Expect more work if selling on your own
Q: We are just starting to sell our house by ourselves. The idea is that by eliminating the broker’s commission we can set the price lower and attract more buyers. We could use advice about how to avoid wasting our time with people who are just joyriding and can’t really afford to buy or don’t even intend to. Is there anything we can do? — P. I., edithlank@aol.com
A: You can eliminate the broker, but you can’t eliminate the broker’s work, and someone will have to do it.
Start by putting the words “by appointment only” on your lawn sign and in your ads. That way, you can ask people a few questions over the phone before they come to the house. You will also have their phone number that way. You can call back to confirm, which offers a bit of extra identification for safety’s sake.
If people come to the door, ask them to phone for a later appointment. If they’re real prospects, a little anticipation won’t hurt. It also gives you time to tidy the house, and you may want to arrange for another adult to be with you when strangers enter.
It helps to screen people if you ask whether they are presently renting or have a house to sell first, where they work, etc. Brokers learn to ask about income and credit standing almost immediately. Try to do so yourself in a businesslike matter-of-fact way. Make an effort to ask the same questions of each caller and treat them in the same fashion to avoid any violation of fair housing laws.
Homeowners selling on their own are sometimes the target of people who don’t even ask, “How many bedrooms?” — just “Will you take back financing? Hold the mortgage yoursel0f with no down payment?” You don’t want a deal like that, particularly with someone who can’t qualify for a bank mortgage.
Don’t underestimate sightseers, though. The more people who see your house, the more likely you are to get a purchase offer. Welcome your neighbors — for all you know, they could have relatives who want to live nearby.
Remember that where the sale of real estate is concerned, oral agreements are not binding. The best answer for some questions is a noncommittal “We’ll be happy to consider any written offer.”
Analyze a prospective buyer’s credit, debts and income before you accept a purchase offer. Otherwise you might tie your property up with a contract that goes nowhere after the buyer applies for a mortgage loan. And without a broker, plan to lean more heavily than usual on your own lawyer.
Q: We have a reverse mortgage. Should we decide to downsize, could we apply for another reverse mortgage? (Of course, the first one would be paid off from the sale of the original house.) If so, how would that work? — L. C., askedith.com
A: As you realize, you must pay off the accumulated reverse mortgage when you move out of your home. If the house is not worth enough to cover the debt, the Federal Housing Association insurance you’ve been carrying will make up the shortfall. But if the house is still worth more than you owe, you’ll end up with some cash.
Yes, you could then use a reverse mortgage to buy your next home. The down payment requirements are pretty high, but you might have that from the sale of your present home. You could then live in your downsized home without making mortgage payments.