Selling home FSBO and may have offer?

[Fermion]

My wife put our house out there Friday and we had someone interested Saturday. They came over (nice young couple kind of like we were) and were excited about the house and of course the river we live on (nice sunny day too!). They called that night and came over again with their real estate agent and are putting together an offer! I liked them so much I am tossing in some items I don't feel like selling (tools, pool table, poker table, riding lawn mower) which really made their eyes light up.

So...when the offer comes in tomorrow assuming it is for full price (minus I guess the 3 to 3.5% we would need to pay the buyer agent?), do I take the offer to a real estate attorney or what is the next step there? I know they will need to do an inspection and all of the other stuff, but they are pre-approved for a conventional loan and we have made clear several areas of the house that need work.

Fingers crossed here and my wife rocks for selling the house in one day if this goes through. I am so ready to get in our RV and get on with retirement!

 

[harley]

I'm interested in this too. I have a chance to sell my Mom's place without an agent. Don't know if it will happen, but it would be cool to bypass the establishment.

 

[RunningBum]

You're doing a FSBO without a clear understanding of the process before you put it on the market? Do you have a sales contract drawn up?

 

[Ready]

It may depend on what state you live in. In California, you could just hire an escrow company to oversee the paperwork. Since the buyer is represented by an agent, they will probably have a preferred escrow company they wish to use.

It may differ in your state though, as not every state uses escrow companies.

 

[harley]

You're doing a FSBO without a clear understanding of the process before you put it on the market? Do you have a sales contract drawn up?

In my case it was someone approaching me about the home before I was ready to put it on the market. Just a fortuitous opportunity.

 

[Fermion]

You're doing a FSBO without a clear understanding of the process before you put it on the market? Do you have a sales contract drawn up?

Hey, it was my wife's idea. I wanted to use an agent but remember on that other thread where the wife is always right.

I thought we would have a few weeks to research more before we got a nibble.

 

[Fermion]

It looks like in Washington state you do not need an attorney as a seller.

I think I would at least like to hire one to finalize the contract but perhaps for the initial review of the buyer's offer it is not needed (especially if things are straight forward and no big demands or negotiations).

 

[RenoJay]

When I FSBO'd a house in IL I used a real estate agent.


Sent from my iPhone using Early Retirement Forum

 

[harley]

When I FSBO'd a house in IL I used a real estate agent.

Doesn't that sort of defeat the purpose? Or did they charge a fixed fee to do the paperwork instead of taking a big percentage?

 

[DrRoy]

You might see what a real estate lawyer's fee would be and then decide. Definitely need an escrow company. You can probably find guidance and sample contracts with an online search.

 

[Texas Proud]

Not sure about your state, but here it is all an agreement on what to do...

My sister sold a boat slip and they just used a title company to do the closing... no attorney on either side... there is a standard contract out there that you check off the boxes you like and put in the conditions you want and that is it...


BTW, you do not have to pay the agent.... that is their agent and you can make them pay... you accept whatever price you want... and if you want to pay the agent then bump it up by that amount...

As an example, for the sale of the boat slip, the agreement was the buyer pays everything... my sister got all of the sales price less her portion of the years taxes....

 

[savory]

A couple of questions: 1) Why do you owe the buyers realtor anything? I used a FSBO company and in my 'offer' I set a % for the buyers agent. But that was set up front. I set 2% thinking a buyers agent really did not do the work of a selling agent which in our area is 3%. If the agent brought the buyer to your house without that agreement, than you do not have an agreement. It would be nice if you paid the agent something but I do not believe you are obligated (note: I am not an attorney) 2) Look into the real estate regulations to see if the agent must/will represent both of you equally - a transaction agent. In which case, you could negotiate the commission or or flat rate cost with the buyers agent to also represent you. If the agent is not willing to accept your offer, you can call another agent or attorney and negotiate a price to help you with closing documents.

 

[sunsnow]

Be careful. Right now in my town, FSBO sales are earning less for the owner than those that sell through a realtor--although that doesn't need to be the case. What is happening is that the owners don't realize that the market is in a buying frenzy and that houses are selling for way over list price. The only good deals right now are FSBO's, because the owners are listing at what they see the other list prices as being, and then accepting a full price offer. They feel great, but if they had promoted the house (with a realtor or by themselves on sites like Zillow), and held a couple of open houses and then reviewed all their offers, they would have made a lot more. As a buyer, I feel guilty for even putting this out there...

 

[travelover]

Be careful. Right now in my town, FSBO sales are earning less for the owner than those that sell through a realtor--although that doesn't need to be the case..........

Saw this happen next door. Neighbors sold a place for 10X what they built it for 50 years ago and thought they made a killing, but probably left 100K on the table. It is worthwhile to get a realistic appraisal to be sure of the value.

 

[Fermion]

Thanks all for the advice and info, keep it coming (if you feel like it I appreciate it). I know a lot about stock option strategies but not much about real estate. I know we priced the house below market but I can't take another Seattle winter and a quick sale puts us in the Florida Keys with our sailboat that much sooner.

You might see what a real estate lawyer's fee would be and then decide. Definitely need an escrow company. You can probably find guidance and sample contracts with an online search.

Why do we need an escrow company? I am not arguing, just asking. We don't have a loan, but won't the buyer use an escrow company and we sign there?

 

[kneehigh]

A couple of questions: 1) Why do you owe the buyers realtor anything? I used a FSBO company and in my 'offer' I set a % for the buyers agent. But that was set up front. I set 2% thinking a buyers agent really did not do the work of a selling agent which in our area is 3%. If the agent brought the buyer to your house without that agreement, than you do not have an agreement. It would be nice if you paid the agent something but I do not believe you are obligated (note: I am not an attorney) 2) Look into the real estate regulations to see if the agent must/will represent both of you equally - a transaction agent. In which case, you could negotiate the commission or or flat rate cost with the buyers agent to also represent you. If the agent is not willing to accept your offer, you can call another agent or attorney and negotiate a price to help you with closing documents.

When you're doing FSBO, you don't have representation. If you neglect to disclose something as simple as the roof making loud noises when it's exposed to summer heat, you could be sued. However, when an agent neglected to disclose when he knew about it, he might be responsible for the mistake. Believe me, there are lots of pitfalls that even agents fall into.

You can do it by yourself, but you just have to be careful to do your homework.

When a seller employs a broker for a negotiated commission, that seller is actually paying commission to the seller agent as well as the buyer's agent. I don't want to get into agency and fiduciary relationship, but it's a complicated relationship.

I'm assuming the buyer did not sign a buyer's contract with the buying agent. So, who does the agent represent? He represent's no one's interest except his own. I wouldn't be surprised if the employing broker doesn't tell his agent to get a contract from the seller and then the broker would have to represent both parties. The agent/broker would have both of your interests in mind for a NEGOTIATED fee of say, 2% (since he didn't do much to find buyer and seller).

Anyway, you could do it solo or you can hire a good agent/broker to represent both buyer and seller to take care of the contract, escrow, etc... This would work in California.

 

[kneehigh]

Why do we need an escrow company? I am not arguing, just asking. We don't have a loan, but won't the buyer use an escrow company and we sign there?

If you have to ask, you need one. At least in California, it's common practice to use one escrow company for both the buyer's and seller's property transaction. They along with your agent, keep track of everything that needs to be processed and keep in contact with the loan officer, title company, appraiser, inspectors and manage tons of papers like closing estimates, etc. You will not be able to do it without their skills and expertise, or you'll have a tough time anyway. Selling real estate property is not like a transaction that happens on craigslist. It's slightly more complicated.

 

[sunsnow]

Thanks all for the advice and info, keep it coming (if you feel like it I appreciate it). I know a lot about stock option strategies but not much about real estate. I know we priced the house below market but I can't take another Seattle winter and a quick sale puts us in the Florida Keys with our sailboat that much sooner.

Even so, you may be able to sell quickly and still get top dollar. Go to Zillow and set the filter to "recently sold". For houses near you, look at the "price history" section and you will see when they were listed, how much listed for, and what they ended up selling for. It's a long time until winter

 

[harley]

Even so, you may be able to sell quickly and still get top dollar. Go to Zillow and set the filter to "recently sold". For houses near you, look at the "price history" section and you will see when they were listed, how much listed for, and what they ended up selling for. It's a long time until winter

Heck, wherever it is that Hermit lives, it's still winter.

Before I gave a price to the guy who may buy my mom's house, I had three RE agents run comps for me. I offered to pay them to do it, but they all did it for free. I put the price in the middle of all their estimates. Of course, there are very few comparable properties out there that have sold recently (boonies and riverfront), so it's pretty much a guessing game. I'm curious as to what a appraiser for a loan will come up with. I do know the property taxes increased by 50% last year. And I'm going to sell it "as is", whether it's by owner or through a realtor. I'm not trying to hide anything, I just don't want to have to deal with doing repairs and such.

 

[haha]

My wife put our house out there Friday and we had someone interested Saturday. They came over (nice young couple kind of like we were) and were excited about the house and of course the river we live on (nice sunny day too!).

Is your house in a flood plain?

If so, the disclosures can get tricky. One might think anyone with eyes would realize that it would be a rare NW river that doesn't flood, but it may be something to think about.

I just did the schedule D for my 2015 return that will list the place I sold in December. So happy to say goodbye to that, though we were very happy there. Country living is so much more demanding, and unless the place is cheap to buy, more expensive too.

Ha

 

[MRG]

We did two different deals, no realtors involved. Think we borrowed their forms and had an attorney review. There was a title company(IIRC) that did the rest for the normal fee.

Both were unique situations where a realtor couldn't add value. The second was a bizarre deal; folks came out to look at something DW had on Craigslist and before the day was over we had verbal commitment to buy the property! We had done the research on the price to ask as we were looking to move, we weren't going to sell until we found a place. Worked out well in the end.

 

[Earl E Retyre]

We purchased a home and the seller nor buyer (us) used a realtor - instead we hired a real estate attorney. That saved the seller 6% in realtor fees (which allowed the seller to sell us the house for less than we would have paid had we used a realtor). The real estate attorney cost less than $300 and drew up a standard contact. We had bought and sold a lot of houses in our lives so we felt comfortable doing so and understood the process.

 

[NgineER]

Find out where closing takes place for normal transactions.

On the east coast where we lived in a tiny state and sold a property on the MLS without a realtor. All closing a in that state took place in attorney's office.
In Minnesota, all closings takes place at a title company's office.
Don't know what happens in WA.

Good luck!

 

[MichaelB]

You're doing a FSBO without a clear understanding of the process before you put it on the market? Do you have a sales contract drawn up?

This was my first thought. Fermion needs a crash course in FSBO, and would probably benefit from hiring an experienced real estate attorney.

 

[Fermion]

This was my first thought. Fermion needs a crash course in FSBO, and would probably benefit from hiring an experienced real estate attorney.

Well, my wife did it, not me (put the house up FSBO). We did get the offer today (expires Tuesday) for our asking price but the buyers agent wants us to pay a 3% commission (even though they are working for them, not us). I am ok with this but am worried about having to also pay an attorney, title insurance and other costs (1.78% goes to WA state excise tax..it adds up).

I wish we had just listed with an agent, then they would be making all of these decisions and we would only be out another 3% max. But the wife is always correct, right?

So now I am trying to muddle through all of this.