uh oh--we jumped the gun.help ? about selling fsbo

dk_40207 · #1 01/01/08, 07:33 AM

I've looked at some of the great advice about selling your own home on here. We posted our homestead on craig'slist and another online group--and have people chopping at the bits to come see it. I know that doesn't mean we'll get an offer--but I'm actually not prepared as far as paperwork goes. With this slooooow housing market--I thought that it would just sit there like everything else--but interest is great. I'm going to call a realestate attorney and try to get in with them--but it may not be until next week. We are showing this Saturday.
I guess I'm wondering a few things:

How long can you hold a offer w/out accepting due to waiting for an attorney to approve?

Do we have to find and work w/ a title compnay--or the buyer?

Will the attorney or title company figure out "closing costs'? And does the buyer still pay them?

If some one wants to put a deposit to hold--what do I do w/ that money? Cash it--put it in the bank? I just want to make sure we do it right, and I'm ignorant for not having all of this lined out first! Help me!

Oh--how much of a deposit do you ask for--and under what terms do they surrender it? Like if they can't get financed etc.?

Blessings!
Christina
HAPPY NEW YEAR!

dk_40207 · #2 01/01/08, 07:34 AM

Oh--and I read conflicting advice about either going to an attoney or just a title compnay--I wonder about the difference in the way it all goes down.....

wwubben · #3 01/01/08, 07:53 AM

I would not make any large transaction without an attorney.I have seen too many people lose a lot of money.You may attract some real ill intentioned people when you advertise on the net and they think you are not protected by an attorney.Good luck and please be careful.

anniew · #4 01/01/08, 07:55 AM

It sounds like you need an attorney, since you have so many questions...about deposit, contract, contingencies, title company, closing costs, etc. The attorney can handle all of that and it will give you peace of mind to have it all taken care of rather than have it come back to bite you later when you've held it for three months and passed up other offers, then find out they can't get financing.
Don't be pennywise and dollar foolish.

Filas are Prima · #5 01/01/08, 07:57 AM

You ABSOLUTELY MUST HAVE A TITLE COMPANY.
Depending on the real estate laws in your state depends on just how you proceed. Banks often have ESCROW departments, to handle the paperwork, or the Title Company will. You can call around from your phone book making inquirys.
Any deposit/offer MUST be held by an escrow, who will also have the correct, legal for your state, required paperwork.
Some states require an attourny to do this work, others don't.
Regardless, a TITLE SEARCH must be provided by the seller, to the buyer.
There is a usual division of transaction expenses that the seller pays, and the buyers pay, or both parties split certain costs.
Each state has different required paperwork. You don't want any hasstles. You want your transaction to be immaculate, and according to your state's laws.
Look in your phone book under Title Company, Escrow Company, check with your bigger banks that make home loans for their escrow dept.s.

Janis Sauncy · #6 01/01/08, 08:01 AM

I bought my place on a private contract. Everything was done by the title company. No attorney involved.

No problems.

The agreements (amount of down payment, interest rate, etc.) were made through agreement between the seller and myself. The "earnest money" check was made out to and sent to the title company and held in escrow until closing. The title company drew up the contract, per our agreed upon terms, and then each of us signed. I can't remember (I'd have to check my paperwork) who paid the closing costs; we might have shared them. One of the things about this kind of transaction is the flexibility that dealing with a bank doesn't offer. This place had been a rental for years, with the owner/landlord more than half-way across the country, and he was tired of dealing with deadbeat renters. He was so desperate to sell he pretty much let me name my terms.

He wanted to sell on contract because he wanted the interest income. He also let me have it on a thirty-year contract, which has kept my payment less than what it would cost me to rent a one-bedroom apartment in this area. Apparently he has a much younger wife and is looking at providing an income for her after he's gone. My payments are low enough (and I made sure I have no pre-payment restrictions) that I am paying extra and I hope to pay it off in my lifetime.

The seller was in Missouri and I (and the property) was in Washington. All communication between myself and the seller was done by phone. The title company was in the county the property is in.

I know a lot of people will try and steer you away from this kind of transaction, but, for me, it's all been positive.

Janis

(Oh, and Happy New Year!)

Callieslamb · #7 01/01/08, 09:06 AM

worth what you paid for it

Quote:

Originally Posted by dk_40207

How long can you hold a offer w/out accepting due to waiting for an attorney to approve?

Do we have to find and work w/ a title compnay--or the buyer?

Will the attorney or title company figure out "closing costs'? And does the buyer still pay them?

If some one wants to put a deposit to hold--what do I do w/ that money? Cash it--put it in the bank? I just want to make sure we do it right, and I'm ignorant for not having all of this lined out first! Help me!

Oh--how much of a deposit do you ask for--and under what terms do they surrender it? Like if they can't get financed etc.?

1. You can hold an offer for as long as both parties agree to hold it. Most people do not want to hold long since they are looking for a place and want action. But you can agree to what you want to agree to. It is more for you to approve it than for the attorney to approve - from my understanding. The attorney approves the paper work and makes sure all is in order. We have sold our own place before and a realtor gave us the standard paperwork. We filled in the blanks and before we closed, the lawyer looked it all over. Legal work can be pretty standardized. It depends on what kind of financing the buyer is doing. If you are financing them....well, that all changes.

2. I think it is up to the buyer to work with the title company. They are the ones that have to have a clear title. Usually this is done through their bank if they are financing. If they are paying cash - I don't know. I would certainly look into it to see if you have a clear title. If you don't , you can't sell until that is cleared up anyway.

3. the banks usually do the closing costs - it is to them you usually pay them anyway. CLosing costs usually ahve to do with the inspections the BANK asks for and their fees. Attorney fees can be part of the closing costs - depending on how they do it in your area. We have both paid the attorney out of our pocket AND had it included in closing costs. some closing costs are paid by the buyer and some by the seller -depending on the kind of financing and what you agree to. Often, in a bad market, the seller will offer to pay part - it is all depending on what you agree to pay for with the buyer.

4. A deposit or earnest money as the realtor call it - is usually cashed and put on "hold". DO not spend that money. You can also not cash the check, but if I were concerned about the honesty of the people you are dealing with - I would cash it. Anyone can write a check for a sum of money that they don't have.

I would ask anyone coming to see the property for a letter from their bank saying they are approved to finance so much of a loan. That will reduce a lot of interested non-buyers and those that will want you to finance the entire loan for them. You can set the terms for how/when they surrender the earnest money. That money is just for them to show you that they are sincere in their interest in your property so they don't get you to take yours off the market, then decide to buy something else.

You really do need to see an attorney. THey will take you step by step through this process. It really isn't that complicated - or doesn't need to be. I would avoid all "funny" financing. As long as you have a clear title and know that you do - you should do just fine.

The buyer or their financial institution may also ask for different inspections - termites, wells, etc. Usually, those are paid in the closing costs, but I have seen it paid by both buyer and/or seller in different circumstances. It might pay you to talk to a bank also - your preferably. They can give you the info you also need to know about closing costs, etc, even if you are not the buyer. If they won't help you - find a different bank. We have also found realtors willing to help us with the closing issues - for a small fee. We have used their paperwork.

There are many ways to do this but the first thing is to come to an agreement between you and the buyer. As the deal progresses, often, items change. They might want the house painted - you might refuse. They might want the fences repaired - you might agree- if they are willing to pay a higher price. You just get together and make a deal.

Put on a tough skin. Some people will try to offer you way less what you think your property is worth.

Kevingr · #8 01/01/08, 11:21 AM

You can use either a Title Company or an Attorney, a Realestate Attorney is your best option. Many people at a Title Company are just office people who know about Titles, fees and Title searches, they are not there to give you legal advice. If you don't go to an attorney use your own Title Company. Personally, I use my own Title company (I'm a realestate investor) even if the seller tells me I need to use their's, that way I have someone on my side who knows what they are doing. I also have a Realestate lawyer who works with my Title Company, they work well together and I know my hind end is covered.

Be a little careful with all the people who want to see it, many people (especially investors) are just out looking for a good deal. If they are real savy and see that you aren't they may try and take advantage of that. Tell them to have a pre-approval letter from their lender before they come out, and tell them that all offers they submit (it can be on your forms or theirs) will require a 2% (at least 2%!) deposit (earnest Money) and all offers will be subject to your attorney's review and approval.

The length of time to review an offer isn't a big deal, just let them know what your review process will be (seeing your attorney). I've had deals where it's taken almost 6 weeks to get an approval (dealing with bank owned homes) and I've also submitted offers where I wanted an answer by 5pm that day (in a hot market where sellers like to hold all the offers and see what comes in).

Show the house, but get an attorney.

edcopp · #9 01/01/08, 12:28 PM

Quote:

Originally Posted by dk_40207

I've looked at some of the great advice about selling your own home on here. We posted our homestead on craig'slist and another online group--and have people chopping at the bits to come see it. I know that doesn't mean we'll get an offer--but I'm actually not prepared as far as paperwork goes. With this slooooow housing market--I thought that it would just sit there like everything else--but interest is great. I'm going to call a realestate attorney and try to get in with them--but it may not be until next week. We are showing this Saturday.
I guess I'm wondering a few things:

How long can you hold a offer w/out accepting due to waiting for an attorney to approve?

Do we have to find and work w/ a title compnay--or the buyer?

Will the attorney or title company figure out "closing costs'? And does the buyer still pay them?

If some one wants to put a deposit to hold--what do I do w/ that money? Cash it--put it in the bank? I just want to make sure we do it right, and I'm ignorant for not having all of this lined out first! Help me!

Oh--how much of a deposit do you ask for--and under what terms do they surrender it? Like if they can't get financed etc.?

Blessings!
Christina
HAPPY NEW YEAR!

Sounds like you have just enough information to be dangerous.

That's O.K. There is plenty of time for learning. The market is slower than molasses in January, in Indiana.

Contact a lawyer who deals in real estate matters. He will need to explain how a real estate contract works, because from your post you do not know.

The contract process works something like this: A party (you) offers a property for sale at a certain price. A person (the buyer) usually makes an offer at a lower price or stipulating some other terms. This is where the length of time for "Acceptance" should be written (in the offer). If the offer to purchase is not accepted within the stated time then the offer becomes Void (scrap paper).

The difference between a lawer and a title company is moot. The title company will have a lawyer on staff, and most likely will be owned by the lawyer. The term title company is short for "title insurance company". This is what they do, they sell title insurance. Lawyers can, and do the same thing.

At any rate make an appointment with a lawyer or a title company for advice. Be patient the market is slow.

donsgal · #10 01/01/08, 12:55 PM

Quote:

Originally Posted by dk_40207

I've looked at some of the great advice about selling your own home on here. We posted our homestead on craig'slist and another online group--and have people chopping at the bits to come see it. I know that doesn't mean we'll get an offer--but I'm actually not prepared as far as paperwork goes. With this slooooow housing market--I thought that it would just sit there like everything else--but interest is great. I'm going to call a realestate attorney and try to get in with them--but it may not be until next week. We are showing this Saturday.
I guess I'm wondering a few things:

How long can you hold a offer w/out accepting due to waiting for an attorney to approve?

Unless a time is specifically written into the contract, there are no time restrictions.

Quote:

Do we have to find and work w/ a title compnay--or the buyer?

Most real estate attorneys will have a title company that they prefer working with. Usually the buyer pays for a title search and the seller pays for title insurance.

Quote:

Will the attorney or title company figure out "closing costs'? And does the buyer still pay them?

The title company is required to provide a HUD statement, which is a break down of all closing costs that will be paid by each party.

Quote:

If some one wants to put a deposit to hold--what do I do w/ that money? Cash it--put it in the bank? I just want to make sure we do it right, and I'm ignorant for not having all of this lined out first! Help me!

Usually the attorney will have an escrow account that he will deposit the money into. Or you can set up an escrow account yourself.

Quote:

Oh--how much of a deposit do you ask for--and under what terms do they surrender it? Like if they can't get financed etc.?

If you are talking about "earnest money" that is a deposit that they put down at the time they make an offer which essentially states that they are serious about the offer. If they "back out" on the deal without a good reason, you would keep the earnest money. Any other money that is put down on the property is part of the financing arrangement after the contract has been accepted by you. They would not get any of this money back under any circumstances if they back out of the contract. In fact, if someone backs out of a signed contract you can go to court and ask for "specific performance" and require that the buyers uphold the contract terms and conditions.

If someone sees your house and wants to buy it before you can get to an attorney, just write out a receipt that says.

"___(Them)_____ (buyer) hereby remits the sum of $___(amount)______ given as earnest money for the purchase of the property located at ____(address of property)____________. It is given with the express understanding by both parties, as evidenced by the signatures below, that this sum is NOT REFUNDABLE to buyer unless ____(You)________________ (seller) does not accept buyer's Contract For Sale for the above-referenced property. Seller reserves the right to refund earnest money, without further obligation to buyer, at any time prior to the acceptance of buyer's Contract for Sale.

Have both parties sign and date the receipt. (Make a photocopy of the signed document for yourself). This should be sufficient until you can get to the attorney and deposit it in his escrow account. I would not accept less than $1,000 as an earnest money deposit. Otherwise, it is too easy for people to just walk away.

Just a word to the wise. Do NOT stop showing your house just because you have an earnest money deposit or even a contract for the house. Just tell everyone else that the house has a deposit or contract on it. A very high percentage of real estate contracts fall through before closing. When you talk to your attorney and get proper paperwork for the buyer, make certain that you also get blank "back up" contracts so that you can accept offers from people in case the ORIGINAL CONTRACT does not close.

I'm thrilled to hear that you have so much interest in your property. Good luck with selling it.

donsgal

donsgal · #11 01/01/08, 12:57 PM

Quote:

Originally Posted by Janis Sauncy

I bought my place on a private contract. Everything was done by the title company. No attorney involved.

No problems.

The agreements (amount of down payment, interest rate, etc.) were made through agreement between the seller and myself. The "earnest money" check was made out to and sent to the title company and held in escrow until closing. The title company drew up the contract, per our agreed upon terms, and then each of us signed. I can't remember (I'd have to check my paperwork) who paid the closing costs; we might have shared them. One of the things about this kind of transaction is the flexibility that dealing with a bank doesn't offer. This place had been a rental for years, with the owner/landlord more than half-way across the country, and he was tired of dealing with deadbeat renters. He was so desperate to sell he pretty much let me name my terms.

He wanted to sell on contract because he wanted the interest income. He also let me have it on a thirty-year contract, which has kept my payment less than what it would cost me to rent a one-bedroom apartment in this area. Apparently he has a much younger wife and is looking at providing an income for her after he's gone. My payments are low enough (and I made sure I have no pre-payment restrictions) that I am paying extra and I hope to pay it off in my lifetime.

The seller was in Missouri and I (and the property) was in Washington. All communication between myself and the seller was done by phone. The title company was in the county the property is in.

I know a lot of people will try and steer you away from this kind of transaction, but, for me, it's all been positive.

Janis

(Oh, and Happy New Year!)

Janis you were lucky. I would not even trust FAMILY with this kind of arrangement.

donsgal

Stephen in SOKY · #12 01/01/08, 12:58 PM

If they're truly chomping at the bit now, they'll still be after you've gotten your ducks in a row. Actually, they may be even more interested.

Pelenaka · #13 01/01/08, 01:02 PM

Before showing your homestead I would come up with a small questionaire so you can interview prospects. Keep completed profiles by the phone incase of call backs.
Name & addy, home/work number, & as Callieslamb pointed out having prof of prequalified mortgage is a great thing.
Also have a prepared written information packet of your homestead for seroius buyers; deed map, tax bill amount, well or water info, sewer or septic, paperwork on furnace, roof, and appliances if they are included.
Also mention that they must adhere to the appointment time as you have numerous trained watchdogs.
Can't think of a polite way to say this but I would let looki-loos know no childdren or extra peeps for a showing. That many more people to keep an eye on when they are walking thru your house & barn.
Have noticed an increase in For Sale by Owner in my neighborhood.
Last year there was a raffle for a '80's ranch house 3 bedrooms with woodstove & new fancy HD styled kitchen, newer pole barn set up for horses, 10 or so acres with a stream. Good school district ect. Tickets went for $100 max amount to be sold was 1,000 tickets.
Run by a local attorney. Website & write up in the local paper.
Many tickets were bought as gifts by parents to newly starting out families.
Good luck & keep us posted,
~~ pelenaka ~~

Ken Scharabok · #14 01/01/08, 04:25 PM

If your ad doesn't state an asking price you are still flexible on it. I think I am correct if an offer is below asking price you can decline it. If at asking you likely have some obligation to accept it. In a hot market I have heard of properties going for higher than original asking price as buyers bid against each other.

As noted above, have them bring a letter of credit from their financial institution stating they would give the party a mortgage up to a certain price.

If you do a search on Amazon.com on for sale by owner you can likely find some reference books.

dk_40207 · #15 01/01/08, 04:44 PM

Thank you thank you thank you. I feel better. That raffel idea is so cool--we would get what we were asking for--and someone would get a ready-to-go homestead for the price of two tanks of gas! Hmmmm. something to think about.

Dk & Christina

Dutchie · #16 01/01/08, 04:48 PM

First thing I'd do is have it appraised. And have the buyer worry about title cos etc.

nathan104 · #17 01/01/08, 05:06 PM

I just sold my place FSBO this summer. We just contacted a local title company and they told us what we needed. I searched the internet and researched contracts and wrote up my own, or for a couple hundred bucks, you can get an attorney to write one up for you. The title company will hold the deposit. The amount of the deposit really is up to you. If there are no wierd stipulations and they are not wanting to push the closing date out farther, $500-$1000 is normal in this area. Despite what the poster above said, you do NOT have to accept any offer even if it is at full asking price. You can accept or reject whatever you want. You can take however long with the offer that bother you and the person making the offer agrees to. Usually though its just a few days at most. If you do not feel comfortable reading and undertstanding an offer then pay for the attorney. A good idea is to make up and print out your own offer paperwork to hand out to buyers. That way, you know what in it legally and you will be able to quickly point out and read any stipulation or anything else they add as a contingency to the offer. If you are getting a whole lot of interest and the local market is very slow, it is possible you priced it too low. You can either pay for an appraisal or what I did was to "interview" real estate agents and have them come through and tell you what they would list it for. Then I averaged the prices together and discounted it to sell quick. One thing you want to avoid is the contingency of the buyer must seel their current home first. Good luck and once its all over, you will realize just how easy it was to sell on your own and save all that real estate commision.

Beeman · #18 01/01/08, 05:27 PM

Beware!

Be very cautious about offers as you aren't pre qualifying people and don't know whether they have a house to sell before they can buy yours. People will leave a deposit just to tie you up, take back up deposits if possible.

I'd bet a portion of the people anxious to see your property are real estate agents looking for a listing.

dk_40207 · #19 01/02/08, 06:50 AM

thanks for all of the advice.

Ken Scharabok · #20 01/02/08, 06:59 AM

"Despite what the poster above said, you do NOT have to accept any offer even if it is at full asking price. You can accept or reject whatever you want."

Perhaps if there are conditions to the offer. However, assume it is a cash offer. Equivalent to your listing an automobile in the paper at $2,000, someone saying they want it and start to hand over $2,000 in cash. If seller declines, buyer may have legal recourse - especially if they are a recognized minority. Same concept would seem to apply to a realty property if a cash offer was made.

On the last property I bought seller wanted $48K if they paid commissions or $45K if I did so. I agreed to the latter. Had they backed out of the deal then I believe they would have owed the realty company the earnest money equivalent (and I would have gotten it back).