Selling FSBO - need contract help fast!!

17 years ago

I was hoping that someone here would be able to guide us through an fsbo contract signing. We had someone just "show up" at our door step and ask us if we were planning to sell our home. We are actually starting our build and wanted to put our house in the amrket in about 4-6 months or so but couldn't let this opportunity go (esp with the realtor commission savings).

Well, they liked our home and neither of us is familiar with the fsbo process. We have called a few titile companies and have gottena contract form to sign. We plan to sell them the home and then lease it back from them for about 10 months. The purchase price, rent, appliance and window covering inclusions have been agreed upon. My questions were around the meanings of these items in the contract form:

I would rally appreciate it if someone could comment. We wanted to try and staya way from the lawyer's fees but if this starts getting complicated, we'll just do that. Thanks.

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Comments (14)

akkw
17 years ago
I hate to say it, but I would never sell FSBO without enlisting the help of an experienced real estate attorney. Best of luck to you - hope others can offer more specific help.
C Marlin
17 years ago
I can only recommend that you, today, contact an RE attorney to review your contract. Unless you are very experienced, an attorney will be worth the small fee.
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We sold some acreage FSBO recently. We actually got more for it than what a local Realtor suggested we should list it for. We not only sold it for more than she suggested it would bring, but saved by not having to pay her a commission. Here is what we did. We had the land surveyed. That was an absolute necessity since we were subdividing a larger piece of property. I took lots of photos of the land. Then I put up a web site listing everything good about the property. I put about 30 photos on the web site, all carefully captioned. I had the price on the web site, along with contact information. I posted the land on craigslist frequently, rotating cities where I felt potential buyers were likely to live. I always included a link to the web site. I was very careful to use key words that I expected potential buyers would be likely to use as search terms. I also posted the link to city-data.com's free for sale forum. That forum is fully indexed by Google, which will help increase your FSBO web site's Google page rank, if you do it right. Craigslist's embedded links are not followed by Google, so you can't boost your page rank that way. I built a large wooden sign, about three feet by four feet. I painted it white and used large black letters that said in essence, ACREAGE FOR SALE and gave the phone number. I placed the sign where it could be seen by drivers passing in either direction. I see lots of FSBOs with unreadable signs. For a driver to be able to read a sign at speed, it must be large, boldly lettered, and have a simple message. The combination of the web site, the craigslist postings, and the sign brought in quite a bit of traffic. We had more showings than the fellow down the road who had his property listed with a Realtor. In the end, we ended up selling the property to someone who heard about it by word of mouth. However, they did study the property via the web site once they heard it was on the market. There are two things we did not do that were mistakes. We did not get an appraisal. We felt we knew what the property was worth, so we didn't bother. However, an appraisal would have been a handy marketing tool. The other thing we did not do, which caused quite a bit of a headache for us, was to not have a contract available for the buyer to sign. Instead, we used the buyer's attorney. It turned into a bit of a mess, as the attorney went nuts and produced a contract that was, to put it mildly, absurd. It took several weeks to get past that. The next time, we will have a simple boiler plate contract in hand.
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Good for you that you get to keep 80%...but I'll bet that 99% of the time is off the 50% commission. I would get approx.1%- 1 1/4% off a 2.5%-3%, it being a full 5%-6% commission. Then there were ALL the bills...the NAR, the local, the websites, ....the cont ed....etc. THAT ate a lot of the money. My point is that the consumer can get the best help while NOT paying a whopping 6%. Ummm, yeah, the realtors BOYCOTT FSBOs. I doubt that my experiences were unique...An example: as a buyer wants to see a FSBO, the realtor tells them that the FSBO house is a bad house(unless they pay a commission)...low and behold as soon as the FSBO gives a listing to a realtor, the house becomes "a gem" lol "And do you really think a buyer is going to pay $50 / showing? I showed a buyer 10 homes the other day..." buyer, seller how ever you want to structure the system. But see? If you got paid $50/per showing you would have $500 in your pocket, and YOUR time would not have been wasted. Only serious people would ask to "have the doors opened for them". The 2 things that many sellers need help with is showings and negotiations. The rest is paperwork and babysitting. Oh, the elderly may need online marketing help. If I were to pay 6%, I would EXPECT the realtor to take over the sale of my house completely. That means, stage, clean, WORRY about getting the best price, and actually negotiate THE BEST price for me, and not their commission. For 6% I want to be in Tahiti having Margeritas, while the realtor has "my headache"...lol
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quirkyquercus
17 years ago
I agree and as much of a royal pain in the butt it is to move twice, If it were me, I'd want to wash my hands of the existing place and short term renting an apt or something until the new home is ready. You might get gouged on the lease rate from the buyers.
talley_sue_nyc
17 years ago
You won't have to pay that much, I bet, for a lawyer to help you on this. Especially since you're asking the meaning of terms on a contract, I don't think you should rely on laymen, no matter how well-meaning and experienced they are. And especially not ones on an Internet board like this, bcs you have no idea how well-meaning and experienced they REALLY are.

And congrats! This sounds like a great opportunity. For one thing, if your buyers are sort of "fishing" like this, they may not be in an urgent need to move, and maybe they can wait the few months you need. I know we were able to, when we bought--we saw the place on Superbowl Sunday, and closed on August 1.

Why are you selling now? Do you need the cash from the sale? Couldn't you both just sign the contract now and set the selling day way out in front? You could even clear all contingencies, as early as you both like, and then you're both committed, no backing out and so no risk--but you just have to wait.

that's what we did. We did inspections, approvals, contract, etc.--and then the only way we could have backed out would be to lose our deposit. And we had a relatively big deposit--$10k, I think.
rrah
17 years ago
I think you need to bite the bullet and pay an attorney. We are a bunch on strangers on the internet. You have no basis to assume any answers you receive here will be legally correct. Is saving a few hundred dollars worth the risk?

The buyer maybe concerned with interest rates and want to take advantage of current rates.
quiltglo
17 years ago
I'm a big fan of FSBO, but if you don't understand the terminology of the forms, then I would have to second getting a professional to guide you through the process. Not much of that information would be on a contract for a house sale here.

Gloria
mahindro
Original Author
17 years ago
Thanks folks, I thought the same. The lady at the title company we called was trying to convince us (I'm not sure why) on how easy it is to do it yourself.

talley_sue_nyc, I'm glad to know that not closing until we are ready to move is possible (because I really thought hard about it), but I think both parties want to get the deal over with and not have to worry (we are talking a close in early July and posession not until end of March '08). We actually don't need the money from the sale, its just a peace-of-mind thing.

And I think the other thing I'm going to do for the peace of mind thing is hire a lawyer:).

Thanks to everyone who replied - I really appreciate your honesty and straightforwardness.
cpowers21
17 years ago
I agree with everyone else. Goodluck.
berniek
17 years ago
Obviously a Colorado Contract. There are 10 pages to this contract and a number of other disclosures required to go with it. Although filling out the contract is easy for me, because I've done it for many years, my E&O insurance does not allow me to help you, because of liability issues. I would suggest spend a couple of $100's and consult an attorney, it will be money well spend.

Here is a link that might be useful: Contract to Buy & Sell...
triciae
17 years ago
Absolutely contact an experienced real estate attorney. Will be some of the best money you've ever spent in a case like this.

Congratulations, especially in CO!

Tricia
GammyT
17 years ago
It is May 1 of 2007, you dont want to give the buyers the keys until March 2008?
marge727
17 years ago
You need a local real estate attorney and not just to go through the initial paperwork. The paperwork lists deadlines that are to be met over a period of time. Also,somebody needs to sit down with you and help you evaluate the deal. How come the buyers are willing to buy a home and not move in for some indeterminate length of time in a falling market? Will they be making mortgage payments while you live there--and if so how do they qualify for an owner occupied loan?
I realize this offer sounds too good to be true so look at it carefully.
kec01
17 years ago
Money spent on a lawyer will most likely buy you peace of mind. To me, that is priceless. Get a lwyer!
talley_sue_nyc
17 years ago
get the deal over with and not have to worry

An attorney might help you find a comfort w/ the idea of having the contract settled, and unbreakable, but on hold until your closing date.

This is VERY common here in NYC, where co-op closings can take along while.

Get a deposit big enough to reassure you that the buyers won't back out; come up w/ something tha tmakes them feel comfortable that YOU won't back out without incurring a penalty (though they *can* sue you for "specific performance" and force you to sell the house--a lawyer can help you see all THOSE angles as well)

(the home will be owner occupied--the owner will be "occupying" it with someone else--just as someone can buy a house, and allow their friend or relative to live in it rent free; it's the same status, "tenant on sufferance" or whatever the term is; basically, an "allowed guest")

Selling FSBO - need contract help fast!!

Comments (14)

akkw

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Selling FSBO - need contract help fast!!

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