 Hi guys welcome back to the independent investor channel really one of the most important videos that I've put out in the five years of running the independent investor channel was my for sale by owner video that I did I've owned real estate in my past. And a lot of the success that I've had in personal finance investing, etc, has stemmed from my success in real estate. And this is very commonplace it with a lot of people that I speak with your home can be an extremely important wealth building tool over time and a lot of people don't look at it that way. In this video I'm going to do an update to one of my most popular videos. It was a for sale by owner video that I did, and I earmarked the steps that it takes to sell your home successfully. And since that time I've received a lot of comments, thousands of comments have come through on that one video, asking about certain aspects or phases of the process, and how I was able to get from the beginning stages, through the negotiation phase for a month or month and a half to ultimately closing which is where you want to be. Okay, now with this red hot real estate market right now. It's extremely important for you to weigh all of your options. And I think a lot of people out there, just opt for the traditional status quo of opting for representation on the seller side to help them sell a home which alleviates them from doing anything, other than just packing up their stuff and doing everything that is usually involved with the home sale, which could involve moving, arranging for moving, setting up arrangements and the new location, that type of thing. For you guys that want to take on a little bit more responsibility are interested in the prospects of saving a truckload of money at savings okay I was able to save about $8,000 on about a $215,000 transaction. A lot of you guys are looking at home sales right now double that. Okay, so when you want to talk about 6% per $100,000 it's very, very easy to understand that you could be up in the $20,000 $30,000 figures for closing costs to the brokerages at closing. And a lot of people misconstrued this on the onset because they think that the only way that you can sell a house is going through a realtor. Now I want to premise a few things before we get into this video. I did a pretty good job on my for sale by owner video of conveying a position of look. This is what I did. This isn't a bash on realtors. As a matter of fact it's the opposite. I think realtors are fantastic. They do a very, very difficult job. It's very, very difficult. It's very, very aggressive and it's very, very competitive. And I think a lot of people's personality may not jive with what is potentially required in a home sale negotiation. So you really need to do your own research as I did watch my first for sale by owner video tutorial because that actually walks through the first steps and the middle steps and getting to closing on how we were able to negotiate through my first time for sale by owner process. I also want to premise that if you're looking to this is just for selling. Okay, if you're sitting on some equity and you're sitting in a hot market. Why not entertain the prospects of at least looking into what this could mean for you. Please understand that the bottom dollar that you're going to be giving away at closing may or may not be worth your your while. In other words for sale by owner is not for everyone. Okay. And a lot of people will tune into a YouTube video for sale by owner and they'll tune in for 1520 minutes and they'll think that that's the end all be all I'm here to tell you that that is completely untrue. And I would align myself with the realtors in this perspective, in that the majority of for sale by owner individuals that engage on a for sale by owner process, this step in a lot of different key areas, and therefore undersell the house or fail to sell the house all together and end up opting for a realtor anyway. But I contend that if you give yourself the best shot by covering all of your basis and covering all of the things that I'm going to discuss in this video, that in retrospect I did, but I learned a lot by going through the process. And I'm going to share those things with you guys now. Okay. So the first thing is to understand that it's not a free pass. Okay. For sale by owner is not just saying hey I want to opt into the for sale by owner program, and then crossing your arms for two months. It's not going to work that way. You will fail. And quite frankly, I would never be an advocate for thinking that you're just going to get free money in this life. You will work for this money. There's a few key strategic areas where you can actually provide yourself probably just as good a value as the realtor in a couple of different required departments. What I'm going to do is I'm going to link up the description of the for sale by owner listing that I was able to put on Zillow and realtor.com and truly a okay I ended up not needing for sale by owner website, although there was some pretty good on there with regard to the home sale process, contract assistance, MLS listing, that type of thing. So you're free to kick over there and check that out. I did opt for their premium service which included the MLS listing piece. Now you're going to have to opt for a quarter point of brokerage fee to be paid there to get that listing to the MLS. I'll talk a little bit about that a little bit later in the video. But the first few things that you really need to understand is that repairs are better done before you enter into a negotiation. If you think that there's going to be something that's going to show up on a home inspection. And trust me guys the home inspectors are going to come in and they are going to find stuff. They're going to find stuff wrong that's what they're paid to do. If I'm a buyer and I'm paying for that service. I want them to find things. Furthermore, if I'm a seller, I also equally want them to come in and find things that may be that may be subject to scrutiny later on down the line, I would rather deal with them. The secret here for a seller is to make sure that you're identifying those things prior to chimney, HVAC, major utilities and systems, sprinkler systems, things like that that you know that you can repair or have somebody come in and repair ahead of entering into a home negotiation. That's better because once you're in the process, there might be some requirements there to only engaged with licensed contractors that can do the work and be put on record back with the backing of a license. Okay. The second thing is to understand that you need to clean the house top to bottom. You're going to clean the house and you're going to clean the house correctly. I've looked at for sale by owner listings a lot and they're horrendous. They're absolutely horrendous. Now I've looked at listing photos by realtors and for whatever reason, they're also horrendous. And a lot of it is a shared culpability in that the homeowner doesn't want to clean the house and the realtor is not going to come over and tell you to clean your own stinking house like you're a fourth grader. You need to clean the house top to bottom. If you want to put a vase out on the counter, I think I could have probably made it a little more homely, but at least to clean up all of the clutter because potential buyers do not want to see clutter. We want to make sure that we turn all the lights on when we eventually photograph the house. Now repairs are a little bit different than cleaning, okay. Repairs, if you need to paint baseboards, if you need to do some repainting or touch ups on the walls, things like that. Want to try to minimize the personal touches that a lot of people think that they need to have pictures hanging on every square inch of every wall in the house. We want to make sure that we're taking photos that accentuate the house. And one secret that I had when taking my photos is to hold the camera or my iPhone up into the corner of the room and just hit the shutter button and take a bunch of photos and go in there and pick the best ones. The best angle that really gets the size of the room accentuated through your photo taking. The last thing I'll mention is the write up the write up has to sell the house. And this is where you can provide a strategic advantage as the homeowner, as opposed to a realtor who has lots of practice doing write ups, but nobody knows the house better than you. Okay, this is very, very important and you're going to find in my listing that I'm going to share with you guys in the description below. I think you'll find when you read through that, you're going to find that you can actually envision being in the backyard barbecue with the family, enjoying the landscaping enjoying the vast backyard you really need to sell how easy the houses to live in, as opposed to strategically just putting the features of the home, rather than really speaking to people on a personal level and conveying how personal the home is to you. All right. The next thing I got and this is a question that in retrospect I may have done a little bit different. The broker fee always comes up in negotiation, etc. I negotiated it off the 3%. If I had it to do over again, I may not have been so aggressive on negotiating that 3%. And there's going to be people out there say Ryan you're wrong it's always negotiable. I agree, but you're going to get what you pay for. Okay. So coupled with the question of, should we just go into a for sale by owner and only look for buyers that are also looking to buy without a realtor. Absolutely not. If you are looking for a video that's out there trying to identify that transaction where you're going to save on the totality of brokerage fees at closing the total 6%. I have a video for you. Okay, my negotiation and transaction did in fact involve the buyer's realtor, and I would go out on a limb and say that the majority of people, myself included fill a heck of a lot more comfortable entering into a buying transaction if I have the representative of a realtor. That's for a lot of different reasons guys if I'm unfamiliar with the area. Whatever I'm going to seek out the services of a real to who may have some specific knowledge about school systems, local neighborhoods, where are certain neighborhoods that are popping up new developments existing developments etc that are going to suit my needs. So I would venture to guess that the majority of buyers that are coming to the table that may potentially put you on the long list of houses for sale as a for sale by owner are coming to the table with representation. So if you want to try to cut those people out. Good luck to you. It just didn't seem to make a whole lot of sense to me. And when we all sat down at the table to discuss the terms. They weren't interested in buying the house. They weren't interested in doing so without representation. It would have been my choice at that time to ask them to kindly leave. I'm not interested in dealing with a buyer with a realtor or what would be even more rude and what people might be willing to do but good luck to you is cut the realtor out of the deal at that particular juncture. I really wouldn't recommend doing that because the realtor in my particular transaction in my one situation that I've negotiated for sale by owner was actually was actually very, very critical in the negotiation piece, the amendments the contracts. And then I had the obligation to the broker that she represented, right. So everything had to be on par with sales contracts, amendments of sort, addendums things like that. Now I had those things pre done, but the standard of the transaction was actually improved upon because there was an actual licensed realtor involved in the transaction, representing the buyer. Now keep in mind as a seller, the, the, just because there's a realtor involved doesn't mean that they have your interest in mind at all. They don't, they are not charged nor do they have any type of fiduciary responsibility to you whatsoever. Remember, you're representing yourself, but be cordial. Okay, this is a business transaction. And I think what helped a lot of the time is to acknowledge, look, I want to sell a house, you have buyers that want to buy a house, let's keep our eyes on a successful transaction, and make this happen within the time frame that is going to be, you know, conducive to both parties. And I think if you can enter into that, and keep your eye on the prize. I think you'll find that the realtor really does provide a ton of value, even though you're selling the house for sale by owner now what drops the 6% to a potential 3% sales commission to the buyer's agent directly. I was able to negotiate that down and in retrospect, I really feel like that was kind of splitting hairs to be honest with you. They put a wrinkle in the transaction a little bit in that the realtor wasn't working for traditional 3%, which part of that goes to the broker anyway if you understand a little bit about real estate agent, and or realtor compensation, you'll understand that they don't keep all of that. And I do want to footstomp the importance of not alienating 97% of the market out there by just saying hey I want to deal with another for sale by owner or a non represented buyer, because I just don't think they exist in as much as much as you think that they might, right, and it degrades from the quality of the transaction if you're going to try to do amendments or trying to do contracts up to the speed of what a licensed realtor can do. I think you're probably setting yourself up for some real disappointment and some real headache. And so I really want to footstomp that it is negotiable. I would just be careful on it. I think if I had it to do over again, I would just go ahead and agree to the 3% and we could move on with our lives. And that way, the integrity of the transaction is being maintained at the standard by which the realtor is used to working under. The next thing that I failed to mention in the first video that I came out with on the for sale by owner is the ability to try to get a fair market value that there's a couple ways that you should go about doing this and then there's the way that I went about doing this. The way I went about doing this and I might be the only one but if this sounds familiar to you. If you want to continue go ahead, but I was going on to Zillow and Trulia and printing out active listings and their, their write ups beforehand so I had a stack of write ups off of Zillow from my neighborhood and associated neighborhoods. The problem with doing that is, it's really difficult to do a comparative market analysis. In other words, some of the homes that I was printing out may not have compared as well as I wanted them to, or I was justifying the fair market comparison data that I was pulling, I might add this is publicly disclosed active listings and doing so in a manner that was trying to tailor the price now I had a very, very good idea of what my house was worth. Okay, doesn't matter. It doesn't matter what I think it doesn't matter what I'm able to prove through Zillow or Trulia or print and disclose none of that really matters. What really matters is to seek out the assistance from a professional real estate agent realtor have them do a fair market assessment or fair market analysis for you an FMA. It's free of charge to do. Now, I think the majority of the time this is kind of a feeler to win business as it rightfully should if I'm a realtor and I'm doing a fair market analysis for somebody I would expect that at the very on set that that's considered to be somewhat of a job interview to come over discuss what I feel is the farm fair market analysis and issue it some sort of paperwork or document that the FMA had been done and completed and that according to the time of the assessment that the house was worth X amount of dollars. I would do both. The next thing that you could potentially do is have an appraiser come in a lot of people out there know appraisers I did, and I use the services of an appraiser to actually get an independent type of analysis to cross compare the FMA to what I was getting from the home appraiser. Okay, now if you plan on selling in the summer or you plan on selling in the winter, you want to make sure that that appraisal is done within a few months or within the time period that you expect to sell. If you do not know, I would recommend doing both because the market can change a little bit from summer and it all revolves around the school season. When kids are in school, people are less apt to transfer when military transfer season comes around. It's more apt to be a little bit more lively, as opposed to off season when those types of movements of people are not quite as frequent. So you want to make sure an account for that in your particular market and only you are going to know when and if that's applicable. Okay, so getting the home's value. Remember what I said it doesn't matter what you think, because eventually you're going to have to sit down and the realtor is going to say this. Let's discuss price. Okay, you want to be able to limit the discussions at the table and slide official documentation across the, the table, basically attesting to the home's value that really does kind of take out some of the gray area and room for potential negotiation or mitigation or earmarking certain deficiencies on the house that may or may not affect the value, but a good realtor is going to go in there and identify those things. If you haven't done your due diligence in providing any type of documentation, a testing to the value of the home, a good realtor is going to go in there and nitpick the heck out of you. Okay, and you may end up just kind of yielding to those nitpick things and you may not even need to, because the appraiser has already come in and said hey, it needs a new roof. It's going to be X number of dollars to fix the house is worth this. Okay. And so if you have that documentation to provide at the time of, let's discuss price. So much in the negotiation and the home price. Let's be real is everything. Okay, it's everything and an official appraiser that comes in and says your house is worth X before entering into a transaction. It's nice to know that you'll be able to cross the finish line at or around that particular number. Okay, and one thing I'll add to the for sale by owner just a little trick of the trade. I'm just getting all kinds of phone calls from all kinds of agents saying I can promise you this, I can promise you that I can get you this I can get you that. All that is actually unethical and it's illegal. They can't do that. Okay, it's a trick to get you in under their envelope. Okay, which is a large reason why ethically I wanted to do for sale by owner. I was 100% vested I was not on the fence I was hell bent on doing it and that's part of why I was able to negotiate it successfully is that I was hell bent on learning and do everything I could possibly do to see the transaction through and that's the type of perseverance that you guys are going to need to have. I'll promise an exuberant price one month or a month and a half will go by and the finance appraiser will come in at the end of the negotiation to make sure that this exuberant offer is somehow something that the bank or the lender is willing to lend on. So if two things are going to happen, either they're going to agree with that exuberant price and say yeah sure, we'll go ahead and loan on this property, even though we don't think that it's worth that. We're going to go ahead and put that loan through and approve it at the at the negotiated price, or what's more realistic is they're going to come back and they're going to actually tell you what the house is worth. I'm going to have you go back to the seller and renegotiate between the seller and buyer on the disparity between what the house is actually worth and what the agreed upon sales prices you may have a bit of a quandary there. An agreed agent is just going to say hmm and they're going to act like they didn't know on the onset that the house actually wasn't worth what that is and that's also where that FMA or that appraisal of your home is going to be worth all hinges around what the house is going to be worth right if you sell any item in this life, you have to have an idea of what the item is worth. And there's a lot of great area with real estate there really is, but not that much. So there's a little bit of a trick and a trade there a little bit of a sleight of hand to say hey I can get you this. When they full well know that it's all contingent upon the finance appraiser coming in a few days before closing there'll be a quiet period before closing. While they extrapolate the data, and I'll talk about that a little bit more when we get to the finance appraiser piece okay. If you're coming for sale by owner don't think that you're on your own. Okay. It was explained to me in a way that I'll explain to you now and if you're watching this video and you're really interested in for sale by owner. I want to stress this it's very important to understand that the title company does the work. The title company does the work. The title company does the work if you want to take that away from this video. It's more the wiser for it. Okay, the title company has the real estate attorney on retainer to review every single document submitted in a home sale package. Okay, they are going to go back and they're going to review any previous property sale history making sure that all the required documents are in the sales package addendums, etc. Before the title company even signs off on the package. Okay, furthermore, as a for sale by owner. I don't know if they're required by law to provide you minimum documentation next necessary to execute a transaction on your own and or represent yourself. Mine did. Mine gave me a for sale by owner package now I only used the addendums. Excuse me the disclosure aspect of the for sale by owner package but if you have a title company that's identified already. Go in there, talk to them, say hey, I have my property I'm willing I'm looking to sell for sale by owner. Do you have any documentation that can help me through the process. And they're going to provide you a package that's going to help you give some preliminary information on what to expect in the process, what to do. They're going to give you the point of contact with the title company, they were available to me to answer any questions that I had because they don't have an interest in the monetary side of the transaction. They have a vested interest in the legal side of the transaction representing their local municipality to make sure that all transactions real estate related are up to snuff. Okay, so make sure that you're using the title company they do all the work. Okay, you're going to close at the title company. Right, they do all the work. They review and make sure and that's what a lot of people think well for sale by owner that's really risky isn't it. No it's not risky. Okay, the title company is the one that represents you in the transaction they're the ones that review the documentation that has transpired addendums repair work that has been done the sales contract and the disclosures up to that point. If there's anything missing, then you can supplement the record at that time, if there's anything missing but there really shouldn't be if you followed some of my direction and making sure that you involve a realtor in overseeing the process at least on the buyer's capacity. Okay. Next is the MLS listing. I mentioned the for sale by owner. I put all of my information into the website and it was able to populate to the largest most popular websites before it could even get listed with the MLS which took about one day I believe I already have the household. Okay, I didn't need the MLS so I actually was able to go back and get refunded the point to five broker fee to to the broker for for sale by owner for actually providing that MLS listing service. Now I don't mention that to underscore the importance of the MLS. It's super important. Don't get me wrong. Okay. In my particular transaction, I didn't need it. Okay, most people are on realtor, Trulia and Zillow. We've all been there we've all done that and when a new home comes up on the market. When my home popped up on the market in early March outside of suburbia Detroit, and it just happened to be snowing outside but when my photo hit as a new listing, and it was sunshine with the flag flying out front. It sold in a matter of minutes. Okay, so I never needed the MLS listing. Why do I tell you this. The MLS for me was kind of a backup plan. Okay, I needed to sell my house, which was again part of that core transaction acknowledgement. I needed to sell my house and they needed to find a good buyer. We ended up finding a great buyer after just a few minutes of it being live and then and then it was done the house was basically sold. Now you enter into the transaction phase of the process, goings on back and forth, etc. There were repairs that were required during the transaction that I had to get a licensed contractor to come and execute during the transaction phase. And I will just say they were big repairs asbestos related chimney related. Okay, so just to give you some idea. No repair is unrepairable. But these are some of the things if you can earmark before entering into the transaction. Please do so. Now one of the key impasses during the process or toward the end of the process. What you need to enter into the closing is to understand that finance appraisal phase. This is the most important phase. This is not to be understated. And this is really where I think that the real estate transaction itself enters into the most important phase. But I think it's also the, the, the phase of the transaction that most people have already thrown up their hands. Because of being in the for sale, they just want it gone. They want it off their plate, the buyers are getting Nancy there's a lot of anxiety around the transaction, and they just want it to come and they want it to go and they want it to appraise for value. Okay, that's all true in most cases what I would say from a for sale by owner perspective is this, if you're for sale by owner remember you represent yourself. All that documentation that I talked about that I ended up ended up chalking up this kind of feudal, all those printouts that I was able to print off of Zillow to, to try to determine fair market value. Now remember, at the time of submitting these documents to the finance appraiser, I did not have a fair market analysis, and I did not have an official appraisal. It was unofficial in that I had talked to a friend of mine, but there was no documentation nor was their payment rendered for said assessment on the property if I would have had those two documents. It would have been at this time that I could have provided that to the finance appraiser when the buyers. The finance appraiser, since in their assessor and it is in their best interest to make sure that they are buying a house at fair market value. Okay, furthermore, it is in their best interest to come in and if there is any discrepancy at all between the agreed upon sales price, and what they are looking at with regard to fair market assessment. In other words, if they come into a property and it's the sales price is 450,000, and all homes in that neighborhood aren't selling for over 350. They may come back and say, adjusted, make it happen, or the deal falls through, it's not going to happen the way that you want it to happen. This is the disparity between the two. The real takeaway for the for sale by owner that I want you to understand is this fair market this finance appraisal is going to be an appointment based and you're the only one that's allowed to be there. Okay, the buyers realtor is not allowed to be there. Okay, they're not. And this is typically when a home buyers realtor will represent, excuse me, the sellers realtor, if you're not for sale by owner will show up and they'll escort the finance appraiser through the property inside and out to make a general walkthrough of the assessment to the value. It's during this time that you're allowed to submit any documentation to the finance appraiser that can be taken into consideration in the assessment of the fair market price. Now, since you're for sale by owner. Okay, it's very important to understand that that's your opportunity to shine. Okay, you want the highest price for your home. Your assessed value was 300,000 for example, and you know that the house is 300,000 finance appraiser it's unethical for them to promise you a price or tell you what that price is going to be it's unethical so don't expect them to do that. What you can do is say look, I've already had a fair market assessment on the property. Here it is. I already had a an appraisal done of the property just this spring. Here's the documentation. They are required to take that documentation and you are in fact liberty to submit that documentation, supporting your selling price. It's very important. This right here is going to be your your very investment in time everything that you've done up to this point, the write up for sale by owner, the taking of the photos, the showings in the house which I found to be very enjoyable I can show my own house, turn on all the lights, walk people through. It's great to have somebody ask questions of the for sale by owner and I just embraced it. I thought it was great. If you feel uncomfortable talking to a homeowner who's choosing to represent themselves, then that's your problem. My idea was to get over it, but we only showed the house one time, and it sold the very first time we sold it which I feel like is a lot of the justification for for sale by owner, because we're in a down market real estate market real estate agents really do. We had a ton of value in the marketing aspect, what marketing is really necessary right now when some homes are getting 75 cash offers on them. In other words, there's a shortage of homes on the market. Let me just tell you at the closing of this video, people want to buy your house, people want to buy your house. The question for you is, do you want to invest the time and energy and work necessary to successfully for sale by owner type of a negotiation, or do you just want to hire the services of a third party realtor to come on and do the work for you because here's the thing the bottom line is this, the work needs to be done. Whether or not you choose to do it on your own, or whether or not you seek to employ the services of a professional, but where for sale by owner fails a lot of the time is people who perceive for sale by owner as just being out of jail free card and showing up to closing and check and collecting your fat check. It's not like that. It's really just a supplement for the work that needs to be done, whether or not you want to do the work on your own, or hire the services of a professional to do that. The guys I appreciate this follow up man opportunity. I'm going to leave the link to my listing in the description you guys can kind of check that out. You guys can see what I'm talking about with the photos, the write up the cleanliness. Okay, the repairs that were done in the house. Some of the things I did to negotiate that contract will really help I had about 45 pictures online. Go overboard. If I'm a buyer. Photos are what sells it for me curb appeal and photos. That's it. I want to click through and I want to get a good idea of whether or not I want to call on this house. And when it comes right down to it, your listing photos and your description are going to be what is going to produce that those leads for you. And remember, I will close with this. 100 leads. You just need one good one. Okay, good luck to each and every one of you guys out there looking to sell your house for sale by owner. I offer this as a testimonial through YouTube. I was able to save just over $8,000 at closing for sale by owner would I do it again 100%. I will never ever in this life sell another house that I own without representing it myself. Buy a house. Not so much. I will absolutely seek out the services of a realtor and this was something that got missed in the first video is my understanding of options and understanding that realtors are fantastic professionals that can really aid in the process of a home sale transaction and negotiation. I just think we're in a time right now where you need to explore all options and choose what it is that's going to be right for you. Please leave your comments at the bottom guys if you'd like to comment content coming through the channel. If you haven't subscribed to the independent investor channel this is a little off topic for me but it's a very important topic that doesn't get talked about very often. The biggest business transactions that I've had in this life have not come in way of the stock market it's come in way of real estate transactions. And this is a great way to not only sell your house for top dollar appraised value etc but also save a little bit of closing cost on on paying those realtor fees out if in fact you look to opt for the for sale by owner program if you know somebody out there that's interested in a good testimonial on YouTube. And make sure and share this testimonial. This is real. Okay, I'm not just coming on and just talking about something that I feel passionate about I actually went through this process. So I'm a good resource to reach out to if you have questions about the transaction process. Please leave those in the comments as I do review those and I comment back to help each and every one of you guys that's looking at the prospects of for sale by owner and making sure that it's a correct fit for you guys thank you so much for tuning into the video and good luck in your investing future.