I think there is a lot more to this topic. Many factors arent being considered and I say this as a Realtor. I agree, a simple house, without any issues, a clean ownership can be easy to sell FSBO.
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But, not all homes or owners are like this. Some houses have nasty ownership issues, shorts, divorces, trusts, liens, issues with neighbors, easements that may be roughly documented, the list goes on and on.
If you represent yourself and also end up not using an attorney you can be held responsible for findings later on that werent properly disclosed since you didnt know any better. Realtors are held to a higher standard as they have the privilege of knowledge. If we make a mistake, the agent is usually sued, not the home owner who hired the agent.
If you represent yourself and an issue arises, you take that burden on yourself. Common theme of all the blog is always cost savings. Neglects that not everyone has the skill or time. Also, if the buyer is repped by an agent, what then? Is it worth it then? That is one of the best ways to save money vs.
This is a common misconception by people that have never sold real estate. Of course we are going to negotiate as hard as we can for a buyer and not worry about a commission. Lets say fair market price is , We put in an offer and it gets accepted at , Another point, I think printing contracts online is laughable. I mean I understand not wanting to go for the full commission but its worth the dollars to make sure the contract is right.
Another point would be having a house that is not in perfect condition and having a buyer that is using FHA or other government financing. Would that still come out of the sale price?
If so, presumably as an FSBO seller you may want to only sell to unrepresented buyers. Yes, it would be part of sales price and could be negotiated. If you are comfortable with your title company and all of the permits and regulations in your area fsboing is doable. However, it may turn out to cost you about the same if you get screwed in fees and title costs without representation by someone who can guide you.
I know when I bought a home, there were dozens of questions I had to ask my realtor about home warranties, inspections, and terms my seller wanted me to agree to.
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Had I been on my own these unneccesary costs would have come out to about what I paid the realtor. Excellent timing! I have been thinking about this same issue. I am currently working hard on paying down my condo so that it is no longer under water. I have been intimidated by the process of FSBO, but I did actually purchase my condo from an owner and did not use a real estate agent on the buyer side either. It went very smoothly. I just worry about any hiccups in the process. But the help of a site like for sale by owner would be great.
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I think the biggest part of advertising these days is getting listed on the MLS anyway. FSBO might be in my future. Only members of the local board realtors have access to the MLS. I do agree sites like trulia and zillow have made searching for a home easier. I believe more brokers should offer rebates to buyers who do their legwork and homework online. This subject of buyer rebates and the legality of it are covered in-depth on my blog. Every single real estate investing class and seminar I attend teaches its students to target for sale by owners and for rent by owners.
What most of these seminars teach its students is to find easy targets, and ask for seller financing with the seller being subordinate, ask to take over payments, ask for lease with option, rent to own, etc.. Ok, we hear you.
So then what? Require potential buyers to have been prescreened? I wish everyone did the same thing. Imagine: a group of real estate agents that give away ALL of their information in order to help people feel comfortable buying or selling their own homes, for free. That would get a lot of publicity. Care to finish it up? Yes, every professional agent puts their customer in front of lender to get a pre-approval or pre-qualification letter before showing the customer any homes.
Yes, I agree more agents should give their information away to help the customer feel comfortable. The fact of the matter is that I agree with the author and more people should try to sell their home by owner before hiring an agent. I remember my wife and I had to go through that process when buying a home.
However, I do not believe we got lender-preapproved until we found a home we liked — then we got preapproved for that amount. Until that point, our agent was showing us homes based solely on the price range we came up with. So it may vary state-to-state, or perhaps just agent-to-agent. Even a remodeled home can have issues that need to be taken care of by the sellers you. Most commonly, these are permits. Unfortunately, DIY homeowners and house flippers are notorious for not pulling the required permits when remodeling a home.
This becomes a problem when future buyers apply for a mortgage, and the appraiser discovers permits not pulled with the town. If the necessary permits are not in place, the appraiser will inform the buyer that the mortgage is contingent on all required permits being closed for financing to be approved. Required permits will vary from town to town.
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So be sure to check with the building department. Here are some of the most common remodeling items that do and do not need permits. Before selling, make sure these are appropriately closed. Pull the permits for anything your town regulations requires. Almost certainly, when a buyer wants to purchase your home, they will include a home inspection contingency in the contract.
An inspection flushes out any defects your home may have and gives buyers to have the right to cancel the contract based on these problems.
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They can also renegotiate with you and get a better deal on your home. The inspection contingency can put the home seller in a position of weakness when negotiating significant repairs. If you want to put yourself in a place of power, consider getting a home inspection performed by a licensed home inspector before adding it to the market. If you know in advance that your home has a lot of issues and you are unwilling to repair these defects, either before or during the sale, you should consider marketing your home AS-IS.
To do this, you should let prospective buyers know that the house has defects and it sells in AS-IS condition. In the event of AS-IS selling, you should encourage your buyers to get a home inspection, but also inform them that you will not make any repairs or be re-negotiating the sale price of the home. But be aware, they only buy your home if you are willing to sell for deep discounts.
Want to learn more about the home inspection? How and what you are legally required to disclose varies by state. A material fact is a fact that, if known, might have caused a real estate buyer to make a different decision with regards to remaining in a contract or to the price paid for the house. So if you know about any defects in your home, you have two options: fix or disclose the defects.
In fact, if you try to cover up these flaws and the buyer can prove you had known about this condition when it was sold to them, you are opening yourself up to costly legal action. So just be honest. Check out this article by Lawyers. If a buyer gets a home inspection and informs you of such defects, you are now required to disclose those defects to the next buyer.
In addition to the property disclosures, there is a federal requirement from HUD that all home sellers must provide, which is the lead paint disclosure. This disclosure is for homes built before Because this is a federal law, this applies to all states.
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