ForSale By Owner, or FSBO, is a growing trend in American real estate markets. It is the process of selling real estate without the representation of a real estate broker or real estate agent.
The primary reason why homeowners choose to sell their house without an agent is to avoid paying an agent’s commission. In Virginia, an agent’s fee is on average six-percent of the total sales price of the property; on a $400,000 home, that’s about $24,000! If you decide to forego the assistance of a real estate agent, you need to thoroughly understand the ins and outs of real estate negotiations. Now is not the time to become cheap. If you don’t hire a real estate agent, at least hire a real estate attorney. A real estate attorney will usually only charge a fraction of the fee that a real estate agent would charge for drafting and reviewing your sales contract.
As the real estate market continues to rebound, many homeowners are still finding it difficult to make money from selling their homes, which is why selling FSBO can be appealing. Not paying a six-percent commission means more money from proceeds. However, it’s not as easy as it sounds. If you decide to sell your home FSBO, you should at least hire an experienced real estate attorney to help you review the negotiation process. If you decide to sell FSBO, there are 5 things you should know.
1. Pricing: Agents typically provide a pricing estimate based on the property and their knowledge of current market values by providing “comps. A homeowner who wants the knowledge and experience of an agent (without the cost) should hire an independent appraiser to provide these pricing estimates.
3. Marketing: Agents have access websites such as Realtor.com and MRIS.com, which are major databases buyers/agents use in their search for a new home. Without an agent, a seller may not be able to easily list his property on these prominent websites. However, sites like Craigslist and print newspapers may help FSBO sellers adequately market their homes.
4. Negotiations: Sellers, especially in today’s market, have to be prepared to hear low-ball offers from their prospective buyers. They have to know how to be strong negotiators and how to walk away from bad deals. Some homeowners over-value their property because of sentimental attachment. It is important to know what your house is really worth, and walk into negotiations armed with your lowest acceptable offer and your aspirational offer.
5. Legal Considerations: Contracts, title inspections, disclosures, escrow, settlement…these are just some of the legal aspects involved in home sales. Most real estate agents have nothing to do with the relevant paperwork, rather, the sellers communicate directly with the attorneys to handle these matters. However, agents can help sellers avoid potential litigation. Realtor Judy Moore was quoted recently in the US News and World Report for saying: “There are all kinds of liability issues that a seller could potentially face when…dealing one on one with a buyer. A homeowner could, for example, tell a potential buyer that hardwood floors extend to all corners of the house underneath the wall-to-wall carpeting. But if even one room has cement flooring, the homeowner could be sued.” A seller without an agent should consider potential liabilities, and even consult with an attorney prior to advertising the house to ensure a clean transaction.
If you’re looking for an experienced Virginia real estate attorney or real estate lawyer, contact Keithley Law, PLLC, PLLC today by calling (703) 454-5147and schedule an initial consultation in our Fairfax law office.
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