August 1, 2015 is coming --- FBSO's and Limited Service Brokers are you Ready?
Real Estate Agents are educated professionals. They need to know the laws and processes to make real estate transactions successful --- and they are going to be even more neccessary than ever with the TILA-RESPA changes being implemented August 1.
Agents will know how the new process will work and how it will affect closings? FSBO's and Limited Service Brokers will you? Probably NOT!
Agents will know how the new process will work and how it will affect closings? FSBO's and Limited Service Brokers will you? Probably NOT!
Here are three TILA-RESPA changes you need to know now.
1) There is a new “Loan Estimate”
The Good Faith Estimate and initial Truth-In-Lending Disclosure (Initial TIL) forms have been combined into the Loan Estimate (LE).
The Good Faith Estimate and initial Truth-In-Lending Disclosure (Initial TIL) forms have been combined into the Loan Estimate (LE).
2) There is a new “Closing Disclosure”
The final Truth-in-Lending (Final TIL) and HUD-1 Settlement Statement forms have been combined into a single Closing Disclosure (CD).
The final Truth-in-Lending (Final TIL) and HUD-1 Settlement Statement forms have been combined into a single Closing Disclosure (CD).
3) The required delivery time for each of these forms is three business days
The Loan Estimate:The creditor is responsible for ensuring that it delivers or places in the mail the Loan Estimate form no later than the third business day after receiving the consumer’s application.
The Loan Estimate:The creditor is responsible for ensuring that it delivers or places in the mail the Loan Estimate form no later than the third business day after receiving the consumer’s application.
The Closing Disclosure:The
creditor is responsible for ensuring that the consumer receives the
Closing Disclosure form no later than three business days before
consummation.
It is best for a home seller to become educated about making wise choices and we offer free consultations to discuss all facets of listing and marketing your home.
GREAT ADVISE from a one time FSBO
For Sale By Owner vs. Hiring a Realtor: A True Story
When
my husband Jim and I married in 2009, we decided that moving into a
place that was "ours" was a top priority. The only thing keeping us from
this goal was selling two homes in a buyer's market. It's not easy to
sell a house in a down market under the best of conditions, but it's
especially depressing to realize that you may not even get what you paid
out of the house upon completion of the sale. That's why it's tempting
to slap up a "For Sale By Owner" sign up in the yard in an attempt to
salvage as much of your investment as possible.I conducted an experiment with my home sale. When I first put my house up for sale in September 2010, I went to Lowe's and bought a "For Sale By Owner" sign and read up on the best sales techniques that I could find online. For the next six months, I learned many valuable lessons and want to share those with you.
Real Estate Agents - Friend or Foe?
The first thing I realized when I put my house up for sale "by owner" was how nasty and mean some real estate agents are. Even a couple of aquaintances who are agents were openly hostile to the idea of me selling by owner. However, a few agent friends gave me good advice on how to price my home, looked at my staging and gave advice, and generally were supportive. All along, I had a backup plan. My life-long friend Jenny Farrell ( a ReMax agent) agreed to be our agent for both houses if my "for sale by owner" plan didn't work. I'm offering advice to agents who encounter "For Sale By Owner" homes. If you are nice and helpful instead of a condescending "Know-it-all" you might be able to get some more business.
Pricing
I made the classic rookie mistake of pricing my house too high. In a neighborhood where comparable houses were only selling for $140-150 k I went ahead and priced mine at $162k. Why? Because it was adorable! Your house is not going to be that adorable to other people. They have a specific list of things they are looking for. If your house doesn't have those attributes, don't take it personally. It will be perfect for someone. Lesson: Price your home appropriately (according to market value) from the start. Interested buyers will notice your home more in the first two weeks it's listed than any other time. Don't turn them off by over-pricing the property.
Staging
I spent at least six months getting my house ready to sell. I cleaned the basement (and my husband Jim painted it), I threw away and gave away a bunch of crap. I painted each room a simple beige and painted the ceilings and trim white. Then I packed away all family photos, piles of paper, and extra furniture. I bought new pillows for the beds and sofas and I aquired a couple of new area rugs. I bought a new table runner and centerpiece for the dining room table. These new things really served one purpose. It made it look as though I had a sense of style and coordination. (I fooled them!) People need to be able to imagine their stuff in your house, so clear out as much personal stuff as possible. Hoarders, you need professional help. Stuffing your closets and garage full of crap is not appealing to potential buyers! Get a storage unit if you can't part with your treasures.
Online listings
I created a profile on the online selling site DwellWell.com. It did not get me any leads, but it did serve a useful purpose. It allowed me to create my own "for sale by owner" site (for free) so I could share the link on my social media sites. I also created a posting on Craigslist.org. Mostly all I got from that was spam. I did have one lady call and make an appointment to see the house, only to cancel the next day.
Photographs
I invested in professional photographs by an experienced residential property photographer. Paul Gates just happens to be a classmate of mine. Whether you are selling yourself or listing your property, having photos that truly present your home at its best are a good investment. Plus, you will have a memento of your property to keep forvever. You can see the beautiful photos he took of my house here.
Kick-off Open House
When I first got my house ready to sell, I picked a Thursday evening and held an open house. I told everyone I know, sending out email, tweets and Facebook posts to all my friends. No serious buyers came, but it turned out to be an excellent excuse for my friends and me to stand in the kitchen and drink wine late on a school night.
Social Media
As I already eluded to, I used social media to let people know about my house. With more than 4,000 friends on Twitter and 1,500 on Facebook, I figured I'd have at least a chance of finding someone to buy my house. What I learned later is that even with those numbers, it still wasn't enough to guarantee a buyer for MY HOUSE. I found out very few of my friends shared my listing with their friends via social media.
A For-Sale-by Owner Offer!
I did receive an offer on my house while it was listed for sale by owner. A nice young man named Matt wrote a low-ball offer of $132,000 and presented to me with this logic, "Since you don't have to pay a realtor, I offered a lower price." Sigh. I am the one who was supposed to be saving the money, not you, moron. I countered with $150,000 and never heard from him again.
A Word About Open Houses
I held an open house every Sunday through September and October and even into November. There was at least three hours of cleaning ahead of each open house, and I always put out fresh flowers on the table. Then I got a few helium balloons, put up some sturdy signs, and opened up the house for four hours. Looking back, these open houses were a total waste of time and money. I learned that open houses do not sell homes. What does? THE INTERNET!
Listing the House
I listed my house in April 2011 and in a matter of three months it was sold. My realtor Jenny was a great moral support, but realtors really earn their keep during the offer negotiation and closing process. In fact, they don't spend much time trying to get people to buy your house. The internet is like a magnet that draws people to your listing. House sales are all about numbers. The more people who know about the house and can find the house, the higher the likelihood one of those people will buy your house. When my house was for sale by owner, the only people who saw my house were the people who drove by or found out from friends. People who are looking for a house usually start their search on the internet and then go to see the houses that match their criteria. That is why listing the house is so valuable. More people can search for and see your house.
The REAL Offer
I received a reasonable offer on the house ($142,000) and counter-offered. We ended up with a very respectable $145,000 purchase price. I must say, the whole offer-counter-offer process can be like a chess game. Both realtors (yours and theirs) usually have a good sense of what is going on with their clients. They are both motivated to sell the property, and they have really valuable advice to offer at key decision making moments. For example, the person who made the offer on my property asked for some pretty pricey ad-ons, and I said no on the advice of my realtor. It all worked out, so I did the right thing. If I would have been on my own, I probably would have wasted a bunch of money on unnessary stuff, or second-guessed myself to death.
Lessons Learned
- People tell you not to become "emotionally attached" to your home. In practical terms, it means that you will inevitably behave as though your house is worth more than it is due to your emotional attachment. I experienced this several times and a good realtor will talk you though the real chances and the real numbers and bring you down to reality.
- The power of the internet is what will bring the right buyer to your home. Only large real estate companies that use the MLS (multiple listing service) will have enough search engine power to get your home noticed.
- Your realtor earns their keep by assisting you with the offer/counteroffer and the inspection process.
- The advice of an experienced realtor can ultimately save you time and a lot of hassle. That is worth the money.
