Selling your home in a market flooded with available homes is possible, but without the experience of a professional will prove to be difficult. For Sale By Owners, here, we will discuss a few tips that will make it easier to hook a potential prospect. In a time when fewer buyers are available compared to the number of available options, any qualified buyer that you attract could be the one you will take to closing. It is important to know how to tell a serious buyer from a tire kicker.

For Sale By Owners Tip: Know Your Buyer

It is very important to know who you are targeting your home to, and how to recognize them early on. If they aren’t working with an agent, it becomes your job to make sure they understand that you need to see some proof they are RWA status, and confirmed. Someone who is RWA confirmed is a great candidate. Not every prospect will be RWA confirmed. Asking too early in a conversation can filter out tire kickers, but can also offend a serious buyer. So, timing is important. This is usually done with finesse when working with new buyers.

What is RWA Status?

Ready, Willing, and Able (RWA) status is when a buyer submits proof of funds (if cash offer) or a pre-approval letter from a lending instution/ bank that there is enough to cover the offer made. The time to ask is when an offer is made. You want to know that the offer you are about to accept has the ability to go to closing. Without this crucial piece of evidence you are risking time lost off market.

What is Skip Tracing, and Why is it so Important?

Real estate professionals (the good ones) use skip tracing methods to know who they are dealing with before showing them your home. You should too. Criminals can pose as buyers to get a free tour of your home. New rules went into place that will curb this practice should a realtor show a property. Buyer Brokerage Agreements are now required (as of August 17, 2024) for a realtor to show a home to a potential buyer. But this rule does not apply to a private seller (for sale by owner). People often lie for one reason or another. Knowing who is touring your home will give you the upper hand.

There are many ways scammers can victimize buyers and sellers of real estate. Here is an article that shines some light on real estate scams, and how to avoid them.

For Sale By Owners Tip: Know The Game

Real Estate isn’t rocket science, but it is a changing market that transfers the players advantage from buyer to seller at any given moment. Waiting to buy or sell could work for you, but waiting can also work against you. The best advice I’ve heard so far has been to buy when you can, and sell when you need to sell. In other words, act with a purpose. Real Estate seems to typically go up in value. So, even when you think it couldn’t go go up further, chances are good you are wrong. So, waiting to sell could be good …right? Maybe not. If you need to liquidate a property to use the funds somewhere else, waiting to sell or listing too high could work against you. Especially, with more homes becoming available in your area.

CMA Versus Appraisal

A Comparitive Market Analysis or CMA is a metric tool used by real estate agents to set an asking price. This is typically done by looking at the homes in the neighborhood, usually within less than a mile radius of the subject property, that are comparable in size and other features. Number of bedrooms and bathrooms can be added or subtracted. Features like a pool or other structures, lot size, and other details are also taken into considerations. Condition also matters, along with any other upgrades. Homes that actually sold within the past six months weigh heavily in this estimate. The most recent sold, the better the comparable. Think of a comparable like comparing an apple to an apple. A 3 bedroom mobile home isn’t the same as a 3 bedroom block home, or a commercial building with 3 offices. The appraisal takes a CMA to a different level. An appraisal is another opinion of value, but one that banks depend on to make lending decisions.

Who’s Opinion of Value Matters?

When it comes to financing, lenders have the last say. Before a lending institution will loan you enough to purchase a home, they want to be sure that the purchase you want to make has the potential equity to return their investment, should you default and they are forced to repossess the property. For this, they will hire a licensed property appraiser to come up with a non-biased opinion of value. So if the lender has the final say, weather the buyer gets the money or not, and they depend on the appraisal to make lending decisions, it is safe to say, don’t waste time with anything but an appraisal to set the asking price with confidence.

For Sale By Owners Tip: Price Matters to People

Let’s be honest, nobody wants to pay more for anything, or leave money on the table. Buyers and sellers both want to win. In order for this to happen, both need to be realistic and place themselves in the other’s point of view. Great agents will help a seller find that place. Fairness isn’t hard to understand, but some people avoid looking in the mirrior. If You are having trouble selling a home in a buyer’s market, self reflection is a great frist step. Pricing a home has a sweet spot. If you are in it, you will know within a few days. In some cases, you could see multiple offers.

Even though there aren’t a lot of people buying right now, people are still buying. If you have listed your home and weeks are turning to months with very little interest, you may be asking for more than your property is worth in the current market.