FSBO – For Sale By Owner – check list for Sellers
By Cliff Daniels – Broker
720 434 1418
Please find for your review a general check list for those persons that see the value of FSBO. If you are one of the persons reading this that has not sold their home FSBO, you will find this check list perhaps not only useful, but will also provide a better understanding of just what an owner is undertaking in the FSBO process.
The key reason I hear that Sellers determine that they are going the route of FSBO, and considerations:
a) The money saved not having to pay the Realtor a commission (of course, a Realtor can give you solid reasons why they earn their commissions) which can translate to:
b) Retaining more money in your pocket to
– Down payment for your next purchase
– Money to go for retirement
– Or simply, it is your home & equity, money you desire to keep
c) Key questions to ask yourself to execute a FSBO:
– Do you fully understand the necessary steps required in selling a home FSBO?
(overview coming to you below – this should help shed some light on the process)
– Do you have the time, and know-how to sell your own home FSBO?
The Internet is a great resource to get your education.
– Can you overcome the attachment that you may have with your home? This may come out during negotiations at offer e.g.
– Buyers will perceive a home for sale by owner as a potential bargain (at time of this posting, it is 2010, the 3rd straight year of what is termed a “Buyer’s Market” (which means, plenty of Sellers, not enough Buyers, and Buyers get to be choosey.)
– Do you have a resource of real estate professionals? This category will include an attorney, Title, appraiser (maybe), Inspector (maybe)
And, provided for your review, what follows is a FSBO check list. This is an outline, lacking in detail in some cases, so if you have any questions, please contact me directly for a no obligation response. Or post to the Discussion group at www.actprop.com for a range of responses to your query.
Ok, you have determine to sell your home FSBO. The first step of considerations often starts with:
a) Set the asking price:
– Do the math. Mortgage amount, home related bills, what is the net amount needed to clear the transaction without bringing dollars to the closing table?
– Does your property need any interior or exterior improvement? What are these costs? Should you hire an Inspector to do a thorough examination of your property?
– Competition and the comparibles of other properties on the market in the neighborhood, and local market. How does your property compare?
– Where your price can come from: a) analysis of comparibles from working the Internet and Public records, b) hiring an Appraiser, or c) hiring a Realtor to provide you the research.
b) Once price is determined, another review that the property is ready to bring to market in its’ best light. Interior is tidy (there are Internet resources of what a property should appear like for Buyers doing a tour, Exterior is ready, you will need:
– FSBO – For Sale sign – for out in front to advertise the property is for sale, and a contact phone number.
– Advertising – local newspaper, Craigslist, advertise in the FSBO section of the local MLS (multiple listing service) How are you going to get the word out that your property is FSBO. Also, per the Internet, for a fee, there are specific FSBO sites that will list your property.
– How will showings be set up for Buyers to tour? Should you be available at the property to answer any questions, meet the Buyers, and/or Buyer Realtor & Buyers?
– How to you qualify that the person/s coming to your property are authorized to do so?
– Are you in agreement with your spouse to co-op, which means that you are prepared to compensate a Buyer Broker Realtor a commission (%) for bringing you an offer/Buyer?
– Do you have, or ready to understand a Sales Contract? If you do provide a co-op, the Buyer Realtor will submit you a Sales Contract for your consideration.
– Disclosure Forms that should include: a) Property Disclosure, b) Lead Base (depending on when your home was built, c) Square Foot, d) Mold, e) Water Source
– Considerations to purchase a Home Warranty, the cost, and effectiveness of such a purchase.
All forms are available from your local office store, and or the Internet. Many sites offer for a low price a full FSBO package that contains all the forms you will need for a transaction. You may post questions you have re: the Contract and/or the Disclosure forms for more detail and information at www.actprop.com
c) Upon an Offer Extended – congratulations, you now have formal activity. The real fun is just beginning to sell your home.
If the offer came via a co-oping Buyer Broker,
– he/she will have you sign an agreement that they represent the Buyers, you will be providing % co-op commission, and submit an offer for a sales contract. In Colorado, there is no dual agency, he/she as a Realtor has a fudiciary duty to the Buyer/s they represent and must treat you the Seller FSBO as a “Customer”. The Realtor may provide transaction information, -0- advice.
– If a Buyer is not represented by a Realtor, communications will have to be determined who is executing the offer Contract. Good point in the process for Seller and Buyer to bond!
– Now you are at the phase of negotiations.
If there is a full price offer, -0- contingencies, you are of the lucky few that negotiations turned out to be quick, easy, and painless. Again, it is 2010, and a Buyer’s Market. Prior to your signing any Contract, or determining to Counter, the Contract is very detailed, please consider advice from an Attorney or a Realtor to review the Contract. This is a key area where FSBOs can go haywire. Lawsuits originate at this stage of the sale, primarily because Sellers are unfamiliar with the process, order, or ramifications of the Contract.
If there is not a full price offer and/or contingencies, please refer to the Key Questions to ask a FSBO Seller.
d) Upon Acceptance of an Offer – again congratulations, you are now “Under Contract” – due dates are now critical, do not miss a deadline, or you will be out of Contract, which could lead to additional ramifications. Key items in this part of the check list:
– EM / Earnest Money – which 3rd party will be holding? Title / Attorney
– Selection of closing: Title or Attorney
– Understanding and review of the closing process. Closing terms, execution of Contract dates, need/agree to Amend / Extensions, is financing on track and realistic for transaction and Buyer to execute?
This is a short version of a check list for Sellers considering executing a FSBO. If this is not enough detailed information, or you need to ask a specific or range of specific questions, please feel free to contact me at:
cliff@actprop.com or better yet for a wider response:
www.actprop.com in the feedback/discussion section
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