For Sale by Owner (FSBO) Demystified
Thinking of selling your home without the assistance of a real estate agent? While the For Sale by Owner FSBO isn’t for everyone, it can be a great way to reduce the overall cost of selling your home and making sure that you are in control throughout the process.
The internet has changed most things, and the process of buying and selling a home is certainly one of them. With online tools like Zillow and Trulia, most buyers are finding homes they like themselves, and these sites have made posting your home online simple.
Further, in many markets, including southeast Michigan there are now more buyers than available homes. The hot real estate market has put sellers in a great position.
While the FSBO process should be a consideration for most sellers who want to cut out large real estate commissions, you should be prepared to do a little work. The FSBO process breaks down to three general steps; 1) marketing your property, 2) selling your property, and 3) closing the sale of your property. We will dive into each bucket below.
Step 1 - Marketing your property:
As mentioned above, marketing your property thanks to the internet has never been easier. The marketing step typically breaks down into 4 unique areas.
1) Preparing your home: This step is simple but can be one of the more time consuming and requiring a little elbow grease. Simply put this is the process of cleaning and decluttering your home. When a buyer walks through your home, the closer to move in condition the better.
2) Price it: You want the best price possible and the best way to ensure that this is achieved is through a little detective work with free online tools and perhaps hiring a licensed appraiser to assist.
3) Create a Listing: This is the process of taking pictures and doing a writeup of your home. For creative people this is easy and for others it can be challenging. There are sites that can assist with this.
4) Posting your home: With free sites like Zillow, this step has become simple. While Zillow is the leader consider posting on other sites like Facebook. You can also pay to have your home posted with FSBO sites and the MLS (note you then will be required to pay a buyer fee with MLS). Also, while it sounds old-fashioned, posting a sign in your yard continues to be one of the best ways to market your home.
Step 2 – Selling your property:
Now that you have completed Step 1, and the phone is ringing with qualified buyers it is time to move to the selling step. In almost all instances, this is where you want to hire an experienced real estate attorney to assist with this process.
This is an important step and will typically include 1) satisfying your seller disclosure requirements, 2) negotiating a purchase agreement (contract), and 3) re-negotiating as necessary to satisfy any buyer or seller contingencies.
While a main goal of selling your property FSBO is to cut out the transactional cost of selling your home, this is not an area that you want to cut out. Every word in a purchase agreement or seller disclosure form is meaningful and the best way to property allocate risk is with the hiring of an attorney.
Step 3: Closing your home:
This is typically both sides favorite step of the FSBO process for obvious reasons. Working with a good title company makes this process, most of the time, very simple. The title company is doing a lot of work in the background, but typically very little effort is required of the seller or buyer during this step.
It is a good idea to have your real-estate attorney review the closing documents before singing and make sure that you are asking questions during the process.
Do I Need an Attorney?
Selling a home is a complex process with lots of paperwork and legal complexities. If you have chosen to sell your home independently, an attorney can provide you with as little or as much legal support as you need to complete your for-sale-by-owner transaction. A lawyer’s main concern should be to help you complete the transaction appropriately and minimize any liabilities in the future through negotiation, litigation, or alternative dispute resolution.
A bit about us – Matt Devitt Law is a full service real-estate law firm located in Livonia, MI. In addition to real-estate we also provide legal counsel for small businesses and off a full suite of estate planning services as well.
We work with our surrounding communities including Livonia, Northville, Plymouth, Novi, Farmington Hills, and beyond. Our focus is on providing pragmatic value-based solutions for your estate planning, small business, and real estate legal needs. Give Matt a call (734) 335-0713 for a free consult.