.com offers an AVM tool that is available here.

5. Evaluate Your Research: Now that you have information about homes currently on the market, data on recently sold properties and a price range, you have all the data you need to compare your home to others in your neighborhood and local area. Evaluate the information you have learned and ask yourself how your home stacks up with the others. Be honest. What condition is it in and how does in compare in location, features and aspects like a remodeled master bathroom?

6. Live in the Now: One of the biggest mistakes sellers are doing in today's market is pricing their home at price points of one, two or three years ago. The national median home price has dropped more than 15% in the past 12 months (in markets in CA, FL and AZ the median home price has fallen by more than 20 percent!), and those that price their home too long will just see it sit on the market. The homes that are selling today are those that are priced competitively to other homes are on the market, providing buyers with the sense that they are getting "a good deal."

7. Take Advantage of Being "For Sale By Owner": Owners of homes being sold through a real estate agent will have to fork over expensive commission fees equal to 5-6% of their home's sale price (or $18,000 for a $300,000 home). Or, in other words, the seller of that $300,000 home will only "pocket" $282,000. As a smart "for sale by owner" home seller, you won't have that expense and -- depending on how quickly you want to sell -- you have the unique ability to price your home anywhere in that $282,000-$300,000 range and still come out ahead financially compared to sellers of similar homes. You'll also be able to get more buyers as well because they'll be attracted to your home's asking price.

8. Set the Price: The time has come. You now have a complete picture of your real estate marketplace. Set the price using all the information you've learned through the above steps.

Congratulations! You have reached a major milestone in your home selling process. Not only have you arrived at an asking price, you have become an expert in your local real estate market. Prospective buyers will be impressed with your sense of knowledge and honest assessment of your home's value, and you'll be able to communicate about its strengths and weaknesses as compared to other homes in your neighborhood, town and area.

Tips on Buying a FSBO Home

With “by owner” real listings accounting for approximately 20% of all homes on the market, ForSaleByOwner.com offers the following tips on how to buy a “by owner” home without using a real estate agent:

1. Determine Your Budget: The first step in any home buying process is determining how much you can afford. It’s important to not overextend yourself. There are many Internet-based mortgage calculators that will tell you how much you can afford based upon your income, debt level, mortgage rate and available cash for a down payment.

2. Get Pre-Approved: Now that you know the price range that you can afford, you’ll want to get pre-approved so that you can move forward in the home buying process. In today's market, buyers with a large down payment and a strong credit rating are more likely to obtain a mortgage. Getting a pre-approval letter is a quick process that will tell sellers that you are a serious buyer who can afford their home.

3. Search For Homes: This part is simple. Nearly 90% of all buyers use the Internet to search for a home, so ForSaleByOwner.com can help find your ideal home. Keep in mind that nearly 25% of all properties on the market are “by owner” listings, so remember these properties as you search for your next home.

4. Contact the Owner Directly: Unlike homes represented by an agent, there’s no middleman to interfere with you from getting directly in touch with the seller. Phone or email the seller and ask additional questions about the home that wasn’t on the online property description. If you’re still interested, agree on a mutually convenient time to tour the home.

5. Get a Valuation Report of the Home: Either before or after you see the home, get a valuation or property report to see how the home’s asking price compares to other recently sold homes within the neighborhood. It’s similar to a real estate agent’s CMA (comparative market analysis), and it will compare the home you’re considering with recent nearby home sales. Remember that such property reports and CMAs do not factor in any recent renovations -- such as kitchen or bathroom remodeling -- so the price of the home will be affected accordingly.

6. Hire an Attorney: For a few hundred dollars, a quality real estate attorney will provide you with all the advice and counsel you’ll need to go from the offer to closing. Use a local attorney who is knowledgeable about your town’s ordinances when it comes to real estate transactions, as well as your state’s disclosure laws.

7. Make an Offer: Now that you’ve seen the home firsthand and have a property valuation report, plus an attorney in your corner, you’re ready to present the seller with an offer. Your attorney should have the necessary offer forms or you can use ForSaleByOwner.com to get all of the state-specific paperwork that you’ll need.

8. Lock in Your Mortgage Rate: Assuming that the seller is entertaining your offer, you’ll want to shop around for the lowest mortgage rate. You should contact major lenders, visit local banks and contact mortgage brokers to price compare. Once you’ve settled on a lender and a mortgage product, they will lock you in that mortgage rate and give you a set amount of time to close the real estate transaction. A 30 day or 60 day “lock in” period is most common.

9. Get the Home Inspected: The next step is hiring a quality home inspector who will go through the home – from foundation to attic – to see what condition the home is in. A home inspector will cost $300-$600 and the inspection will take around 2 hours. You’ll get an inspection report outlining any mechanical or structural problems that the home might have.

Depending on the results on the inspection report, you might want to re-negotiate the purchase price. For example, the inspector might tell you that the furnace to be replaced. Negotiate with the seller to lower the price to compensate for any such expense.

10. Close the Deal: Your real estate attorney will handle most of the details at closing and, depending on your state and local area, will advise you on any special paperwork that needs to be completed between you and the seller. Your attorney and your mortgage lender will also assist you with coordinating the financing and providing payment to the seller. The seller will sign over the deed of the home and, voila, you’re the new homeowner!

Qualifying Buyers for a Mortgage

One of the biggest headaches any home seller can experience is working with an interested buyer and negotiating a sales price, only to find days or weeks later that the buyer is unable to obtain a mortgage. That's precious time wasted and perhaps you even turned down offers from other interested parties.

According to the Mortgage Bankers Association, roughly half of all mortgage applications are being rejected. Lenders aren’t giving mortgages to just anyone nowadays. They’re turning down applicants who don’t have a high enough credit score or are not making a sufficient down payment.

As a seller, you’ll want to focus your attention on those who can afford your home and can get the necessary mortgage necessary. Ask interested buyers if they have a pre-approval letter from a mortgage lender. They might say that they are “pre-qualified,” which isn’t as strong as being pre-approved because the lender has not verified the buyer’s credit score, income, assets or liabilities. (click here for more about pre-qualified vs. pre-approved).

If the buyer is pre-approved, great! If not, before you spend any significant amount of time negotiating a sales price, ask that they take the important step of getting pre-approved. Not only will you be putting yourself in a situation to only work with those who are more likely to get a mortgage, you will be providing sound advice to buyers who will gain more confidence in buying a “for sale by owner” home without the help of a real estate agent.

Tell them to visit local banks that handle mortgages or contact any of the large home lenders, such as Wells Fargo or Bank of America, to get a pre-approval letter. Online lender Quicken Loans can even help buyers get fully approved for up to four months while they shop for a home.

Having your buyer get pre-approved is actually a very simple process and will benefit both you and the buyer.

Searching Tips and Tricks

We are always looking on ways to improve search. We get many suggestions regarding different terms and ways people would like to search through the listings. You requested and we listened. Here is a helpful list of ways to search through our listings that you might not have known about.

1. Searching by State/Province
You can easily search by State or Province on our site. Just type the State/Province in the location field and hit search. Note that some areas (i.e. New York City) have the same name for the city and state. If you type in just "New York" you will be shown the results for New York City. If you want to search the state, simply type "New York State" in the location field.



2. Open Houses
If you are planning to visit an area and want to see if there will be open houses in there, use the "Sort by Open House" functionality. This will place all of the properties that have an open house at the top of the results.



3. New Listings
Similar to the open house capabilities mentioned above, you can also sort by "New". This will place all new listings at the top of the search results.

Hopefully these tips and tricks will make finding your next home easy using ForSaleByOwner.com. If you have any comments or suggestions please let us know as we continuously strive to improve our search.

Home Prices Drop 18.6%

Home prices declined in each of the 20 metropolitan areas tracked by the S&P/Case-Shiller home-price index.

The monthly index found that, from February 2008 to February 2009, prices dropped 18.6% across the 20 markets, with the biggest declines occurring in Phoenix (-35.2%), Las Vegas (-31.7%), San Francisco (-31%) and Miami (-29.5%). Markets with the smallest declines were Dallas (-4.5%), Denver (-5.7%) and Cleveland (-8.5%).

Visit this page for a complete table of the 20 cities tracked by S&P/Case-Shiller.