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One of the questions that comes up often is, "What is one of the most important things that you have to look out for as a For Sale by Owner?" (FSBO) I am going to answer that and then give you a couple of suggestions.
Probably the most important thing that you need to look out for is the qualification of the buyer. The last thing you want to do is start showing your property to 10, 15, 20 or 30 buyers, not knowing whether or not they qualify. Everyone is going to fall in love with your house more than likely, but can they actually purchase it? They may want to, but do they have the ability to?
If you get a call or an e-mail and they say they would like to see your house, one of the first things that I recommend you do is say, "I would love to show the home but I would like to ask you have you been pre-qualified with a bank?" Statistically speaking, 80% to 90% of the people that are shopping for For Sale by Owner homes have not talked to a mortgage company yet. That is not a bad thing, it is just more of a fact. That is a statistic that has been measured.
You want to ask the question up front - Is this person that I'm about to invite into my home pre-qualified? If somebody says they have been pre-qualified, then let them in as quickly as you can, because obviously, THEY are a good candidate. But, if they say they have not, then you need to ask them the next question, "If you like the house, are you willing to get prequalified with my mortgage lender?"
If they say no on question number 1, then, on question number 2 there are a few answers you are looking for. First, you want a definitive yes. Secondly, if they say no - then YOU say you are curious about their hesitation. They may say I just did a short sale and I have bad credit. If that is what they say, there is no reason for you to show the home. Either they say yes, or they say no. And you ask the second question, or they say no and hesitate, you should find out what's going on. You may find out they have bad credit, and you do not want to waste your time and have people going through your house if they actually cannot qualify to buy it.
Here is a suggestion. Before you even start the process of For Sale by Owner, I suggest you call a local mortgage professional or a mortgage lender. There are plenty of them out there. You call them and tell them you are going to sell your property on your own, you are going to do some advertising, you are going to get leads, and ask them if you can have the buyers contact them. Or ask if you give them some buyers, will they mind contacting them and taking them through a prequalification process. Then they need to let you know if the people are qualified to buy your home. There are plenty of mortgage people out there that will do that for you. Maybe your local banker will do it. That way you don't waste your time, and you don't waste the buyer's time.
My next video in this 3 part series is about "Tips on writing a legal contract". You will want to see it most of all!
I am Greg Harrelson with Century 21, The Harrelson Group. If there is anything I can do to help you, I am here for you. I hope if you do try to sell your property on your own you are successful, but in the event you need some professional help we are here for you. Thank you for visiting our website and watching these videos.