Sunday, May 27, 2018
The Pitfalls of the For Sale By Owner
1. So if you are a For Sale By Owner watch out for Open House viewers.
This hasn't been my only incident. I have also had people go in back rooms and unlock windows, things come up missing after an open house and the list goes on. An agent's sign at a minimum, does let the prospect know that a professional is inside, they may or may not be alone and that many people know where they are and what they are doing.
2. How will you do your contract when you get a buyer? Will you go to Office Depot and purchase a real estate contract? Be ware, Office Depot's and the like, are not just in Alabama, they are in most every state. Yes, they will have a very generic contract but it may not be state or county specific. You may need an attorney to review your contract. There will be things not covered on this contract that need to be addressed. Does this contract address how taxes are paid in your state or county? How about an inspection and how long does the buyer have to get the inspection? Once they get an inspection, how long do they have to let you know how it went? Will you get a copy of the inspection? How long do you have to respond? When is closing, who are you closing with, who pays for title, who pays for title insurance? Does the buyer know what it is going to cost him to close? On and on.
3. Inspections: Maybe your buyer doesn't want an inspection. After all they are friends with aunt so and so and they know you took good care of your home. Well 2 weeks later the roof leaks and they say you knew it and didn't disclose it. Well, so isn't Alabama a buyer be ware state? Well yes it is but if you didn't encourage them to have an inspection they may think you were trying to mislead them ...so they say, and who would know. As a realtor, I must advise them to have an inspection and if they don't want one that is fine but they will sign a form saying that I have advised them against buying without an inspection
4. What about those closing cost? Does your buyer know what it is going to cost them to close? As a realtor, I am required by law to give them an "estimate" of closing. You as a for sale buy owner wouldn't be. But when they get to closing will they be able to close? Did they know their loan would cost them x,xxx.xx? What about the taxes and escrow account? Did they know they had to set that up? The lender will probably give them all this info but have they applied? Are you taking your sign out of the yard without a pre approval letter? What is the difference between a pre approval and a pre qualification?
5. Earnest Money: Did you get earnest money? Who is holding it? What are the rules? In the state of Alabama, as a Realtor, it is held in a trust account until closing and once there is a ratified contract the earnest money cannot be returned to either party without the written consent of both parties.
6. When are you moving out? Are your buyers doing a final walk thru? Are you going to move out before closing? Or at closing? Are you going to have your buyers sign a form saying they are accepting the home as it is at that time? Do you have that form? Maybe you should ask the attorney to draw one up for you $$.
7. Are you staying past closing? Hmmm. Is your home insured? How about the contents? What if someone gets hurt? Will that fall on you the seller or the new owner?
8. What if your heat and air stops working the day before closing? Should you fix it? Normally that is covered in the contract and the owner would fix it up until closing. What if it stops working as soon as the new owner returns to start moving in? Are you covered for that? What does your contract say about that?
9. If you have a dispute arise, who will you turn to? Will you be left to hash it out personally with your buyer or will you have a realtor to help you sort through those misunderstandings?
10. So many things can happen in today's world with a real estate transaction. Keep it simple. Hire a Realtor.
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