Wednesday, February 02, 2005

Are You Up to The Task of For Sale By Owner?

Whether you are considering selling your home yourself, or are looking to purchase a home specifically marketed as For Sale By Owner (FSBO), you may have a rough ride ahead.

In San Francisco, there is no denying that it continues to be a seller's market. Within certain price points, some properties are on the market less than 30 days. Considering this, how hard would it be to sell the home yourself and save the commission money that would otherwise go to your agent? Let's look at the challenges facing the seller.

First of all, prepare to be annoyed. Once you have advertised your home as For Sale By Owner, interested buyers will not be the only ones calling you. Some real estate agents prey on FSBO's as their life blood; your phone will most likely ring off the hook with the hundreds of this type of agent attempting to represent you.

The second challenge to FSBOs comes in the details of working through an offer. Never accept a verbal offer. When you receive a written offer, is it presented on a viable contract that will stand up in the court of law? Do you understand what contingencies are set into place, do you know how to properly work through a counter offer? Can you verify the finances of the other party?

The final challenge of FSBO comes when you plan to work through an escrow. Escrow officers require instructions, documents, releases, approval from both parties to move forward to closing a transaction. Being in unfamiliar territory here will stall the deal, if not kill it all together.

On the seller side of a FSBO, one last caution: working without an experienced real estate agent leaves you open to liability. Buyers who think they didn’t get what they paid for will be quick to sue for damages. If you end up liable for damages, the payout could far exceed the amount you would have given to a licensed real estate agent to market your home in the first place.

If you are a buyer considering purchasing a For Sale By Owner, you have an equal amount of diligence and hard work to own on your side:

1. Never extend a verbal offer; use a Contract for Purchase that will be recognized in a court of law to protect yourself;

2. Require the owner/seller to provide you with a Transfer Disclosure Statement (TDS). This alerts you to all the known defaults in the property;
3. Inspections, inspections, inspections! Know what you’re getting into and how much any repairs will cost, and used certified licensed inspectors;
4. Make sure the title is free and clear;
5. Keep a log of all your conversations and get all agreements in writing.

More questions about For Sale By Owner? Questions about selling or buying a home? Contact me today for honest, experienced answers.

Amy Blakeley, Realtor®
ablakeley at mcguire.com
(415)296-2173 Direct



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