Everyone has heard of FSBOs (or Fizzbos or Fisbos – the spellings vary). A FSBO is a seller who is selling without a real estate agent.  First, let me remark that the term “FSBO” is just plain stupid. All houses are for sale by owner, aren’t they? It isn’t the neighbor selling the house, it’s the owner!  So it is a better description to say that the seller is selling without representation.

So what do we call a buyer who is buying without representation? Well, there really isn’t term for them, but some of us call them BUBBAs – Buyer Unrepresented By Buyer’s Agent.

How do you get to be a BUBBA?  Visit a builder’s model home without your real estate agent in tow. Most builders will not pay your agent’s commission unless your agent goes with you on your first visit. You can still hire an agent to look out for your interests, but you’ll have to pay him or her out of your own pocket.

The same thing can happen if you go into an open house on a Sunday afternoon or if you call the listing agent directly to see a property.

So, if you don’t want to be a BUBBA, choose an agent before you start looking at houses.

It’s one thing to choose to be a BUBBA, but to end up one by accident is just a shame.

(C) 2006 Susan Pruden.

As many of you know, I keep very close track of the real estate market in Cheverly, so I’ll use Cheverly as my example. However, the following happens all over the place.

When I search our listing service, I have go through the results and back out the properties that say they are in Cheverly, but really aren’t. This isn’t uncommon – many sellers and agents figure that they’ll use a popular neighborhood name to attract buyers to the property. These sellers know that if they can make the buyer think that the house is in a desirable neighborhood, they’ll get more showings.

Besides being annoying, it does a disservice to buyers. In some cases, it could lead to lawsuits.  First, the buyer often feels manipulated, which doesn’t usually lead to good offers.

Also, in Cheverly’s case, the town is a municipality with tax and service benefits that are not available to properties that are not within the municipality. So by advertising that a house is in Cheverly when it’s actually in Tuxedo or Landover Hills or Bladensburg, the seller is implying that the property is subject to those same benefits when, in truth, it isn’t.

Buyers have been known to sue for misleading information like that.

And it just goes to show that honesty is by far the safest policy.

(C) 2006 Susan Pruden.

I’ve been in some houses recently that have absolutely fabulous works of art. Or just cool belongings. A few of these houses belong to friends of mine and some are houses that I’ve shown to potential buyers. It got me to pondering the importance of knowing what you own.

So I went on a search for home inventory software and found a website from the Insurance Information Institute called KnowYourStuff.org. They have an amazing and free (did I say FREE?) software product that allows you to organize your belongings by room or by category. You can load photos and receipts to establish value. If you’ve ever had appraisals of jewelry or artwork, you can scan those in and attach them to the inventory.

The website also has lots of tips on how to inventory your belongings, where to store the inventory and even a list of items to include.

I didn’t think I really owned anything of any substantial value, but when you start adding up toys, clothing, CDs, computer software and many other smaller items, you realize that there is considerable value in everyday mundane things. Like dishes. Lamps. Winter coats. Appliances. You don’t just inventory the big ticket items, you inventory your whole life. Because that’s the kind of inventory you’ll need if the unthinkable happens.

This software is incredibly easy to use and even fun to start setting up. I sat down with my laptop and just started in one corner of the living room. I entered everything I saw – okay, not my husband – everything from the waste basket to the fireplace screen. Later I’ll start entering values for stuff because I have no idea what some of it is worth.

There’s even a “room” called Donation Room. I created a new room called “Yard Sale”.

Maybe I’ll have one someday. This  is a good start.

(c) 2006 Susan Pruden

Mistake #1 -- Placing the Wrong Price on Your Property
Every seller obviously wants to get the most money for his or her product. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property. Also, it may lead other buyers to expect more than what you have to offer. As a result, overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price.

Mistake #2 -- Mistaking Re-finance Appraisals for the Market Value
Unfortunately, a re-finance appraisal may have been stated at an untruthfully high price. Often, lenders estimate the value of your property to be higher than it actually is in order to encourage re-financing. The market value of your home could actually be lower. Your best bet is to ask your REALTOR® for the most recent information regarding property sales in your community. This will give you an up-to-date and factually accurate estimate of your property value.

Mistake #3 -- Failing to "Showcase"
In spite of how frequently this mistake is addressed and how simple it is to avoid, its prevalence is still widespread. When attempting to sell your home to prospective buyers, do not forget to make your home look as pleasant as possible. Make necessary repairs. Clean. Make sure everything functions and looks presentable. A poorly kept home in need of repairs will surely lower the selling price of your property and will even turn away some buyers.

Mistake #4 - Trying to "Hard Sell" While Showing
Buying a house is always an emotional and difficult decision. As a result, you should try to allow prospective buyers to comfortably examine your property. Don't try haggling or forcefully selling. Instead, be friendly and hospitable. A good idea would be to point out any subtle amenities and be receptive to questions.

Mistake #5 - Trying to Sell to Lookers
A prospective buyer who shows interest because of a "for sale" sign he saw may not really be interested in your property. Often buyers who do not come through a REALTOR® are a good 6-9 months away from buying, and they are more interested in seeing what is out there than in actually making a purchase. They may still have to sell their house, or may not be able to afford a house yet. They may still even be unsure as to whether or not they want to relocate.

Your REALTOR® should be able to distinguish realistic potential buyers from mere lookers. REALTORS® should usually find out a prospective buyer's savings, credit rating, and purchasing power in general. If your REALTOR® fails to find out this pertinent information, you should do some investigating and questioning on your own. This will help you avoid wasting valuable time marketing towards the wrong people. If you have to do this work yourself, consider finding a new REALTOR®.

Mistake #6 -- Being Ignorant of Your Rights & Responsibilities
It is extremely important that you are well-informed of the details in your real estate contract. Real estate contracts are legally binding documents, and they can often be complex and confusing. Not being aware of the terms in your contract could cost you thousands for repairs and inspections. Know what your are responsible for before signing the contract. Can the property be sold "as is"? How will deed restrictions and local zoning laws affect your transaction? Not knowing the answers to these kind of questions could end up costing you a considerable amount of money.

Mistake #7 - Signing a Contract with No Escape
Hopefully you will have taken the time to choose the best REALTOR® for you. But sometimes, as we all know, circumstances change. Perhaps you misjudged your REALTOR®, or perhaps the REALTOR® has other priorities on his or her mind. In any case, you should have the right to fire your agent. Also, you should have the right to select another agent of your choosing. Many real estate companies will simply replace an agent with another one, without consulting you. Be sure to have control over your situation before signing a real estate contract.

Mistake #8 - Limiting the Marketing and Advertising of the Property
There are two obvious marketing tools that nearly every seller uses: open houses and classified ads. Unfortunately, these two tools are rather ineffective. Less than 1% of homes are sold at open houses, and less than 3% are sold because of classified ads. In fact, REALTORS® often use open houses to attract future prospects, not to sell the house.

Your REALTOR® should employ a wide variety of marketing techniques. Your REALTOR® should also be committed to selling your property; he or she should be available for every phone call from a prospective buyer. Most calls are received, and open houses are scheduled, during business hours, so make sure that your REALTOR® is working on selling your home during these hours. Chances are that you have a job, too, so you may not be able to get in touch will many potential buyers.

Mistake #9 - Choosing the Wrong REALTOR®
Selling your home could be the most important financial transaction in your lifetime. As a result, it is extremely important that you select the REALTOR® that is best for you. Experienced real estate agents often cost as much as brand new agents. Chances are that the experienced agent will be able to bring you a higher price in less time and with fewer hassles.

Take your time when selecting a real estate agent. Interview several agents; ask them key questions. If you want to make your selling experience the best it can be, it is crucial that you select the best agent for you.