For sale by owners have now been given luxury online sites to sell their homes for no money or small fees. It is a new concept that has been developed lately and it is a very smart concept. But, still the problem is, what do you do once you have a buyer who wants to buy your property? With no knowledge of how to write a contract or how to finance a loan, maybe there should be an air of caution here.
Advertise your home here for "FREE" with no fees and no Realtor's commissions. Does this type of advertising grab your attention? It should, as it is an unheard of ideal until recently. Many sellers are actually thinking of advertising at these websites, as evidence by the great numbers of listings that are there. What are the pros and the cons of this kind of transaction?
Pros for selling your home on the web:
1. There is no Realtor's commissions, so that may help you in getting more for your home or reducing the price by the amount you would of paid a Realtor.
2. Independence. You can advertise as you like and hold open house when you like. No more late night showings and no more last minute open homes.
3. First hand knowledge of everything happening in the transaction.
4. Now you must do all the work, but that is okay, cause you are getting all the money, right?
These sites are making their money somehow. Nothing is for free. The majority of the people calling you from this listing will be Realtors and Mortgage Brokers. Both of them looking for business. The odds of you selling your home on-line is small and then after you do get someone to whom you think wants to purchase the home, how do you write up the contract?
Cons against this type of selling without a Realtor:
1. Without a Realtor, no contracts and no help. Realtors are worth their weight in gold. One mistake on a contract can cost you thousands of dollars. Most of the time, the Realtor can get a buyer to pay more for the home and costing you no more in money than if you sold the home yourself and received less money.
2. Who will finance the home? You have no experience in banking and have no clout or knowledge on how to close a deal. Which bank will you use and how will you pressure any bank to help you with the appraisal. Many times the deal will fall through strictly because the loan needs help in closing.
Now the banks are refusing class A buyers. 1 out of 6 qualified buyers are being refuses and especially buyers with income under $50,000, In a recent article, they stated that 25% of all buyers who made less than $50,000 are being turned down for loans. What about the appraisal and how can you fight a low-ball appraisal?
3. Which escrow and title do you choose? A smooth investor could and may take advantage of your inexperience. A ethical escrow company will protect your interest. An unethical company will charge you huge fees and look after the buyer only.
4. One of the major concerns should be, is who is coming to see your home. Realtors will screen buyers and be present with them when they visit you. A person calling up over the Internet could be the "Boston Strangler."
There are many dangers involved in dealing with the internet, sometimes a person will get lucky and find someone who will pay cash and buy your home, but the odds are around 1 percent. In the end 80% of all "For Sale by Owners" end up with a Realtor after he has spent a few thousand dollars on advertising and signs. They are extremely frustrated and usually are thrilled to have anyone help them.
Your alternative could be to hire a Real Estate Attorney that charges $400 an hour. If you really want to do this yourself, then go to the local Board of Realtors and ask for a reputable escrow and title company. Ask them for help in getting some forms. They will be more than glad to sell you some contracts.
You can go to some sites that teach you how to fill out the forms, but you do not know anything about contingencies or necessary clauses that belong in the contract. What about arbitration? Do you agree to arbitrate? Do you want to give a home warranty plan and how much is the net sheet? So many questions, that will make you think long and hard about trying a "For Sale by Owner" sale.
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