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For sale by owner or FSBO is the term used when an owner sells their property without hiring an agent or a broker. They are committed to dealing with home buyers directly.
There are many reasons why a homeowner may want to hold their sale by owner without the services of a commissioned driven real estate agent. Homeowners who choose to sell on their own, handle most of the selling process, from listing the home and showing it to prospective buyers, to negotiating their deal.
While a homeowner may be comfortable with the selling process, the transaction is still regulated by state law that compels legal complaince and adherance to real estate rules and regulations. In a For Sale By Owner transaction, the seller assumes all of the responsibilities and legal risks of completing the sale with buyers. It also requires the coordination with third party vendors that include, but are not limited to title companies, home inspectors, surveyors and real estate attorneys.
Real estate attorneys regularly handle purchase transactions. They create the purchase documentation, ensure legal compliance, and generate and / or review purchase closing documentation. Seasoned attorneys not only bring their legal expertise to a seller’s transaciton, but should also bring their practical real estate experience to the transaction.
The attorneys at Soble PLC have been responsible for close to $4 billion in real estate and mortgage transactions over the past 30 years. We know how to prevent against the various legal and sales pitfalls that can interfere with your goal of selling your home.
The Pros of selling a house without a commissioned real estate sales agent.
There are definitely advantages and disadvantages to selling a house without a Realtor. Here are a few of them:
The pros of selling your home without a real estate agent:
1. Selling by owner will save you money. A seller can save thousands of dollars in commission fees by not hiring a real estate agent. Generally, real estate commission equal 6% of a home sale:
A 6% commission on a $100,000 sale costs the homeower $6000.
A 6% commission on a $250,000 sale costs the homeower $15000.
A 6% commission on a $350,000 sale costs the homeower $21,000.
A 6% commission on a $500,000 sale costs the homeower $30,000.
2. Your home may sell quicker. The NAR admitted in a recent survey that FSBO homes sold more quickly than agent-assisted homes. The NAR says 77% of FSBO homes were sold in two weeks or less, but that’s usually because the seller knows the buyer. (forbes.com)
It stands to reason that with no commissions to worry about, a Seller can ask a lower price and the buyer can get a better deal. However, there are some studies that show that working with a real estate agent actually secures a higher sales price.
The Cons of selling a house without a commissioned real estate agent.
Besides having to be patient with listing a home and dealing with prospective purchasers when showing a home, the biggest “con” against selling a home by owner is that the seller must make sure that they are in full compliance with state law. After all, real estate transactions are regulated by contract and real estate law. Sellers must be informed on how to coordinate the closing with the buyer.
As real estate attorneys, Soble Law handles these two points of frequent seller concerns when selling a home for sale by owner.
Listed below are resources for a seller contemplating selling their home on their own. The resources are free. Feel free to contact us at 888.789.1715 or at firstname.lastname@example.org to further speak on any questions that you may have about the home sales process and the related legal issues involved with this process.
Remember, only attorneys can provide legal opinions on the effects of a contract provision found in your purchase agreement; real estate sales people and title people are not attorneys and cannot provide legal advice. Call us at 888.789.1715 BEFORE you sign!
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A Word About “For Sale By Owner” Transactions
Frequently Asked Questions
Top Questions Concerning FSBOs.
Don’t wait -avoid a legal mess before you sell – call us today!
Does a purchase agreement always need to be in writing?
The Statute of Frauds requires that for a purchase agreement concerning real estate to be enforceable it must be in writing. Leases that have less than a one year term are the exception.
Is it required by law or is it just customary practice for the seller to pay the title insurance for the buyer?
It is purely customary. The parties can negotiate what closing costs and expenses they will be responsible for.
I signed a purchase agreement and was approved by a mortgage company, but now I want to opt out. What are the consequences?
First, your rights and remedies are spelled out in the provisions of the purchase agreement. No one can tell you if and how you can stop the process without first reviewing the documents. Second, do not feel bullied by any mortgage broker or agent to complete a transaction without first speaking with a competent real estate attorney. You may be able to “back out” of your deal, but not without first reviewing the transaction documents.
I signed a Non-Disclosure agreement ("NDA") and Purchase Agreement for a commercial building and now the Landlord/Seller is telling me not to deal with the real estate broker. What do I do?
It depends on what the Non-Disclosure Agreements says. Usually in a commercial brokerage agreement there will be some provision dealing with Non-Circumvention of the broker.
Once listings or buyers agreements are endorsed with a broker, the signor may be obligated for a sales commission even if the broker was not directly involved with the final transaction. You will need to provide the documents to a competent real estate attorney for further review to determine what your obligations and options are.
The ad for the property said the lot was 426' x 215', but that it would be redrawn to 500' x 250'. After the Purchase Agreement was signed the lines were surveyed at 395' x 220'. What can I do now?
So the legal description/lot size was misrepresented in the home listing. Unless you made the listing document itself as part of the purchase agreement, it cannot be relied upon, and the seller is not liable to you for the stated lot size. You did your due diligence by having the property surveyed. There should be a contingency period in which you can either move forward or cancel the transaction. You should also have your earnest money returned or if you determine if the price is appropriate for the lot size, you have the option to move forward.
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"l was a client of Mr. Soble and he was very pleasant to work with and he took my case right away. He took time to answer all the questions and concerns that l had. When l called him, he got back to me that same day. We settled on an offer, and then received our check in a timely matter. l recommend the Soble Law firm for all your real estate needs because they take care of business."
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