The Knowledge Resource
FOR
For Sale By Owners

What Does It Take?

     We've talked about many aspects of selling your own home, including the legalities, skills, the advisability of using a real estate agent versus selling on your own, and more.

     While owners typically concentrate on dressing up the house and yard before placing the house on the market, it is imperative that the necessary "due diligence" and fact-finding be done. Errors in documentation could result in loss of the sale or, worse yet, in a lawsuit. You can always sell the property as a fixer or reduce the price and still sell, but you absolutely can't effect or close a sale without the critical items on the list that follows:

• Order a description and property tax information obtained from the courthouse or a title company as your property tax assessment notice might contain errors.

• Be ready to provide the exact square footage of the house; this must be livable space, not crawl space, garages, porches or patios.

• Complete a property facts-and-amenities form similar to the listing form used by real estate agents.

• In most states, sellers must provide a property disclosure. Obtain this form from a real estate licensee or from the Department of Real Estate or Real Estate Commission/Division in your state.

• Contact your lender for your mortgage payoff information. You may have to pay a nominal amount to secure the information.

• Ascertain from public records whether any liens or other legal actions are posted against your home. If there are and you proceed without the knowledge, you may be prevented from selling before these are cleared up.

• Details about your homeowner's insurance policy including amount of premiums, number of claims, and coverage exceptions.

     This work can be time consuming. You may wish to hire a real estate consultant to assure that this is all done accurately and in a timely manner.

You've Found a Buyer!

     Great news! Nonetheless, your work is not over; it has just begun. If anything goes wrong, you could be right back where you started. Probably not out any money but with a lot of time and effort wasted.

     To summarize, at this point, you've shown the house and have found someone who's seriously interested.

Time for the next steps:

• Make sure buyer is pre-approved - obtain documentation.
• Once the buyer is pre-approved, finalize negotiations.
• Draft a purchase and sales agreement (forms are available at most stationery stores) - Consider having an attorney review the contract for a fee ($250-$750).
• Find a local escrow company to handle the monies and expedite the necessary paperwork for closing.
• Obtain good-faith deposit (3% of purchase price) and deposit with your escrow company.
• Complete "due diligence" information and paperwork on the property for the buyer as well as any Property
Disclosure form required by your state (even individual sellers are bound by state disclosure laws).
• Coordinate home inspection, termite inspection, buyer's walk through after inspection and the appraisal (a lender will only lend based on the actual appraisal, regardless of your contract).
• If the buyer included a provision in the contract that required the property to appraise for the purchase price and it didn't, the buyer could pull out of the deal without losing the deposit.
• Locate companies to make repairs required by buyers as a result of the inspection or be prepared to renegotiate with buyers. Buyer must verify that repairs have been made.
• Once the transaction is in escrow, stay in touch with the buyers and your escrow officer until the end of the escrow period. Take your check to the bank and pat yourself on the back. You deserve it.

Your next steps include Coordinating a home inspection, termite inspection, a buyer's walk through after inspection and an appraisal.