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What every For Sale By Owner (FSBO) must know:
There are several matters that you must consider when selling real estate. Obviously, it is perfectly legal to sell real estate that you own without a license. In fact, selling your own home by owner (FSBO) may very well be the best solution for you. It will save you money in that you will be saving the commission that would otherwise be paid to a real estate agent. However, before you decide to go it alone, there are other considerations to take into account. There are many disclosures that are required by law to be furnished, in writing, by the seller to the buyer. Not all homes require the same disclosures. If you should omit just one of the legal disclosures, it could cost ten thousand dollars or more. In this case, not only would you be losing more money than what would have been paid in commissions, it will cost you the sell of your home.
Beware of anyone offering to list your home on the MLS for a fee. Many believe there is only one MLS and that is not the case. Anyone can start up their own “MLS” webpage and market it to FSBO’s for a fee. Some are better than others but the question you should look into is how easy is it to find on the internet and how many visitors will actually see your listing? The MLS used by real estate agents are ONLY for real estate agents. Although there are several agent MLS’s around the state, the one used in the midlands of South Carolina is called the Consolidated Multiple Listing Service (CMLS). The public can view some of the listings and content on the CMLS but only agents can list homes for sale on the CMLS.
A common mistake by many FSBO’s is not doing a settlement statement before they accept an offer from a buyer. In many cases, the FSBO thinks they will get one amount at closing to find out they will actually get much less. Often, the seller has to bring money to closing because the proceeds of the sell is not sufficient to pay off the mortgage, liens and other fees. In fact, the seller may find themselves in default because they don’t have the money to close. Be sure to have your attorney draft a settlement statement before you accept an offer so you will know for sure what you are agreeing to.
Be prepaired to have buyers as well as those that have no intentions of buying, (rather, they just want to look at you home) knocking on your door at all times of the day, evening and weekeds. I suggest you only show your home to buyers that have already been “pre-approved”. Make sure they provide you with a written copy of the approval. Make sure it does not say “pre-qualified”. Only buyers that have applied for a loan can get pre-approved. Pre-qualified means nothing because they have not applied for a loan and none of their information provided to the lender has been verified.
With all the above said, would you take out your own appendix? You can do it yourself, but more times than not, it may not be successful. There is a reason real estate agents have to get classroom training and pass a state exam. There is so much one needs to know before attempting anything with so much money and time at stake. I have not helped a FSBO yet that did not think they could sale their home alone. The problem we all have is that we never know what it is we don’t know! It’s what we don’t know that causes significant problems in selling a home.
The last thing to be aware of is that the attorney closing your transaction is only doing the title search and preparing the paperwork required to convey your property to the buyer. The attorney does not check or ensure that all legal disclosures were made. That is all the responsibility of the seller and the buyer.
If you would like to sell your home yourself, feel free to contact me if you have any questions or concerns. I will be glad to assist you in any manner I can without any obligations on your part.