For Sale By Owner Transactions
Real estate agents provide a valuable service. Still, some homeowners desire to sell their home on their own and save the cost of a real estate agent commission. We frequently assist homeowners with For Sale By Owner (FSBO) transactions, walking them through each stage of the sale from start to finish. We provide this service at a fixed fee that is significantly less than a typical real estate commission. The process works like this:
- Listing the Property. Attorneys are not appraisers, so the decision of when to sell the home, and for what price, lies with the seller. Some clients come to us after they have listed the property and reached an agreement in principal; others meet with us in advance for advice about communicating and negotiating with potential buyers or sellers.
- Negotiation. While the buyer and seller usually negotiate directly between themselves in a FSBO transaction, our clients may call on us for guidance in negotiating the terms of the deal. The terms of a real estate transaction involve much more than price, such as earnest money, due diligence review, title review, financing, and contingencies, and more. We frequently assist clients by helping them understand the specific content of different offers, as well as suggest reasonable counter-offers. Our extensive experience with real estate transactions large and small enable our clients to negotiate favorable terms and protect their interests.
- Purchase Agreement. We draft custom purchase and sale agreements that are tailored to meet the needs of each FSBO transaction, and we take the time to review and explain the contract to our clients and, if desired, the opposing party. Each property is unique, and so is each transaction. From the seller's standpoint it is important that the buyer cannot unreasonably back out of a transaction without a financial penalty. From the buyer's standpoint it is important that appropriate contingencies be built into the contract. There are a wide range of other terms that may be negotiated in a real estate transaction such as easements, options, rights of refusal, lease-backs, deed restrictions, etc. We work with our clients to draft a purchase and sale agreement that is tailored to their specific needs.
- Property Condition Disclosures. Idaho law requires the seller of a residential home to provide the buyer with a disclosure that addresses the condition of the property being sold, and Federal law requires a disclosure of lead-based paint hazards for homes built prior to 1978. When these disclosures are not been made or are not made properly, lawsuits may be filed. Having represented clients in lawsuits over property condition disclosures, we provide in-depth advice to sellers as to what constitutes a proper disclosure, and we advises buyers as to what the disclosure does and does not mean.
- Title Review. Essentially all home transactions involve title insurance, yet few home buyers understand how to read, understand, and respond to the title insurance commitment. We review the title commitment with our clients and explain its implications. This may include review of easements, surveys, and other encumbrances against the property.
- Financing. Most home purchases are financed through conventional bank financing, but sometimes the seller or another private party finances all or part of the sale. In these situations we draft custom loan documents to meet our clients' needs.
- Closing. Every home sale is completed with the buyer paying money to the seller and, in exchange, the seller giving the buyer a deed to the property. The closing is usually performed at a title company. We often attend the closing so we can answer any questions that may arise during the process.
At Racine Olson, a talented and experienced group of real estate attorneys are available to assist both sellers and buyers in FSBO transactions. Please call at 208.232.6101 or contact us for assistance and representation in your FSBO transaction.