Thursday, March 24, 2005

Lessons Learned: FSBO in New Jersey

Recently, while sifting through some old email files, I ran across this bit that I wrote for a colleage. It is based on my family's experience in selling a house by owner in New Jersey. It's over a year old, but I suspect everything there is still valid. I hope someone finds it useful.

1) The listing agent in New Jersey does almost nothing except list your house and advertise. Later in the process, they are useful to run interference between you and your buyer's agent. If you can handle the pressure and not take the buyer's agent personally, you don't need a seller's agent.

2) You can get listed on MLS (what all of the realtors see) for about $500. Several websites will do it, but the best we found was MAKE SURE that the agent they send to you puts you on the right MLS listing. There's one for every county, and the "Garden State MLS" is only for the north of the state. Ask local agents what MLS they use. Almost all of them will use only the one for their county, so being in the wrong one is worthless.

3) Most local agents are willing and eager to help FSBOs. They understand that if you don't get it sold, you may go with them next. Use this to your advantage. Many will give you a free overview of other properties that have sold in your area so that you know how to price your house. They also can be a good source of information (like which MLS to use).

4) Real estate agents tour all of the new houses on the market on Tuesdays. Agents will have open houses just for other agents on Tuesdays. No law says you can't have an open house on Tuesday, too. Just don't claim to be a realtor. We sent out about 50 postcards to local agencies advertising an open house for realtors, and about 15 showed up. Have food, as the realtors are very busy on Tuesdays and get very hungry.

5) Plan to work with buyer's agents. 2.5% is a good number. Tell all agents that call that you will pay 2.5% from the proceeds to any buyer's agent. Price the house accordingly. Mention this on the advertising as well.

6) Glom onto other realtors' open houses. If there is another house in the area with an open house one Sunday, put up your own open house sign as well.

7) Get a good real estate lawyer early in the process. Ours wasn't very good, but he was ok. Absolutely everything in New Jersey is handled by the lawyers.

8) Put together a buyer's disclosure statement. Have it out for buyers to take. Also, put together a color brochure. It helps buyers remember your house. Also, anything on the area (local parks, etc.) that can be displayed is useful.

9) Put a sign in the yard with a information holder (tube, whatever). Put your color handout in that, too. Be sure it has the price on it, or you'll get a ton of people who can't afford your house calling just for the price.

10) Never take negotiations personally. It's all business. Don't burn bridges, as sometimes people come back. Expect price haggling. Expect people to criticize your home. Expect agents to think that you don't know what you're doing. Expect most agents to give you a sales pitch (and be nice and let them). Expect a few crackpots. Let realtors show your house while you keep out of the way. Don't let people without realtors out of your sight.

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