Magic Bullets Kill Sacred Cows by Dan Auito - HTML preview

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Table of Contents

Magic Bullets Kill Sacred Cows ..........................................................................3
Lesson #1: They Exist When You Believe They Do. Belief Is Bullet #1! ....6
The Legal Stuff...............................................................................................7
Your Lawyer Is Your First Material Magic Bullet. ...................................9
So, Lesson # 2: Remove As Much Fear As You Can From Your Buyer’s Mind! ............................................................................................................................10
Organized Effort Is Another Magic Bullet! .............................................11
Get Your Own Home Inspection ..............................................................12
Hire Your Own Appraiser .........................................................................13
Purchase A Home Warranty .....................................................................16
“Warning You May Kill The Competition.” ...........................................22
The Facts And Features Sheets......................................................................29
Special Features...........................................................................................29
Let The Negotiations Begin! ......................................................................35
Psychology 101: Reading Your Buyers’ Mind ........................................36
Magic Bullet: When You Seek To Give People Power That You Have, They Will Actively Try To Help You Give It To Them. ..................................36
Potential Options.........................................................................................36
Screening Your Potential Buyers ..............................................................39
The Magical Pre-Qualification Script ...........................................................45
Empathy Is Your Magic Bullet!.................................................................45
Final Preparations For Open House Day!.....................................................46
Open House Day!..........................................................................................47
Contingencies: .............................................................................................50


Magic Bullets Kill Sacred Cows

Dear Reader:


Thank you for reading our special report. You may consider printing it


out to read at your leisure.

The overall flavor of this work is designed for those of us who have an
interest in real estate related materials. You are free to distribute this file
far and wide to those whom you feel would enjoy and benefit from
reading it.

Throughout the rest of this report we’ll be traveling at electrifying
speeds, so I encourage you to hold on tight. We will be traveling to all
places real estate related on the net while attempting to educate some
friends along the way.

I will be your driver, guide and concierge throughout our journey
together. Please feel free to wander off occasionally to see the sites on
your own when we arrive at various destinations that may be of interest
to you. I’ll be waiting for your return so please take as much time as you
like to fully investigate all that our journey together has to offer.


Oh my! Please excuse me once again; I seem to have an important
message coming over the console here. I hope you don’t mind but it has
come to my attention that we’ll be picking up one more passenger along
the way. It seems this person has an immediate need and that, my
friends, is our call to duty.

Is everyone ready?


Very well then, we’re off!



Please allow me to tell you a story while in route to pick up our fellow voyager. As you may have noticed, we begin our Journey here at the third crossroad of human evolution. We’ve already passed through the agricultural age of the 1800’s and our second revolutionary shift of mechanized mass production of the 1900’s is also behind us. Here then we begin our journey into the information age, the new millennium of the 2000s and beyond.

WWI, WWII and now WWW! We have ourselves a challenging road ahead, my friends, and we’re going to have to embrace Internet technology and learn how to operate and flourish within this new cyberspace economy while keeping our wits about us.

Look over there. Do you see that old world style company? Due to the loss of its control of proprietary information and systems, the ability to project great power and control are being lost at a most alarming rate.

For many, the World Wide Web is delivering devastating blows to those who seek to keep information and methods of operation private, while at the same time the net collects, integrates, connects, multiplies, stores and delivers that which was once private to millions with the click of a mouse.

Today, the true experts give control…they don’t horde it!

New shared know-how has emerged on the web. It is no longer necessary to pay 'experts' to interpret what should have always been easy for the rest of us to understand. All we need to do is ask…or look.

So there is a goldmine of information at our fingertips, but we still have a few minor problems to address before we head out in search of Internet gold. Our primary concern is how to find, organize and put into practical use our newfound ore. We’ll explore this in greater detail shortly, but first we must welcome our third and final guest. Let’s pull in and get acquainted, shall we?



Excuse me, friend, did you put a call into the cyber-help network?


Yes sir, I did. Are you the concierge?


Yes indeed, I am. Might I ask your name?


Certainly, my name is Fizbo but you can call me Fiz.


Hi Fiz. Won’t you get in? It would be my pleasure!


What’s all the to-do about Fiz? Sounds from your call to the cyber- help network like you have some concerns.

Well, I’ve been searching endlessly for answers to a few real estate questions and the subject just seems to overwhelm me at times. I’ve been reading, randomly surfing the Internet, gathering and asking questions, but nothing seems to make sense. I can’t get a straight answer from anyone and some folks have downright tried to take advantage of my situation.

That sounds like a real bummer Fiz. I think I have just the solution. Let’s get started, shall we?


I’m ready when you are.


All right, then, here’s the before take-off briefing. We’ll need to bring everyone up to speed so that we all function as a team.


Together Everyone Achieves More!

As you’ve probably noticed, we’re driving a sleek Dell 8300 with a 2.6 gig power plant today and we’ve got her turbo charged with a web-linked cable modem as well. Now, Fiz, we’ll be traveling at astonishing speeds to our destinations on the information highway so it’s critical that we know where we’re going and how we’re going to get there.

Our three main expressways are, and There are some side streets, but these will do for today. Other than that, Fiz, just remember, good manners are your best insurance policy in cyberspace.

With that said, Fiz, where would you like to go today?




Well, without the power of focus, all the latest equipment in the world won’t help us to get anywhere fast.

Well Fig, to be quite honest, I spoke with Cyber-help guest relations and they said that you would know what to do.
Oh, you ordered the guided tour package, didn’t you? Very well then, according to your profile here, it says you’re going to be selling a home soon and you want to do this without the help of 20th century middlemen…on other words, you'd like to sell 'by owner'.

Today we find ourselves flush with the capacity to link to all sources of intelligence and resources across the globe and beyond. No one owns the Internet; therefore no one can withhold the flow of information to those who seek it, even though some may still try. In 1950, half the population were renting, today three quarters of the population own their own homes. One in five sellers sold their own homes last year, closer to one in four will do it this year and that number is sure to grow with 17,280 homes sold every day of the year as we speak.

Now close your eyes, Fiz, and hold out your hand.


O.K. Fiz, you can open them now.


But, there’s nothing here.

Fiz, I’ve just given you a fist full of Magic Bullets. Now you can’t see them but you can use them when you need to. These bullets have been carefully crafted and have been proven to work for thousands of years, so do not discount them due to your inability to see their material form. Many people will tell you that they don’t exist and here is your first lesson:

Lesson #1: They exist when you believe they do. Belief is bullet #1!

How do I shoot them?


Well Fiz, you’ll need to craft your own firearm to actually use these bullets with any great success.


But I can’t even see them, how in the world…?


Attitude, Fiz! The weapon, which fires Magic Bullets, is a positive mental attitude.


How do I get that?

If you will mix faith, hope and desire with hard work and enthusiasm, I believe you will find the result most accurate and accommodating. Now let’s move on. Remember we must remain focused.
I’ll be introducing you to some new friends along the way here in our journey, so if everyone’s ready? We’ll start off by removing the number # 1 fear in most people’s minds when it comes to doing it yourself…that being the legal side of the process.

The Legal Stuff

You, as a seller of your own personal as well as real property, are granted by our constitution the right to sell barter, trade or otherwise dispose of your property in any way you see fit, so long as it doesn’t interfere with the rights of others or cause them harm. What this really says is that you could literally write a contract on a napkin and, if all elements are present and in writing, a court of law will enforce it if necessary.

These are the things that must be present or considered in order for your napkin to stand up in court:

#1 Offer and acceptance: You must have a written agreement between seller and purchaser in which the purchaser agrees to buy certain real estate and the seller agrees to sell upon terms of agreement. This is the basis of your contract for sale. This must be in writing to satisfy the law of “The Statute of Frauds.” That law says oral contracts for real estate are unenforceable. However, you could use a crayon and a napkin and be in compliance with rule #1. (Indelible writing)

# 2 Seal or Consideration: A person’s signature alone in this case does satisfy the requirement of promising to go through with the deal as agreed but almost all sellers rely on a cold, hard earnest money deposit to insure the other party is in fact earnest. I would accept one percent of the value of the property in the form of an earnest money check as a fair amount of consideration to further deal with a well-qualified party at hand. This check is often written in the name of a third “neutral” party to hold in trust, i.e.…lawyer, title officer or other official party.

#3 Capacities of the parties: The person you are contracting with must have contractual capacity. People without contractual capacity include minors, mentally incompetents, insane persons, people who are under the influence of drugs or alcohol, corporate officers unauthorized to contract and so forth. In most cases, including the elderly, if someone is found to be unable to comprehend the effects of their actions, a court will rule the contract null and void or unenforceable. Foreigners from other nations have full contractual authority, but you cannot sell to the enemy by federal law.
#4 Reality of Consent: A contract must be free of mistakes, misrepresentation, fraud, duress and undue influence. The consent must be real; a failure to achieve reality of consent may occur because of mistakes, misrepresentation or fraud. In other words, you can’t legally describe one property as the one they're buying and then, when the deal is done, they find that the actual property purchased is the shack next door.

#5 Legality of the object: The object of the contract must be legal. If the purpose violates the constitution, a statute or federal treaty or law, the contract is void. In other words, if you contract to buy illicit drugs and the other party doesn’t deliver, don’t expect the courts to uphold your agreement.

OK, so what does all this mean in layman’s terms? Whatever price and terms you agree upon, get it in writing. A signature promising to do the deal is good enough but you would be wise if you ask for something of value that they will lose if they break their promise for no good reason. If the person you're dealing with doesn’t understand what they're doing, stop and get a court appointed guardian or authorized representative who can act in their behalf and finally, you must have the right or authorization to sell that which you are contracting on.

Did you get all that, Fiz? See that’s not so hard, is it? Find a reasonable person, who wants to buy your house. Don’t lie and get the details in writing backed by their signature with a good faith deposit. Now you can iron out any contingencies or details that need to be taken care of to get the job done!

By the way, for all the reasons stated above, I cannot emphasize enough how extremely important it is to write the following words on every contract you ever sign:

This entire agreement is subject to my attorney’s approval.


Don’t alter the above sentence in any way. If it needs altering, your attorney will tell you so!


Now go find a good real estate attorney in your state and they will give you all the paperwork you need according to your states laws. These often include:


• A sales contract


• An earnest money agreement

• A property transfer disclosure, lead paint disclosure, predator disclosures (Megan’s’ Law), etc…
• A bill of sale for personal property which will convey washers, dryers, refrigerators, etc…

They also will review all the details while consulting with you all the way up to, and including accompanying you to the closing, usually for a $500- $750 flat fee. Your lawyer is your first material Magic Bullet.


They also assist you in becoming “bulletproof” yourself.


Finding an attorney

o (Find a real estate attorney)
o (Questions answered free)
o You will grow to love this woman; it’s time to meet her.

Below are some additional resources for you to investigate. Use the providers who seem to effectively remove your own fear.

Contracts/Forms Suppliers

o (free fill able contracts) Excellent! o follow finance to real estate) (free contracts)
o mortgage
o (sample forms/ lawyer search) o (ditto)
o (free tenant move in checklist)

Phase 1 completed : You know you’ll be using an attorney to assist you so you are no longer alone. You now have the law on your side and a professional who can practice it to your advantage.

We have much to do, Fiz. How you feeling so far? I’m with you, what am I going to do next?

Well Fiz, as you can see my first task with you was to remove your fear, so I think that is what we must address when we ask others to buy our homes. In reality, when we’re done here they’ll more likely be begging you to sell it to them.

That brings me to a point that few realize, Fiz. Sure you’re selling land and all the things that are affixed to it, which includes a bundle of rights, too! That’s a general definition of real property but what you’re really doing is attempting to transfer the power that, that object represents. People often are searching for a trouble-free, pleasurable, aesthetically pleasing, creature comfortable, needs fulfilling, safe, secure, affordable and convenient place to live. This, my friend, is what sells homes for top dollar in almost all cases. It works for rentals, too! Until you address those concerns one by one, you’re going to have unresolved fears, which will make your job much harder than it ever needs to be.

So, Lesson # 2: Remove as much fear as you can from your buyer’s mind!

How do I do that?

Well, you already have the proper paperwork and an attorney who will ensure everyone is treated fairly according to the real estate laws of your state so that alone relieves the buyers of the thought of how the details of paperwork will be handled. It is your job to prove to them that you can be trusted to transfer your power to them effectively.

You may as well round up as many of the following documents as you can, as they will be used in many ways to help you in marketing your home and effectively transferring power over it.

For now, let’s take a look at the list:

When you begin the task of collecting as many of the documents below as you can, it pays to contact a local title company or better yet the one who is named on your title policy first to get


a property profile or ownership and encumbrance report (O&E) A title company can provide copies of warrantee deeds, mortgage notes, alert you to any

assessments, mechanics liens or unpaid taxes, they may also have surveys & plot plans revealing encroachments and so forth, this property profile in effect helps to give your property’s legal title status a clean bill of health, get one if you can and

add it to the list below. Deals fall through when defects (clouds) on the title aren’t cleared up early. Get your attorney early to get this done.


Organized Effort is Another Magic Bullet!

• The appraisal
• The inspection report
• The home warranty
• Sales contracts
• Property disclosure sheets
• Any preliminary title review documents (Attorney)
• Copy of your survey
• Current title policy
• A copy of your warranty deed
• Your latest real estate tax statement
• 1 year’s worth of utility bills
• Copies of any deed restrictions, homeowner’s association rules plus all home and appliance warranties.
• A pest inspection report
• Any permits pulled for modifications done
• Well flow and septic percolation tests, if applicable

By providing information sheets that give complete details of the facts and features of your home and including a digital photo of the house, you help them remember yours.

Appraisal? Hey, I thought the buyers paid for that and their lender called an approved appraiser from their own list.

Relax Fiz, you’re right, normally the buyer pays and the lender calls for and gets the report. You’re going to use this twist to great advantage, so please standby while we go to item number two on our list. That’s the home inspection and you’re paying for that, too!



Don’t worry Fiz; you’re going to get it all back in the form of a higher sales price. Here’s how we use these tools to do that.

As we said from the beginning, we are going to remove as much fear from the buyers as we can! By getting our own inspection done before we show the home, we have time to find and correct any and all defects that we should have known about beforehand. I see it all the time. When buyers get their own inspector they find things that you should have found and other things that you had no idea were wrong. In some cases, the codes have changed so what was once acceptable is now a major issue. With this kind of ammunition the buyers more often than not are able to negotiate strongly to get price concessions from you and their fear has been justified! You can’t let that happen. That’s a loss of power for both of you.

By getting your own inspection first, everything will be found, fixed and brought up to code long before the buyers start looking. Now you won’t delay your closing date either, waiting to get those things fixed.

Once you have the report, fix what was found wrong and keep the receipts with the bound report. You’ll be showing it to the perspective buyers. Ideally, you want them to accept your report at face value; however, if the buyers still have fear then you should encourage them to call the inspector whose name is on the report.


Note: Their lender may also have an approved inspector of their own but odds are good that he won’t find anything major wrong, so that’s $250-$300 well spent by you!

Get Your Own Home Inspection


You may consider some of these in your travels my friend:


Inspection resources

o (free inspection outline)
o (find a home inspector)
o (1000’s of inspectors) o (ditto)
o (ask a home inspector) o (ditto)

Having the home inspection done before the appraiser is ever called can help you obtain a higher appraisal. As an appraisal assistant, I believe I am correct in this assumption. You see, you have also relieved the fear in the appraiser’s mind as well, and he or she won’t be holding back escrowed funds from your valuations for mandatory repairs that must be made before the appraisal will fly through the lender's underwriting department.

Now we haven’t called for the appraisal yet because we want to find and fix all defects first for the reasons stated above. While you are accompanying the home inspector on his inspection, you should be taking notes as well. As you go along, you will also see things that need cleaning, oiling, tightening, adjusting, replacing and so forth. Just jot them down on your own pad while you stay close to the inspector, paying close attention to his recommendations and insights along the way. Between his list and your own, you will be well on your way to eliminating those unforeseen problems that aggravate us all. Don’t forget to stop by Frank’s place at to print a free copy of a great inspection outline to use during your own walk around.

I will give you a few tips of my own on how to prepare your home completely inside and out to present the absolute best possible appeal but, as you are seeing, it makes no sense to do something twice when you can easily go direct to a source who will give you excellent advice for free.

Now off you go Fiz, to Also pay attention to Audrie’s additional resources in the left side bar. Many sites have this information in their resources. Just look under “resources,” you’re sure to find it!

Home Improvement

o (plan your work)
o (remodel it)
o (super site)
o (plumbing repair forum)
o (the world of paint) o touches)

Hire Your Own Appraiser

All right, assuming you have an attorney picked out, your home inspected, repaired and prepared to show its best, it's time to call the appraiser. You want to, in effect, sell the home's finer points to the appraiser, let them know of the upgrades and special features of the home, the new schools, recreational facilities and so forth. Most appraisers are mathematicians and number-crunching geniuses. Don’t expect them to spend all day jabbering with you - they take their jobs seriously and don’t miss much, so don’t patronize them or you could do more harm than good! Give them the facts and get out of the way.

There are many ways and places to collect information that will help you to determine a most probable selling price. One of the most important things to remember is that you actually need to do this. Don't guess about the correct asking price for your home. You'd be surprised at how many FSBOs do, though. As a result, they either overprice their homes (the single most common error) and don't sell quickly - if at all - as a result…or underprice it and lose money that would be in their pockets had they done a little research.

One way to start is to begin talking to your neighbors; especially those who are in the process of selling themselves (go to the open houses listed in your local papers). It’s a fact that these other sellers may be your competition. But you can take advantage of their pricing if they are using a realtor. By pricing your home slightly under their asking price - remember that they have to pay a realtor and you don't - your home looks like a great buy in comparison to theirs. On the other hand, if neighbors are selling FSBO, don't automatically take their price as a sound comparison. If they haven't done their research, they have likely priced their home incorrectly.

And, even though you are selling FSBO, realtors will give you a comparative market analysis (CMA) for free but will be checking in quite regularly to see if you’re ready to give in to their way of thinking. Again, I’ll be giving you more ways to arrive at value, so call the appraiser now as he or she will provide you with the reality to set an appropriate asking price. They create a benchmark from which to begin evaluating the different market factors.

For residential property, an appraiser follows this general line of thought:

The comparable approach is most often used in single-family home valuation. The appraiser takes three or more houses that are similar in style/design, size, quality, age and neighborhood, preferably within a mile of each other that have sold within the last 6 months to 1 year. They then make adjustments for better or worse features to the comparables to arrive at a probable sales price of the house that is being appraised. This approach is based on the principle of substitution, which says no one would pay more for something that they could get for a lesser amount somewhere else (within a mile or so).
Appraisals generally run from $300-$500 for today’s standard 2,200 sq. ft. home. Now odds are pretty good that your buyers are going to have their lender already picked out by the time they find you and it’s also likely that their lender will have to call for another appraisal from an approved appraiser on their list. This is fine because you used your appraisal to convince your buyers that your house was fairly priced and your appraisal helped to remove their fear of paying too much. It also helped you to squelch bargain hunter’s comments that you were asking too much. It will pay for itself, believe me! And if you were happy with your appraiser’s opinion of value, you may consider letting the lender’s appraiser have a copy, as he or she will most likely use the same comparables. You’ve made it easy for them!


Special note : It helps to have an “above average” appraiser's opinion of value. Appraisers don’t let on to this, but the word is “puff” They may even deny that it exists. This puff, which should be called poof, is an amount usually about 6% above the actual opinion of value. Sellers on average tack on 6-10% to the actual price that they expect

to get as bargain margin.

Again this is added with the expectation that it will be negotiated away by the buyers (6% is the average), thus allowing them to feel as though they got a bargain. Nobody admits it exists, but you may mention this to your own appraiser, letting him or her know that it will be bargained away. It’s controversial. However you do end up selling only for what buyers will pay and that could very well be a newly established higher market price.

Appraisal Resources

o (click on “ORG”)
o (find an appraiser)
o (ditto)
o (ask an appraiser) o (general valuations)
o (comparable data) o (your local competition displayed)

Purchase a Home Warranty

We have one last key to the puzzle of fear removal and then you can prepare to advertise this properly priced, absolutely flawless home to the world. The last fear removal tool is a home warranty - and, yes, you'll pay for this, too. They run about $400 for a one-year policy and protect you as well as transferring to the new owners when the sale closes.

Home Warranty Resources (find a good warranty company) (home warranties)

You purchase the home warranty last as you now have proof that the systems that will be protected under the agreement have been inspected and have no existing defects that would void the coverage.

Time to get perspective, Fiz!


So far we have bought (approximate figures):

1. An attorney: $750
2. A home inspection: $300
3. An appraisal: $400
4. A home warranty: $400

Total spent: $1850


Ok, so just how will this save you money?

Let’s first take something you may not have considered into our overall plan to get top dollar. Not many people remove this much fear in the process of selling their home. Many sellers are completely unprepared for what is in store for them. On top of this, 3 out of 4 sellers (your supposed competition) are using realtors who on average charge a 6% commission for what you yourself are doing in far superior ways.

Using the median average home sale price of $183,500 as of 2004 census statistics multiplied by 6%, the median average real estate commission would be $11,010. Subtract your $1,850 from that and you are left with a savings of $9,160 over having used a real estate broker or their agents.

Now the killer here is that your supposed competition hasn’t provided a single solitary fear removal tool.

You have provided them all, and your buyer's lender may accept your appraisal, home inspection and certainly the home warranty. Hence, you may have actually saved the buyers another $1,100 for those items themselves, not to mention the time!

You are now in a superior position of power!

And this does not take into consideration that homes prepared like yours are what generally tend to drive prices higher, so you may be setting a new benchmark (higher price) in your neighborhood due to the way you have prepared and marketed your home.

Home values rise, as you well know, but did you ever stop to think about who makes them go higher? People like you and Uncle Sam’s inflation policies do! It is not out of the question that you could move up your neighborhood's overall values by, say, a modest 3% or $5,505 as a result of providing all this value.

Add the $5,505 to your $9,160 and your real savings may just be $14,665 on your average home sale of $183,500. That’s a 12.5% overall gain, not a 6% loss paid in the form of a commission.

Now add those together and you’ve effectively repositioned yourself 18.5 % better than most traditional sellers will end up
This is not theory, my friend; I do it and sell for $10,000 more than similar homes. This astounds people. You see it, plan for it and achieve it!

I hope you can see how setting these dominos up like we have so far can really pay off. Are we having fun yet, Fiz?


Now there are cases when a paid professional will get the business. Here are some prime examples:

1. The owner is out of the area and cannot do it personally.
2. The owner is being relocated and their company IS paying all costs.
3. The owners are uncomfortable with the process involved with showing, contracts, etc.
4. The owners make tons of money and their time is more valuable than the commission.
5. The owners don’t have the time to do it themselves.


Note: The average full service real estate commission is now 5.12% (this is not set in stone - it’s just an average). And, of the 40% of sellers who asked for a lower commission rate, 74% were successful. Learn to negotiate by using the ASK principle. If you don’t ask, you won’t receive!

Those are good reasons to give it to a pro. All I’m saying is it pays to take matters into your own hands if you’re in a position to do so.


So let’s take a time out here and listen in on some real estate brokers/agents talking about what is going on in the industry.


Original Excerpts
Steven writes:
Well, I know by all of you out there that this was happening across the country, and now it's here in RI.
I spoke to 2 FSBOs today. Both told me they were listing their properties on the MLS for $300.
Real estate agent does NOTHING.

Now I know how some of you are feeling. This goes against everything a Professional Realtor stands for and the local MLSs should NOT allow this to take place.

So what's happening out there in some of your areas? Have any local MLSs stopped this???
Alice comments:

Steve, this is allowed in our MLS PLUS they advertise it on LARGE SIGN BOARDS! (Yes, I am yelling) go to, check that out. We also have a place where they can buy a spot on MLS for a flat fee. Feel the rope tightening????? Alice

Mark responds: This is happening in my area as well. Whenever times are good for sellers you will see this sort of thing. Historically, none of these entities last because ultimately these entities don't price at a level to maintain themselves as a long term going concern. These entities jump in to soak up what economists would call "excess profits". They come and then they go. It's NO big deal! (Fiz, do you care about entities?)

There's a bigger issue here. That issue is how do you think about those entities and how effective are you in communicating that thinking to consumers of your services. (Fear, Fiz)

FSBOs can put a sign up and FSBOs can advertise in the local newspapers. FSBOs can put up their property on a web site. FSBOs can send out post cards to the neighborhood and all the people they know advertising their property. Now FSBOs can get into MLS and the web sites that are fed by MLS. FSBOs have almost all the tools that highly trained REALTORS have. So what! (Did you hear that Fiz?)

This weekend Home Depot will be packed with salespeople and accountants and meat cutters and housewives and the full assortment of people who don't know what they are doing; all buying tools and supplies to work on their properties. I'll be in the tile department buying some tile with a long time friend, a guy who started setting tile 40 years ago at his father's knee-- and his father learned tile setting from HIS father. All of the tools of the trade, beside a couple of diamond saws, fit in a five-gallon bucket. At the same time we are there, there will certainly be one or more young gals or guys also buying tile and mastic. Who do you think will have the better result in the shorter period of time? Who do you think will better handle the problems that inevitably arise in a tile setting job? Who would YOU rather have setting your tiles if you were interested in getting the best long-term result? (6% x $183,500 = $11,010 = very expensive tile guy)

A measuring tape, a level, a chalk box, a trowel, some mastic and some tiles; sounds simple doesn't it? Who would YOU rather have on the job: a highly skilled craftsman with 40 years experience or the
neighbor college kid-- even the one who IS on the honor roll?
Access to the tools of the trade is important but not as important as the operator of those tools.
(As you wish, one skilled operator’s manual coming up, Fiz.)

What is important to getting a property sold near or at the top of the
market values range are not the tools that are used but the knowledge,
skill, and experience of the person USING those tools. THAT is the
answer to this recurring but fleeting occurrence in our business.

(Use the knowledge, skill and experience of the combined world as provided on the web, Fiz!)

Mark is absolutely right! What this means is that either you do this right or don’t do it at all. You do have a choice, but I suggest we move along because I intend on giving you full command of the controls by the time we’re done flying.

You see Fiz; this is really a battle for control. If you don’t control your own destiny, someone else will, at your expense!

The following are not expenses. They are the price you pay to control your own destiny and, as you have seen, you will be well compensated for using these tools effectively.

STEP 1. An attorney: $750 STEP 2. A home inspection: $300 STEP 3. An appraisal: $400 STEP 4. A home warranty: $400

Total= $1,850


Again we are going to recap what we have done and why we are doing it and then we will proceed.

1. You have an attorney to put the law on your side, to remove any paperwork fear and to have a neutral third party to hold earnest money deposits. The attorney will provide all state forms required and answer everyone’s legal needs throughout the sales process and attend the closing to ensure proper transfer of powers.

Hint: They are also wonderful intermediaries when things heat up; let the buyers call them.

2. You have your own home inspection done to help you find and fix every potential problem that could cost you time and money if not found beforehand by you, and also to help you to better see what to clean, oil, tighten, adjust or replace on your own. The report acts to relieve fear of the unknown in the buyer’s mind and prevents any financing snafus due to lender-required repairs.

3. You have your own appraisal done to get a very accurate selling price. This relieves the buyer’s fear that they are paying too much or that the home will not appraise for financing. It also slams the door shut on bargain hunter’s tactics and ensures that no appraisal-based defects, such as code violations, will delay the sale.

4. Your home warranty protects you and the buyer's interests and confirms your position that there is nothing wrong with the house. In addition, if something should go wrong before, during or after the sale, the buyers are covered for an entire year.

Let’s move on.


Here is another point in the selling of a home that strikes fear in the minds of those who do not do it everyday. That is who pays for what closing costs?

Relax, Fiz, you’re going to look like the good guy here because you bought all those goodies above. This makes the buyers easier to deal with when it comes to negotiating who pays for what. They already see you as generous and they in turn should accept what you have decided beforehand.

As the seller, your costs are generally much lower than the buyers as you are generally not paying for:

• Loan application fees
• Credit report fees
• Loan origination fees
• Lender’s documentation and preparation fees
• Prepaid interest
• Insurance escrows and reserves for taxes
• A lender’s insurance title policy premium
• Property transfer taxes, etc…

The above fees, that often equal 2.5% -3% (variable) of the loan amount itself before any required down payments, really put the burden on the buyer’s side of the closing statement.

You as the sellers may reasonably expect to pay some of these:

• Real estate sales commission, not happening! (biggest expense)
• Your existing mortgage balance to your original lender
• Recording fee to record the mortgage payoff above and clear the title
• Prorated taxes to the buyers from the first of the year to closing date
• Half of the traditional closing costs
• Tax service fees
• Owner’s title insurance policy
• Property survey
• Miscellaneous recording fees
• Pest, radon, lead, asbestos, water, roof, mechanicals and local inspection fees
• Other fees with regard to what you’re selling and in what state or town
• All expenses of the FSBO, marketing, signage, ads, Internet listing fees, etc…

Now if you have chosen to control your own destiny, then you may also be paying for these secret weapons:

• An attorney: $750
• A home inspection: $300
•An appraisal: $400
• A home warranty: $400



“Warning you may kill the competition.”

Your attorney is going to explain it all. You should sit down when you go to get your forms from the attorney and decide shortly thereafter what you are willing to pay for and what you expect the buyers to pay.

Many items fall under the guise of traditional charges and many can also be split. As a baseline under this outline here, you can figure about 1% of your sales price for closing costs. On a $200,000 home that would be about $2000 in closing costs (not including your secret weapons), some higher, some lower. These are deducted out of your sales proceeds - the closing check!
Since I am not in a position to know your state’s particular customs and the specific details of your transaction, it is an absolute requirement that you consult with your attorney, title officer, lenders and especially the buyers involved with the transaction to ensure you and everyone else are properly advised and prepared for your settlement day!

If you have your attorney, like a smart Fiz, then you should be well prepared to handle the closing details that are required in every deal. By getting involved in the details in this active way, you will gain a much better understanding of the process and learn far more than 3 out of 4 sellers do in most cases. (You will become a smarter buyer, too!)

Just in case you need further clarification on the above points made, just write your questions down, then take a ride on the highway of global knowledge to get clarity before moving on…

Financial Resources

o (mortgage discussion)
o (closing cost calculators) o (financial/loans)
o (another)
o (another)
o (another)
o (another)
o (another)
o (today’s rates and more)
o (calculator) Excellent! o and more)
o (calculators and relocation information)
o“4 free” finance books) PDF

Moving right along, let’s look at our list again:

• The appraisal
• The inspection report
• The home warranty
• Sales contracts
• Property disclosure sheets
• Copy of your survey
• Current title policy
• A copy of your warranty deed
• Your latest real estate tax statement
• 1-year worth of utility bills
• Copies of any deed restrictions, homeowner’s association rules plus all home and appliance warranties.
• A pest inspection report
• Any permits pulled for modifications done
• Well flow and septic percolation tests, if applicable

Also, by providing information sheets that give complete details of the facts and features of your home and including a digital photo of the house, you help them remember yours.

And, since we're using the Internet as a resource, you can create an online 'information sheet' that allows you to provide not only complete details about your home, but lots of photos as well, both inside and out. You can point to this web page from all your advertising. One of the many benefits of this is that you can eliminate curiosity seekers or people for whom your home is not perfect.

The folks at can create a property website from your details and photos, host it for you, and list your home on over 100 FSBO sites. Check them out!

* * * * * * * * * * * * * * * *

At this point we have the big things pretty much out of the way - you have an attorney, the home inspection, the appraisal, the home warranty, and your sales contracts along with what you are willing to pay towards closing costs.

The rest of these documents below will seal your case and blow fear clear off the table and out the door. All of these documents will be laid out in order on a display table before we are done and the prospective buyers will be able to review every detail that they need to eliminate any questions that lead to fear, which ultimately kills deals. Let’s get the rest of these documents below and effectively transfer the power of ownership to those new owners.

Fill out your property disclosure form: This simply outlines all the things that make up the home, its systems and the land that it rests upon. Your job is to fill in the blanks, telling the truth about everything a new owner should know, including any material defects that you know of that have existed or still do. Your attorney will give you your state’s outline and you simply answer the questions as best you can. It’s not pass or fail. Just be honest and you’re done. Now put that one in the pile of things we have completed.

You may look at this one for ideas (Scroll down)

Copy of your survey: The seller almost always pays for this; you should have a copy with your original closing documents from when you bought the home. If not, the county tax records office usually has it on file. If you cannot find it or you have added additions or outbuildings, a swimming pool, fencing etc., you will need to get a new survey ordered from a local surveyor’s office. Check the local phone book or get a referral to a surveyor in your area at - you need this document!

Current title policy: This document is part of your original closing paperwork. You will need this to prove that you are protected against title defects and claims against your ownership or title to the property. It’s just a form of proof (insurance policy) that you own what you’re selling and are also protected against claims. You will use it to get a very accurate legal description for when we do your facts and features sheets for the big sales event!

Hint: Have your attorney perform a preliminary review of title and get a written statement that the title has been reviewed and is in order.

Copy of your warranty deed: Keep your original safe! This too can be found in your original closing documents. It simply states that you are the owner of the property and all rights associated with that property as well. This is a recorded document and can also be found in public records or at the title company. Provide a display copy for your perspective buyer’s perusal.

Latest tax statement: This shows what your property is assessed at for tax purposes and what your annual tax is on the property. It also is another form of proof that you own the property. This helps buyers to begin to figure what their tax liability will be. The mill rate multiplied by the sale price determines the annual tax bill due as a result of the sale. You can get all documentation on file for your home free by visiting your local tax office.
One year worth of utility bills: This lessens the fear of the unknown by showing people what they can expect. This allows them to plan, compare, evaluate and further understand the actual costs for water, sewer, trash, electric, gas, oil, basic cable rates, etc.


Bonus points: If you make a contact list for all the providers above, your buyers will not only see that as a time-saving value-added document, but see you as a well-prepared seller whom they can trust. It costs you zero to add this value.

Pest inspection reports and city approvals: Termite reports are mandatory in many southern states, while other states require the fire marshal to approve of smoke detectors and other safety issues they may deem of importance. Get these reports and approvals beforehand so you can display them proudly!

Energy ratings and appliance documents: Many lenders today base loan rates on a home's energy rating, as it takes into account the quality of the home's construction and materials used. [5 star plus gets attention!]

You may consider getting your home rated as another plus to buyers in addition to providing any instruction, operating or parts manuals; including warranties with receipts for every appliance that will remain with the home e.g. refrigerator, stove, dishwasher, washer/dryer, garage door opener w/ remotes, well and pool pumps, sprinkler systems and timers, electronic thermostats, heating and air conditioners, dehumidifiers, water softeners, Jet tubs, disposals, faucets, security systems etc. With every document you find, you stack the deck in your favor!

Copies of rules and regulations: Gather all documents that explain any deed restrictions, association rules and regulations, annual or monthly dues or fees plus approvals required to lease or sell for condos and town-homes, etc.

Information sheets are your facts and features sheets: Using all the above items plus our inspection reports and appraisal combined with the following information that I’m about to give you, we are going to now build a facts and features sheet that will blow your buyers away! We will leave nothing to chance - we plan, orchestrate, deliver and win.

As you can see, the above list attempts to leave no stone unturned and, as a result of being thorough in gathering and doing the things we have discussed up until now, your job from here on out is going to be relatively easy. You may even have fun! Can you feel the power building yet, Fiz? You’re creating a tidal wave of benefits that will flow to the right buyer in the market who finds your home first. (Only pre-approved buyers need apply)


Note: Real estate agents when talking to sellers about their home will most often refer to it as a house to begin to condition them to emotionally detach themselves from the object. When they’re talking to buyers it becomes a home. You need to get this mindset, it’s an emotional point and emotion is what sells everything in this world.

What this means is that you must detach yourself emotionally from this home that you will be leaving while at the same time presenting it to the buyers in a warm light that says this is a wonderful HOME! We are sure this wonderful home will bring you much comfort, joy, happiness, security and wealth. Get this right! People want to see themselves living in this home - they really don’t want to hear your life story (sorry).

Your job now is to put feeling into your advertising. You have already removed the fear so now we focus on all the benefits, prestige, security and happiness that come with buying this home.

Earlier in our travels I said I would be giving you some spruce up tips of my own. Here is where we need to go back over the entire home's cosmetic checklist to insure perfection.

We looked at the following resources:


Home Improvement

o (plan your work)
o (remodel it)
o (super site)
o (plumbing repair forum)
o (the world of paint)

The sites above showed us how to find, fix/repair and evaluate which improvements to make regarding your homes overall appearance. The websites you’ll soon be getting to list your home for free are absolutely loaded with tips to fine-tune all sensual elements of your home to obtain maximum appeal. I’ll try not to duplicate those efforts.

Three more magic bullets coming at you:

Your facts and features sheets
Your advertising campaign and showing instructions
Closing techniques to get you on your way

In addition to all the lists of what to look for and how to prepare for the sale, I will add the following insights based on my experience. The other sites may differ in some ways.

Curb appeal…you have 15 seconds!


That’s it, Fiz.

You could have done everything right, but the appearance from the street often sends people on their way without even stepping up to your door. Your advertising may have made them envision something completely different from what actually exists. We will ensure you do this right by having you write your advertising after you fill out your facts and features sheet. This way you will accurately describe and telegraph exactly what you’re offering directly to you’re target audience. You won’t waste your time or the prospective buyer's resulting from poor communications.

We also gathered all those documents first so that you can now use them to pull all the information that you’ll need to write a most excellent ad.

OK, Fiz, assuming you have or soon will have new paint, carpet, wood, tile, or vinyl in neutral earth tone colors where needed, everything repaired or replaced including those old toilet seats, the interior surfaces of the home so clean you would eat off them, the rooms so clutter free you could play racquetball, the windows so clear birds fly into them, the yard so manicured you could spot a bottle cap from fifty feet away, all your documents collected and ready to access like an IRS auditor on the hunt for a tax dodging drug lord, I believe we are ready to create your facts and features sheets.

The Facts and Features Sheets (The more you tell, the more you sell)

Get yourself a note pad and answer the following questions regarding your home:


SPECIAL FEATURES Again we’re using all your previously gathered documents to get this information Plus some secret weapons, shush!

1. What special features does this property have? Gourmet kitchen with spectacular mountain view, garden tub, home office, hardwood floors, tile throughout, in ground pool, game room, new roof, appliances, carpet and paint, extra storage, sunk-in living room, fireplace, fruit trees, circle drive, fenced yard. What is special about this property? Write it down. Why did you buy it? What did you like? (I would go look at a house like the one described above, wouldn’t you?)

2. Include all high energy efficiency rated materials related to the property, these can be gas appliances that stay, added insulation, a new hot water heater, new windows, solar energy panels, Heat pumps, even shade trees and five star energy rating certificates?

3. Describe everything that will remain with the property as part of the sale, such as draperies/window dressings, ceiling fans, chandeliers, vanities, shelving, appliances, garden equipment, sheds, garage door opener w/2 remotes, outdoor ornamentals. Also make it very clear what will not be included with the sale.

4. Write down area facts, such as parks and recreation areas, shopping centers, transportation lines, locations of schools, hospitals, churches, police and fire.

5. Fulfill physical, social, ego, spiritual and financial needs if you can.

If you’re not sure about some of the facts, amenities or information concerning your area, then go get it now, Fiz, so we can use it during the construction phase of this operation.

Research sites

o o
o o o o

(city and school facts and more) (community info)
(relocation guide to cities) (state facts & info)
(find people, places & things) (market conditions)

Now you will take your preliminary marketing list including all your legal paperwork plus your facts and features data sheets, and create the best property information worksheet that you can possibly design. Let’s build it!

Construction of the facts and features sheet


Write the following information down in order so that your ad begins to take shape.

Begin by taking plenty of digital color photos of the property inside and out on a sunny day and save them in a photo file on your computer to upload and print later.

1. Write the street address plus the legal description lot and block. (from your deed)


2. Write the number of bedrooms, bathrooms and garage size (1,2,3), carport.

3. Write the year built, style (i.e. Ranch, Contemporary, Colonial, Tudor, Victorian, Cape- Cod, Condo, 2-story etc.), size and square footage of living areas to include garage and porches from the appraisal and the lot size from your survey.

4. What type of foundation (slab, block, pilings) what type of construction (block, wood frame), type of siding, roof, heating and cooling.

5. List all of those special features: i.e. new kitchen, bath, carpet, tile, paint, fenced yard, circle drive, fruit trees, green house, swing set, appliances, home warranty, security system…all the good stuff!

6. List the amenities: public water and sewer, close to parks, schools, churches, shopping, transportation, police/fire, beaches, Wally World, deed restricted, homeowner’s association, gated community, waterfront, golf course, skiing…what else is appealing?

7. If your friendly appraiser gave you a high number of say $200,000 try to list your sales price just below that appraised value and say, “Selling below appraised value @ $199,888” and give your phone number to schedule appointments.

8. Make 100-150 Copies of your facts and features sheets, Disclosures, blank contracts and anything else you would like to provide, these go in the information tubes on your signs, are handed out on open house day, are mailed, posted and also distributed to neighbors at the very least.

9. Seriously consider posting all this information to the Internet as well. People seeing your website address (URL) in your newspaper ad can check online right away to see if your home is for them...and will look at your home before they look at your competition!

Audrie has a nice tool for creating your facts and features sheet. You may consider using hers or make your own using all the information you now have in front of you. Here’s Audrie’s tool:

Now is a good time to write your newspaper ad while the information is fresh in your head and right in front of you. Basically, you need to abbreviate what the information sheet just detailed into a classified ad. When you call the advertising department, they can help you fine-tune your ad. Internet ads and neighborhood flyers can be the entire facts and features sheet. You can include your URL in your newspaper ad and post it to local Internet bulletin boards as well.


Note: Kevin Wood of says by putting your price and location first, you tend to grab peoples attention that are looking in your price range and area.

When advertising in your local area papers you will want to set your open house dates in those ads. Usually Sat/Sun noon to 4pm works best. Some advocate from 1-2 pm to get everyone bidding against each other. You don’t need to do that. (No one will show up on Super Bowl Sunday either, so pay attention to any special events that will conflict with your open house dates)

Important : Always have at least two people present during an open house and put all valuables in a secure place. This


includes extra house keys on hooks, purses, firearms, daily planners, laptops, iPods, Game boys, etc. Most people are honest - let's keep them that way. Put all breakables away - children will come too! Candles make good scents; cookies and cider are a nice touch.

Soft music tuned low throughout the house is also nice. (Same station, please).

Final tips on the open house from me and we’ll move on. Have a neighbor or good friend walk through a couple of weeks in advance to tell you their honest opinion before you show your home. They should smell new carpet, paint, cookies, candles, soaps and perfumes - not Fido or Fifi.

When guests arrive greet them at the door, hand them the facts and features sheet, then invite them in to look around. Don’t hover over or follow prospective buyers around! Let them look on their own. If they have questions, they will ask!

Before your showing date arrives, make sure you have your yard signs with facts sheets inside a water resistant holder, all street corner signs and arrows posted at appropriate locations, intersections included. Flags and balloons also attract attention when they move (your call).

In the home, have your facts and features sheets, records (including disclosure sheets, warranties, and inspection reports), appraisal, home warranty brochures, blank contracts/offer sheets, earnest money agreements along with all the other information we have collected available and neatly displayed in the order we have gathered them. You’ll pick them out effortlessly when they inquire about certain things and have answers and the proof when your prospective buyer asks for it…and they will!

Again, any contract you sign, make sure that you put on it: Subject to our attorney’s approval. Cover yourself!

Preferably you should encourage buyers to use the contracts you provide. By telling them the contracts can be used as offer sheets and they are not binding until agreed upon and signed, you may save yourself the trouble of transcribing the offer onto a contract, as it’s already there!

I n a nutshell, prepare it, price it right, advertise it properly and protect your buyers’ interests with complete information, orderly forms and documentation, which removes all fear in the buyers mind. Now look for the perfect buyer and

make it easy for them to assume command and control of the power.

Now that you have your property immaculate, appraised, inspected, repaired, home warranted, advertised properly and priced right. You are in position to beat the daylights out of your supposed comparable competition. Because you’ve done your homework and because you’re NOT paying a 5%-7% commission, you can offer your buyer more…like a perfect house that is appraised, inspected and under warranty.

Every buyer who is in the market will know your property is also available and you can afford to offer more than your competition and maybe even ask less. The principle of substitution holds true and the laws of cumulative effect all allow you to control the entire process. The reason being that you have worked harder and smarter using information other sellers just don’t have.

O.k. Fiz, we have a pretty good ad written, the house is tweaked to perfection and you have all the paperwork necessary to move ahead confidently, so let’s go get our buyers.

List Your Home for Free or Low Cost (total support for free) (free, Sue is a doll) (free + guide) (ditto) (free fillable contracts) good (free, also forms under Resources) (free ads & articles) (free) (free) (free) (free) (free) (free) (free) (free) (free or paid MLS) (30 days free) (free) (free + broker $995 flat) (low fee) (low fee) (low fee) (low fee) (low fee) (low fee) (low fee) (low fee) (low fee) (low fee) (low fee) (low fee) (low fee, large inventory) (low fee) (high exposure, not cheap) (Kevin offers good value) (Open house day) (View listings. For buyers)

…or you could have the folks at do all that advertising for you and more...and get even on some of those for-fee sites for free!


Holy smokes! I could almost drown in that click stream of potential exposure.

Don’t worry my friend, just search as if you were looking to buy a home in your area and see who would give you the best exposure. You certainly don’t have to use them all! (On the other hand, you never know where the right buyer will be looking.)

Just so you know Fiz, here’s a quick fact. In 1995, 2% of buyers used the internet in their search for a home. Today that figure is at least 75%. Odds are pretty good they’ll find you when you use a combination of the services above!

900,000 FSBOs succeeded last year and another 1 million will do it this year alone.

Another thing you’ll want to do here Fiz, is to get a professional sign made Preferably of wood that will swing in your front yard (Don’t forget the waterproof facts sheet holder). As many as 50% of home buyers said they saw the sign. Let's make it a quality one that states the following:

For Sale by Owner

90210 Glenview Oaks Dr.
$199,888 Call 555-1212
Shown by appointment only
your home’s url .com



Note: It is often recommended that you use the cheaper signs for corners and intersections, only putting the price and phone number to call in large letters, so people can capture that info at speeds up to 45 MPH and call when they are better prepared to engage you.

Well Fiz, we have worked hard up to this point and, generally speaking, you would have had to do much of what we have done together already whether you sold by owner or with a traditional sales organization.

Here is where your true education begins!


Let the Negotiations Begin!
It is now time to deploy the strategy that we have so carefully designed.

Fiz, I want to tell you something before we begin: All the horror stories and nightmare scenarios that you may have heard in the past regarding deals gone bad or falling through and costing people fortunes in time, money, aggravation, frustration, lost opportunity and self esteem more often than not resulted from a lack of proper preparation, organization, planning and execution of specifically designed strategies. The reason people fail to achieve what you are about to do is because they lack the organized information, resources and proper support structures that are required in order to believe they can do it.
You have been well prepared, my friend! You are also well organized and have plenty of support. In a moment we are going to execute our strategy according to plan and, as you will soon see, the elements that have been put into place up to this point are what will allow you to accomplish your goal in a most effective manner.

PSYCHOLOGY 101: Reading Your Buyers’ Mind

The general rule of negotiation is the party who has the most power wins. That power often comes in the form of superior skill, knowledge, information, strategy, brute strength or resolve, resources, support, planning, organization and a unique ability to execute. All winning professional sports teams exemplify these attributes according to the degree of confidence they have in using these powers effectively to achieve their goals.

Magic Bullet: When you seek to give people power that you have, they will actively try to help you give it to them.

Negotiation as defined in the dictionary: A conferring, discussing or bargaining to reach agreement. We may also say to transact, haggle, barter, cope, handle, deal with or manage.

Let’s say that negotiation is a basic means of getting what we want from other people. The ultimate solution is to let other people believe that your ideas are their own. If you can achieve that, it only stands to reason that there can’t be any arguments as the result.

In real estate, the person who appears most desperate will, in most cases, lose the advantage in negotiation. That of course explains why every real estate buyer looks for motivated sellers, as it naturally builds in advantages to the buyers' benefit. Sellers who can wait to get their price effectively reverse this process or, at the very least, defend against it. In this case, time really is money!

Your first decision then is based on time.


Potential Options


[We are assuming the appraised value of our hypothetical home is $183,500]


Note: Quick way to figure percentages is to divide by 100. $199,888 divided by 100 equals $1,998.88 per percent point or roughly $2,000 for all intensive purposes.


Option 1 - Start high and test the market at $199,888 or about 9% above the market value of $183,500

Using this strategy takes time because of the resistance it creates. Buyers will investigate all other competing properties to compare, justify, disqualify or formulate a counter offer based on what they deem fair in the market.

If they present an offer at 6% below your asking price, which is the national average of discounts given by sellers, then that is an offer at about $188,000. This is ideal as you are getting a 3% premium above other similar homes in the neighborhood and not paying a commission to do it.

Your strategy was to remove all fear by providing a trouble-free immaculate home, inspected, under warranty, with full documentation that effectively transfers the power of ownership quickly and easily with very few problems to solve in the process.

Buyers generally realize other homes have a 6% junk fee attached and have not been prepared nearly as well for a fast and trouble-free transfer. They will pay for the convenience, speed, and security you are offering at this price.

Regardless of the fact that there is no commission involved, if they want you to go lower and split what was to be paid as a commission, simply tell them to go buy the junk instead for the same price. You have worked hard to provide this value.

2-3 weeks of exposure at this price point will be enough to tell you if you need to go to the next lower level to find what the market will bear while at the same time not stigmatizing you as an overpriced seller.

Option 2 - Price home at fair market @ $183,500 or below appraised value @ $182,900

If you price your home at or near the same price as competing properties in the market, your benefits package compared to the competing properties will outweigh all the others and your home will be sold to an astute buyer who understands its value relative to all other comparable properties available. The time it takes to sell at market value is based on supply and demand; you can call any real estate office and ask them what the average marketing time for a fairly priced home in your neighborhood is to get a good estimate of how long it takes to find buyers. This could be 1 day with multiple offers in hot sellers' markets or 1, 3, or even 6 months in severely depressed buyers' markets. Get to know the market!

Option 3 - Below market Priced for quick sale @ $179,900

Even if you sell below the appraised value of $183,500 and sell at $179,900 while not paying a 6% commission of $11,010, you're still better off then your competition who would get $183,500- $11,010 = $172,490.
Now remember you would have to deduct your benefits package costs of $1850 from $179,000, still leaving $178,050 or $5,560 better off than your competition who are still left struggling to get their price.

At this below market price you would have to concede nothing in negotiation and the property would be disposed of in very short order. You should never have to resort to this type of sales event, but things do happen so you have this option.

Let’s say we test the market Fiz. You know, go for all she’ll bear. Let’s find the buyer who wants a great home now and doesn’t have time to fool around. Agreed?

OK then, our first hurdle of setting and testing the price is done. We’ll work from here knowing that we are going to have to earn this premium by doing a superior job when it comes to showing the home, answering every question to our buyers complete satisfaction and quite possibly conceding some small favors regarding some of the following items.

Before we can proceed with the following final acts of execution, we must do what to some degree we would normally be paying others to do for us, and that is to screen our market participants - better known as the potential buyer’s pool.

We will screen first and then concentrate on finishing up our deal based on what we find to be of importance regarding these items below:


Our screening questions will begin to answer these:

Terms of the deal Date of closing Occupancy

Screening Your Potential Buyers


OK, Fiz. Please allow me to again remove any fear that you may have before we begin. You know the drill! I remove the fear and you go on to achieve great things.

Fiz, remember everything that you have done up to this point was done to make the next step easier. You have all the power you need to call the shots. You're simply looking for the right buyer to transfer this power to. You're actually a benefactor to the right person and when you find them, they are going to help you transfer your power to them.

Our real mission is finding the person who wants the power you are offering. We are looking for the perfect fit!

Your first requirement of a potential buyer is to determine at the very beginning whether or not they are actually qualified to buy what you are selling. This involves their primary motivations, current situation, time lines, and their financial ability to assume control.

We will start with their ability to pay because, without that, nothing else matters. So you need to understand the following two definitions:

#1 Pre-qualified: Is a person who has already spoke with a lender, and has a letter stating a certain dollar amount that they can spend on housing. This is based on a preliminary review of their credit standing through credit reports, employment status (pay stubs), 2-3 years of previous tax returns with schedules and W2 forms, three months of bank statements verifying funds on hand and any and all outstanding debt in all forms that they are currently obligated to pay.

This process is undertaken by filling out a “Uniform Residential Loan Application”. The bank reviews all documentation, verifying its validity, and bases its decision to loan certain amounts of capital to the individual applicant based on the qualifying ratios applied. In other words, can you afford this? And will you pay us back as agreed.

Since they have not yet found a home at this point to purchase, the prequalification deals only with their eligibility for a mortgage loan, not acceptability of a home as collateral for the loan.

#2 Pre-approved: A pre-approval letter is the gold seal of approval. This approval is as close to a direct endorsement as one can get without actually having a home picked out, appraised and inspected. This stronger form of proof really says 'we the lenders have reviewed income, credit history, job stability, cash on hand and the overall security of the individuals in possession of this letter and we consider them qualified to buy a home up to the stated loan amount on this document. If they like it and the home is found to be of sound quality, value and title, we will underwrite this loan as agreed. We trust them and have no fear.'

You, the seller, again are in the position of power and as such will not show or negotiate with anyone who at the very least has not obtained an initial prequalifying or approval letter that states they have done their homework, are prepared and can also afford what they are about to look at.

Knowing now that we are going to have to determine this fact very quickly in our search, we will need a script of sorts to get this vital information at the very start of our talks.

Now Fiz, before I give you the Magic script, you must understand the people who will be providing answers. If you don’t understand the types of people who appear as buyers, then the script will not work!

Understanding Buyers and Human Dynamics
Primary character traits!

Friendly: kind, trusting, amicable, cordial, well disposed
Introverted: withdrawn, shy, quite, anti-social
Suspicious: untrustworthy, questionable, doubtful
Hostile: opposing, fighting, battling, disagreeable
Factual: literal, exact, correct, discerning, direct
Extroverted: outgoing, sociable, talkative, high energy
Reasonable: sensible, credible, probable, intelligent, sound


So Fiz, remember what you're fishing for and cast the right bait. We don’t want bottom feeders. If you get the wrong fish on the line, quickly throw them back, but keep in mind federal fair housing laws prohibit you from discriminating based on:

• Race
• Color
• Religion
• Sex
• National origin
• Disability
• Familial status

Here is your first test, Fiz. See if you can choose who would most likely be the ideal type buyer for your home; if you answer correctly then you get to use the script!

Low ballers: These are usually sophisticated bottom feeders or professional investors who could care less about paying fair market value for anything. Their motivation is greed and they will almost always tell you that you’re asking too much. Show or inform them of the appraisal and they will disappear quicker than David Copperfield at a televised event.

Nitpickers: These types will nickel and dime you to death. They will eat up valuable time and criticize all manner of things. They rarely pay fair market value and pull stunts like finding fictitious things wrong on the 24 hour prior to closing walkthrough to get you to lower the price in some way. Show them the home's thorough inspection report and home warranty and move on.

Over-protected: These people are a fearful lot. They tend to be afraid of everything and ill prepared for anything. They will use escape clauses and contingency planning to avoid getting shortchanged at a Kool aid stand. You can overcome their fears if you take the time to quell those fears. They may in fact be excellent buyers due to your preparation and fear removal efforts.

First time buyers: I encourage you to give these people a listen. They may be well qualified with excellent credit, but unaware of the fact that you are only showing the property to pre-qualified and/or approved buyers. Send them off to a neighborhood lender to begin qualifying, while you continue to show the home.

The all cash buyer: All pre-approved buyers are considered to be in a position to pay all cash; the lender is going to give it to you in the form of a closing check. Treat them no differently then a pre-approved prospect.

The thief, wannabe and looker: Disqualify them over the phone if possible. Send them to your website if they want to be entertained. If they appear at an open house, follow them around every second while asking them a hundred and one qualifying questions. They will soon scurry out the door like the rats they are!

Real estate agents: Will be calling you! Tell them upon first encounter that you are working with another agent and you don’t feel it would be ethical to be speaking with them at this time. Do ask them for their card if they appear at your open house and keep it handy. If you ever need an agent, chances are you just met a go-getter! If you allow them to bring you a buyer (via MLS ads, for example), then say good bye to 2-3% of your hard earned money or about $5000 on a $183,500 sale. They are also well-seasoned negotiators and tend to alter your well-laid plans to their clients' benefit.

Reasonable, pre-approved and motivated inquirer: Hmmm, someone who is motivated has done their homework, has a need for what you have, and wants to see it. I’m not sure, what do you think?

Now before I give you that script, who of all the wonderful people above would you most like to be dealing with concerning transferring ownership of your lovely 00002.jpghome?

Remember! The first two things real estate agents are trained to do is determine financial ability to buy and the level of motivation present in the prospect!

Another smart thing you can do before accepting calls and visitors is to stop by a local lender and have them prepare a few different financing options regarding the purchase of your home. By telling them that you will be sending all prospective buyers who need to be approved their way, they will calculate a few different options with monthly payment amounts which will help you determine a buyers’ capacity to afford your home.

A quick base line to use is one third of a buyers’ monthly income is the limit of what can reasonably be used to pay a mortgage. For example, if they make $5000 a month total household income and don’t have extreme debt, they should be able to pay one third of that or $1,666.66 a month towards Principle, Interest, taxes and Insurance (the house payment) without defaulting.

Once again our dear lady Audrie is here to save the day - you just gotta love her, Fiz!

Remember Fiz, you are a do it yourself kind of seller. That means you are the one who has to ask the personal questions and they can be tough. Just remember, if someone is truly motivated and qualified, they will be more than willing to answer these questions in order to move on with the buying process.

When people start choking and balking and getting defensive, That is your cue to look at our character list above and take the appropriate action.

Always remain calm, cool and collected. You are in control and you have everything done! They are the ones who must act fast to get this great home first. Relax and take notes while you continue to ask the following questions which are going to help you structure the deal and the terms of the sales contract later.

You may also consider having the following items at your disposal. They are self explanatory in nature; however, I’ll touch upon them any way:

An answering machine message: To provide basic information related to the home, e.g. price, location, special features, a website and also to ask them to leave a number along with any questions they made need answered quickly. When reviewing messages listen to the caller's tone, intonation, disposition, and background sounds, e.g. children, traffic, yelling. You may get a feel for character when you review with critical awareness. Happy, mad, sad, sour, slow, excited, alert, motivated, scared, cautious, timid, curt, get a feel!

A telephone log: Helps you capture a caller's name, address and phone number and also provides a place to capture critical information gained from using the script on the call. Tape a calendar inside the cover to schedule appointments and monitor other dates of importance. This may

Facts and features sheets: Having these sheets by the phone allows you to refer to them easily to give the information being requested.

All your documents: Should be within reach while on the phone, you want to get the callers questions answered quickly so that you can get back to asking your own!

The following questions may be asked in any order, I have them in the order I would generally begin asking them. However, as your conversation takes different paths, you will find yourself skipping around and asking various questions as the opportunities arise.

Just remember - the more answers you get, to as many questions as you can ask without exhausting your prospect, the better.

The answers you do get will begin to reveal to you what kind of character type you will be dealing with if you choose to go forward. Answers will begin to crosscheck or conflict with each other. Too many inconsistencies, ambiguous replies or outright lies will quickly alert you to what may lie ahead if you choose to pursue further negotiation. Don’t ignore your intuition.

Print this before we start: It’s time… “Choose wisely, grasshopper”