For Sale by Owner Transactions

Looking to buy or sell a home without going to the cost of paying a real estate agent? Although many studies have shown that you're likely to get your money's worth when paying an agent, many people still choose to work without one. Whatever your reason for buying or selling real estate without a professional agent may be, there are some important things to keep in mind when making a for sale by owner transaction for the first time.

Too many for sale by owner sellers seem to have woken up one morning and decided, Hey, I think I'll try to sell my house today! and stick a sign up in their yard. In order to stay properly organized and not cheat yourself or pass up on a wonderful offer from a potential buyer, know the correct answer (don't try to guess) to the following frequently asked buyer questions:

When was the home built?

What are the exact square footage of the home and the size of the lot?

How long have you owned the home and why are you selling it now?

What can I expect to pay for my annual property taxes?

How much do you spend on average for all your utilities?

How far away are the local schools, churches, and shopping centers?

Is it legal to rent out any portion of the property to non-related parties?

When was the most recent appraisal done and how much did it appraise for?

Are you aware of what the current market value is for your property?

Expect that any potential buyer will want to know the answer to these questions before making an offer. Real estate agents are paid to be aware of the answer to these questions; so many people who set out to list their home without an agent do not realize that these are common questions a buyer will ask so they should be prepared with the answers.

In addition to knowing the basic facts regarding the home you are selling, before you list your home you should have a clear idea of what you expect from your buyer! Potential buyers may be turned off by a seller's lack of organization if the seller does not have a clear idea of what he or she needs from the sale of their home.

This seems like common sense, but many sellers have listed their homes without deciding in advance what the lowest offer is they are willing to accept, how much earnest money the buyer will need to present, how much if any of the closing costs they are willing to pay, and what appliances or other extras will or will not be included with the property.

Once you feel that you can confidently answer a potential buyer's questions you can feel more confident about putting up that For Sale by Owner sign out front. Still, your preparation doesn't end there! Once the calls start coming in from potential buyers and someone makes an offer, you need to make sure that you take steps to protect yourself and separate the serious offers from those with no value. Before signing a purchase agreement, make sure the following requirements are met:

If the potential buyer is using funds from a new loan to pay for all or part of the purchase amount, request that the buyer provide you with a pre-approval letter from their lender.

When reviewing an offer of intent to purchase, keep in mind that the potential buyer probably expects that you will counter offer, so feel free to do so! Some back and forth negotiation is the norm in any real estate transaction.

Once you have accepted an offer, thoroughly read the entire purchase agreement before signing it. Again, this may seem like common sense, but many people do not read through the fine print before signing. This often leads to misunderstandings and can create a very negative experience for the buyer or the seller or both.

Listing your home as For Sale by Owner definitely has its pros and cons, but you will have greater success and suffer from less stress if you do some research and prepare yourself in advance. It is possible to enjoy the feeling that will come from successfully selling your home without the help of a real estate agent!