How to sell a home w/out realtor - FSBO

[johnsmb]

We are relocating and through word of mouth, have a potential buyer before we even had a chance to list the home with a realtor. I have no clue how to go about doing this. I called a couple of attorneys and it seems pretty straight forward. Any advice/tips???

Wish us luck, we are showing the house this weekend....

[JacknJava]

I would think as long as the potential buyers have an inspection done (around $200) and you pay a good real estate attorney to do the paperwork, you shouldn't have a problem. That would be great, huh?

So where is Northern MN for you? I work in Duluth.

[notenoughtime]

Good thoughts coming your way--my house has been on the market for 90 days with a realtor and no luck. But we did buy our farm from the previous owner and had a lawyer do all the paperwork. Went like a charm no problems at all.

[anniew]

Make sure if you get a contract offer (in writing) that you have the attorney check it before agreening to it and signing...it may have some language in it that could hold it for them for an indeterminate amount of time while they do the inspection, get financing, etc. and in the meantime you might have had another buyer. Financing is sometimes a big hold up, and you don't want it tied up waiting for months on that.
Or, you probably don't want it contingent on their selling another home first.
Just talk with them, and tell them that when you get a contract in writing, you'll run it by your attorney before making a final decision about the terms.

[Jim S.]

I've done this. It is very straightforward. Get a contract form from your attorney, make sure you know everything that needs to be filled out. Be SURE you list what stays with the house, what doesn't, and who pays inspections, closing costs, and how taxes will be pro-rated.

I have put in there a daily "rental" arrangement, where if I stay a few days after closing, the buyer gets paid so much a day. If they move in ahead of time, I get so much a day. Be sure if you do this to put in a maximum amount of time, either way. DO state a firm closing date.

I would strongly suggest you contact 3 Realtors, tell them you want to sell your house, then have them come and do a no-obligation market assessment of the home. They will tell you what each thinks it ought to sell for. If you average the 3, you'll be close to actual market value. Good to do this, so you are sure you are not getting low-balled. I did it.

DO get a deposit, and a substantial one at that. If your buyer backs out, you will at least retain that much. Once your contract is signed by bth parties, IT IS BINDING. Either has legal recourse if the other backs out of the specifics.

[JacknJava]

When figuring out the price of the house, however, also keep in mind the amount of money you will not be paying a realtor. Yes, you will incur legal fees, etc., but it should not come near what a realtor would get out of the deal.

[RedHogs]

I have put in there a daily "rental" arrangement, where if I stay a few days after closing, the buyer gets paid so much a day. If they move in ahead of time, I get so much a day. Be sure if you do this to put in a maximum amount of time, either way. DO state a firm closing date.

One reason you might want a realtor, is the above info is common and incorrect if you do this and even pay for your new home owners insurance, and the house burns you lose your new home and keep the debt, the devil is in the small print of your policey, to do this requires a rider on your or their policy and is not even accepted by most RE brokers.

DO NOT write the contract yourself, if you must....let the lawyer write it so that any mistakes are insured, agents carry Errors and Omissions insurance which handles 95% of bad contract cases.

As to the last part, DO NOT state a firm cLosing DATE,

Give a close by Date, given the interpretation of some contracts the closing early could be argued to avoid or trump some contingencies, This problem is avoided by Close by wording.

[ET1 SS]

For FSBO you can get your house onto MLS so it is seen by just as many buyers as a realtor's clients would see.

[Rowenna7]

Originally Posted by ET1 SS

For FSBO you can get your house onto MLS so it is seen by just as many buyers as a realtor's clients would see.

What's MLS? We are trying to do a FSBO right now and it sounds useful. Thanks!

[quietstar]

Be a honest man with some self respect...If you need an appraisal, don't be low and dishonest by following Jim Steeles sneaky idea of stealing the work product of three hardworking Realtors. He urges you to lie about your intention to list when you have no such plan. Jeeze...How can anyone expect a good outcome with such a dishonest beginning? Back to your question..Often you can save bucks and process a sale in a timely manner by going directly to a good local title company. With the conditions that exist in the current home loan market, I might not be quick to take my home off the market until you can contract with an APPROVED buyer. Timewise, underwriters for lenders are under the gun to make certain all loans will be readily accepted and can be sold in the secondary market. This can delay a normal 6 week closing by 7 to 14 working days. Good luck...Glen

[ET1 SS]

Originally Posted by Rowenna7

What's MLS? We are trying to do a FSBO right now and it sounds useful. Thanks!

Multi Listing Service.

When you go online to search through an area and look at all of the homes that meet your criteria. Generally each home is put on the MLS by a realtor. But you can get your FSBO home listed there too. That is the only way that realtors will alert buyers to your home, and it is a primary method that folks search for homes.

I used to search it, then when I met with a realtor in his office, he would type in my desires and do the search again. Sometimes I would already have a group of MLS listing numbers that I would give to the realtor, asking about each one. Then the realtor prints out which ones he recommends, and would hand them to me. Five or six for each day, and I would go out driving all over Maine trying to find all those homes to look at them.

It was the primary method of how I searched for homes.

I did the same routine through four different realtor offices in Maine, during different trips coming up here to search for a home. I drove and drove, I go so lost many times. And often I ended up in front of a property, walking around and I would have questions, the printouts all have the listing agent's phone number so you call the listing agent, and hope that he has seen the property, so that maybe he can answer a question or two.

I was really upset at how many realtors list properties on the MLS in Maine without ever having stepped foot on the property. So of course they could not tell you anything about it.

But anyway the MLS is the primary tool that realtors and home buyers use to find homes for sale.

[MoonRiver]

I just sold my house without a real estate agent. Find a real estate attorney that will act as facilitator. In my case, the buyer and I first agreed on a price and a few other things like closing date, what items stayed with the house, etc. Then we met with the attorney who took that information, asked a bunch more questions, and prepared the sales contract. The buyer and I both signed the contract at the attorney's office. We also agreed to use the same attorney for settlement. He advised each of us what we needed to do before closing and his paralegal followed up to make sure everything was done. One of the easiest closings I ever had.

Closing on my new house, with the "help" of a real estate agent, was not as pleasant an experience. Many things were left to the last minute and had to be resolved at closing leading to some heated discussions with the attorney. In my opinion, a good paralegal is the key to a good closing.

[minnikin1]

We have bought and sold a lot of real estate.
We liked the direct contact with the buyers when we sold by owner.
Having real Estate agents involved can be like playing the whisper game..

(the whisper game, if you have forgotten: STand a bunch of people in a line. The first person whispers a message into the ear of the next person in line and they whisper to the next person and so on down the line. The last person tells out loud what he heard. It's never even close to what the message was at the beginning..)

Get a real estate attorney to handle things for you. Get the attorney's approval on everything before you sign.
Most contracts are "boiler plate", meaning they use the same template contract over and over for every deal with only minor changes. You can buy boiler plate forms at your local office supply store. At the bottom, both you and the buyer can write "contingent on approval by attorney" to help ease the nerves.

Every FSBO seller should have a blank offer-to-buy contract on hand.
(Trust me! One night we had two buyers look at a house and they both wanted it. They knew about each other. They were both in near hysterics trying to find a proper way to present an offer to us before the other.
We were unprepared to help out that day. Never again, though! We always have the blank forms on hand now! )

BTW, in the deal above, one buyer ran to office supply and bought a blank form. One buyer CALLED a REALTOR and asked her to write a contract for them!??! Guess who got that house?????

Congrats on selling in this terrible market!

[Ken Scharabok]

Times change, but I doubt you can list a FSBO in the MLS - as their primary business is with realty companies who don't particularly want the competition. Some communities, though, do have a separate FSBO MLS-type arrangement.

I tried to do two FSBO. After about six months I went to a realtor. One sold within two weeks, the other within a couple of days. Reason: After I signed the listing the realtor called some people she knew who she knew were looking for a property like I was selling. In both cases I jacked up my FSBO price to cover commissions and they sold for that price.

I also swapped properties. My attorney put me in touch with a real estate attorney who handled everything.

If you advertise a FSBO in the paper likely you will get a lot of calls from realtors wanting you to list. You might tell them they can arrange to show the property and, if they have a hot customer, you will do a one-day listing with them for half the normal commission.

[kasilofhome]

Red hog is right about the insurance issue but a simple call to the insurance company and request for a ride to cover such a siduation never failed me when I was working in the field.

It is very common and we called the early oc's or rental agreements. Standard MLS form was used. Never had a broker care if an early oc's was or became part of the deal.

Another source for forms are LOCAL office stores. National chain stores will more than likely have similar forms but often times they are so general to meet the Basic legal needs of the majority of states that they can be of little real use in the area that you live in. Which is why if you have the buyer in hand and you are not trying to get free work for a few bucks it can be handled by a lawyer.

Do check out the buyer. Do check to see about how to handle any earnest money. Just putting it in your bank account might not fly in some states. Escrow company (often tied in with title co's) might be another way to avoid the realtor fee's which are NOT set in stone but are pretty standard at about 6% of the gross sales price on a resale prop. These rates can be dickerd with a broker would have the final say if they would take a major cut in the rate seeing how you would be walking the buyers to the door.
There are really alot of options out there for you. Ask yourself if you understand the required things enough to go it alone. If you don't no shame in getting help -just know that things have to be legal and all the I's dotted and T's crossed. Often times there are misunderstanding and that is where having a 3rd party involed can be valuable in the long term. Even the best heart dr. will get some other doctor to open him up.

[ET1 SS]

Originally Posted by Ken Scharabok

Times change, but I doubt you can list a FSBO in the MLS - as their primary business is with realty companies who don't particularly want the competition.

Respectfully, I think that you are mistaken.

Googling will find you 'realtor's who will list your house onto the MLS for a flat fee.

[MarleneS]

ET1 SS, Multipal Listing Services (MLS's) are funded by membership fees. Membership fees are paid by people who hope to inhance their income by listing, selling, etc. properties owned by themselve or others. The by laws of the MLS I was a member of insured that members were licensed real estate agent, and that all listings submitted to the MLS had legal real estate contracts completed and on file with a real estate brokerage.
I'm therefore in agreement with Ken Scharabok - it is doubtful that you can list your property as a FSBO in MLS. Please give us an MLS office who has done this so that we can verify for ourselves that what you are saying is factual.

I have not been a licensed real estate agent nearly 15 years -- of course their could have been many new changes of which I am not aware.

The advise of using an attorney who specialies in Real Estate transactions to go over any contract to purchase offered to you by a potential buyer. He will insure that all your interests are protected and that you have legal recourse if the buyers fail to hold up their part of the transaction. (Will you require an honest money deposit - if the sale does not go though who will the deposit belong to? -- stuff like that )

On first glance it might look like it is to your advantage to have your attorney draw up the contract, which will also work - but long term it is best to advise buyers to have their own attorney.

It's also possible to buy and sell property with nothing but a verbal contract, and the act of sale recorded by your county's clerk of court. Possible, but not likely a good idea in our litigious nation.

Make sure you read and understand everything before you sign it no matter who has drawn up the contract. It's always best to have your own attorney explain any questions that you might have.

Some things to think about: 1.) Do the buyers require a loan? How much time should be allowed buyers to get a loan (your property will be off market while this is being done.) 2.) When will taking possession of the property take place? Usually this is after the property closing, but there are times when the sellers need extra time to remove their belongings etc. 3.) Do you currently have a loan on the property? Or any liens against it? Does the lender have the right of decision to the property being marketed? 4.) Do you guarantee any appliances, or other mechanics of the home? 5.) Have you paid for property taxes in advance - and is the buyer responsible for the time left between closing and new taxes due?.....

Getting any ideas on how real estate agents actually earn their commissions yet?

Good luck with your transaction.

Marlene

[Kevingr]

I buy and sell homes to rehab as well as to rent out. You can list on the MLS for a flat fee through a Realtor, I do it all the time. I must go through a Realtor and he/she does get a flat fee, usually $400 if he/she doesn't do anything other than list it. $700 if they handle the purchase agreements for me, but not the closing. In the agent remarks the listing agent states that the seller has chosen to represent themselves so work with the seller unless there's some kind of issue. There's also a legal binding contract that the buying agent, if any, will be paid their commission which is typically 2.7%.

[ET1 SS]

Originally Posted by Kevingr

I buy and sell homes to rehab as well as to rent out. You can list on the MLS for a flat fee through a Realtor, I do it all the time. ...

Thank you for explaining your experiences in this matter.

I have bought and sold a few properties [all MFRs] over the years. Each time I did use realtors, both during the purchase and during the sale.

It was not until this past and most recent purchase that I did it entirely as a private sale, between the seller and buyer and using a lawyer for a flat fee of $200.

[minnikin1]

Originally Posted by MarleneS

Please give us an MLS office who has done this so that we can verify for ourselves that what you are saying is factual.


Marlene

Do a quick google search of "flat fee MLS".
Some are for special FSBO MLS sites but many include realtor.com and local MLS.