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FOR SALE BY OWNER:
Overview of an FSBO Home Sale

A real estate agent typically charges a fee for services of up to 7% of the sales price of a home. No matter what the value of your home may be, this is a significant amount of money. The sale of a home by an owner, without the use of a realtor, is not a terribly complicated process and can usually result in substantial savings to the seller. Understanding the requirements of what is needed to successfully sell a home is the key to the transaction.

The successful sale of a home, without the services of a realtor, depends greatly on the owner's efforts and ability to market and present the home to potential purchasers. To successfully complete the sale and legal transfer of one's home, the following steps are generally taken:

1) The property must be valued by the seller in order to obtain a legitimate and reasonable sales price for the property - it must then be placed on market for sale and advertised.

2) A written real estate purchase and sale agreement, lead hazard form and real property disclosure forms (and other documents as may be required by the laws of the state in which the home is located) must be prepared by seller and presented to purchaser - these documents are then signed by the parties. A down payment/deposit is then usually paid to seller by purchaser at this time.

3) The purchaser begins the process of obtaining financing to pay the purchase price - this may require that the purchaser obtain a survey and/or title search being done (or other activity as required by lender). The purchaser and/or lender may require title insurance policy to be purchased and issued on the property.

4) The seller prepares a deed (quit claim, warranty or some other form of deed), signs it, has it witnessed and notarized so that the property can be transferred to the purchaser.

5) The closing takes place - the purchaser (and/or lender) tenders the remainder of purchase price (that amount that is to be paid after the down payment is applied to the purchase price of the property) to the seller; seller pays off all liens and mortgages on the property; the deed is tendered to purchaser and then the purchaser files deed with the governmental recording office in the county or parish in which the property is located so that property is transferred to purchaser's name.

While some additional steps are required if a bank loan is involved (e.g. the bank may require a survey or may require some testing for environmental issues), the steps listed above are those usually taken in a for sale by owner transaction. Also, a closing agent (usually a title company) will assist in helping the parties transfer funds, file the deed and generally "close" the sale. The cost of a title company services are usually fairly modest.

Please note that each home sale transaction may be unique and that issues may arise in the transaction requiring additional or different steps be taken (and, in some cases, additional forms and documents may be required). It is recommended that should any issues arise in the transaction that are not "typical", a licensed attorney be contacted. This article is not intended to provide any legal advice with regard to the purchase or sale of any residential property.

 


Learn More Want to learn more about FSBO Home Sale Contracts?
See our Q & A series on FSBO Home Sales at 'Ask Standard Legal' >


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DISCLAIMER REGARDING LEGAL ADVICE: None of information contained on this web site is intended to constitute legal or other professional advice, and you should not rely solely on the information contained on the site for making legal decisions. When necessary, you should consult with an attorney for specific advice tailored to your situation.




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