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| * FOR SALE BY OWNER Commonly called 'FSBO' both inside and outside the industry. For any number of legitimate reasons, some people chose to attempt to sell their property privately. Although the practice is frowned upon by the majority of the Realtors, the fact is that FSBO's are a source of inventory that by and large eventually end up being sold through organized members of the local real estate board. It would be folly to begrudge anyone an opportunity to save money by selling their possessions without paying the perquisite fee. If it is within the capacity of a person to do so then at least explore the possibilities. Who wouldn't want to save 3%, 4%, 5%, 6% or even more on such a significant sum such is the cherished real estate we all strive to acquire? As with any venture, there is the element of risk and one should be aware of certain aspects that are prevalent in this regard. Ok... assuming that after some consideration and research, you decide it is going to be worth the try. Preparation is the key and that means having some presentable hand-out Feature Sheets prepared describing the obvious and not so obvious attributes of your property. Write an ad for the newspaper (you'll have to decide which one is best) and don't forget to include a photo of the house. Remember, the local Realtors also advertise locally and mostly just to let the community know that they are there. Statistically speaking, buyers rarely buy within the community they live so think of where you want to target potential buyers for your property. A sharp looking For Sale sign to let passers by know your selling privately is the best advertising as it is working for you 24 hours a day. As soon as the Private For Sale sign or notice appears, be prepared to have lots of phone calls from the neighbourhood Realtors. They know the reality of FSBO's and will try to explain the details to you but we know that usually it is to no avail. You have heard of others doing this and by God you can do it also!!! FSBO - "For Sale By Owner" - A daunting task that some people choose to undertake with the thought that they will ultimately save a buck or two. Occasionally it ends up costing the seller much more than the amount they expected to save. Getting The Right BUYER They are ellusive, aren't they? Buyers that is. To get the right buyer there is the marketing, advertising, promotion and screening of prospects. Qualifying them to make sure they can afford to buy and this leads to more marketing, more advertising and screening. Then as interest grows, the showing of the property starts and to hopefully serious prospective buyers of your property. You may have someone knocking on your door at just about any time because... well your house is for sale isn't it? These people are visiting friends on the street and were just driving by and saw your sign. Are you gonna just let these strangers walk through your house? You wouldn't allow just anyone access to you home... would You??? Can you ask the appropriate questions of someone standing in front of you wanting to just see your home? Where do they work? Do they have a house to sell? What's their combined income? How much Down Payment do they have? Can they afford it? Are they pre-qualified for a mortgage? Can their plans meet your closing date? How long have they been looking? Do they know the market conditions? Are they being honest with you? Are these the best BUYERS for your home? Will they back out at the last minute? ... and how much more you can imagine. Oh... OK, tell them to make an appointment. Eliminate The Deadwood!!! The process of elimination continues with more advertising, more screening, more qualifying and then more showings... sooner or later it is possible for someone to sell their property privately and maybe even get close to what was hoped for. All of this finally done, a sale happens and you wait only to find out at the end that the buyer can't close the deal because of some glitch on the financing, the title of the property or maybe the Buyer themselves. This actually happens!!! Bargoon City !!! There are instances when selling a property has been relatively an easy job, depending on a variety of things coming together. The seriousness of the people, whether or not the price is right, state of the current market, motivation of both buyer & seller, location, location, location, condition of the home and other details pertinent to the individual Buyer. Selling/Buying is a Process!!! A full time experienced Realtor can make the whole process appear so simple that you think anyone could do it. This is also true with doctors, architects, lawyers, car mechanics, pilots, electricians and plumbers. Do you even want to go there? The reality is, the majority of legitimate prospective Buyers WILL always prefer to deal through a Realtor because for the most part, they don't buy a house every day and usually haven't a clue where to begin. A lot of people feel they haven't the time to waste to do their own researching and even if they like your home are leary of the risks associated with buying privately. CAN I OR CAN'T I PRIVATELY SELL My House??? Sure you can. People can call the phone number, make an appointment and even view the house. Just be prepared for multiple viewings by the unscreened curious tire kickers and those who probably can't afford to buy your house anyway but still want to see it. Honestly, this also happens even when they get a Realtor to show them the house. The Agent just screens them before they get too far and only qualified Buyers are supposed to be looking at your house. At least that is what Realtors are all trained to do... aren't they? Hopefully for the private sellers sake, the lookers are just not casing the place for later more personal interest of an illegal nature. Thinking positively, eventually a prospective Buyer is found who IS, for all intents and purposes, qualified to make the purchase. Commonly, they will immediately discount the price by the prevailing commission rates in the area and chuckle to themselves that THEY are the one's saving the expense even though the Seller thought the same thing. Traditionally, the next step is crucial to both the Seller and the prospective Buyer They are ellusive, aren't they? Buyers that is. How are they going to determine value? The information is free to anyone at any real estate office and if both the Seller and prospective Buyer have done their homework, this part should be a piece of cake. Often, people will walk-in to a real estate office posing as either a Buyer or a Seller and within minutes have the low down on the general market in a given price range. The Realtor provided this information in good faith hoping to do some business with this customer who leaves with no intention of ever seeing that Realtor again. For your information, that scenario happens almost every day, in every real estate office across the country... across the continent. Armed with the local "stats", the prospective Buyer will sometimes try to knock the price down anyway, while making the Seller feel like a barterer in the bazaar who is peddling obviously overpriced and undervalued merchandise. CAUTION A Seller can successfully negotiate and smile at the same time and may verbally agree to something tangible. If this person is going to be the Buyer, the Seller should be very careful how and what is said at this point without giving away the farm. Before the Seller can change your mind the prospect now will rush to their solicitor to draft an Agreement of Purchase and Sale that will no doubt lean heavily in their favour. Upon the presentation of this document, the Seller would be wise to take it to their own solicitor for review. If the lawyer is doing their job, they would make the changes whereby the same paper now reflects Seller's best interests. The prospective Buyer now peruse the new terms and conditions of the counter-offer and the Sellers hopes they are acceptable. The prospective Buyer may indeed not know what the changes really mean legally so they in turn must take it back to their lawyer again for clarification. Sound familiar? Finally everyone agrees to everything and they all share a drink of the bubbly in celebration. IS THIS A GOOD DEAL??? Good thing the lawyers know the prevailing market condition in your area eh? Your lawyer will do all of this (extra) reviewing and changing of the Agreement for no charge... right? Everybody knows about the new municipal dump down the road don't they? That leak in the basement luckily didn't even show up in any of the Buyers viewings of the property. It will be their problem from now on... whew!!! Ya think??? How about the small heating oil spill from the underground storage tank you had about 4 years ago on the property and may cause an environmental disaster for your next door neighboUrs well, which is sure to happen a week after the deal closes. Did you happen to check to see if the company that holds your mortgage will let you out of it at all? If the mortgage has a penalty with a 3 to 12 months interest penalty was that also factored into the selling price or do you just eat it? Are you still liable for all the other interest missed if it says so in the document? How about the sales that just happened last night that may make your property's value worth 10% more now? Good thing the Buyer didn't find out about the property owners next door having an application in progress to park his dump trucks beside his house. It will probably be out in the open just in time for the closing. The Buyer is trying his best now to get all the funds together even though they didn't get approved the first time through. They love your house so much they just acted on impulse when they agreed to buy it. It's ok, if they can't close the deal they will just have to find something a little cheaper. It's a good thing the closing date is 5 months down the pipe. Let's hope the market doesn't drop in the meantime which could change the whole dynamic of this transaction. Minds can change, financial situations can change and personal tragedy can also effect the outcome of a transaction. Ask yourself, who would be responsible for misinformation, covering up or just oversights if you sell your house to these people and they come after you for compensation??? But not to worry... the lawyer is always there to combat anything serious that arises, even if it takes years and thousands of your dollars to fend them off. This is just a minute example of the hazards out there for both Buyers and Sellers alike who choose to try to wing a real estate transaction on there own. The fact is, even with a lawyer looking over your shoulder, the dangers are many. From a legal standpoint the lawyer is there to protect your interests but the current state of the market, prevailing buying/selling trends and comparable sales prices are just out of their bailywick. Good ones will admit that lawyers are not Realtors and for their own financial security may choose to defer that expertise to a Realtor. Those that don't risk the perils of being the only one left to sue when the time comes at the end of the day and we all know how that works out. The Bottom Line The bottom line is, a Realtor has a fiduciary duty to his principal to make sure all of those relative property details are the same as being representted. It is always better to nip a problem in the bud rather then let it fester into a nightmare for all that may effect a years of aggravation. Things To Note When these things come to the light of day, as they surely always will, a previous owner may still be held liable for the rectification or disclosure of certain information like latent defects in the home. A Buyer risks buying an un-saleable property and perhaps years of litigation with the seller to go after for damages and restitution. Failure for a seller to disclose negative aspects of their property that arise after closing the transaction may still be held liable for their non-disclosure. Just because a buyer doesn't close a transaction on time or at all doesn't mean that a Seller will pursue a court action... and win. The only way a real estate transaction happens is when there is a willing Buyer and willing Seller. Hopefully, with that, there has been a meeting of the minds. A Realtor has the responsibility to make sure all of those concerns are addressed and then carries Errors & Omissions Insurance to back themselves up in case something was overlooked by mistake. Everyone makes mistakes. The is no guarantee all is what it appears on either side of a transaction and each party is really only interested in their own situation. Therein lies the role of the professional experienced Realtor... to mediate and complete a successful sale to a win/win scenario, the majority of the time. Before you go down the FSBO road... make sure you are aware of the twists and turns, hills and valleys, watch out for the fallen trees, potholes, bandits and the washed out bridge at the end of the road. Caveat Emptor - Buyer/Seller beware Back To www.realestate1o1.com |
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