Buyers & Sellers,
I have been involved in residential real estate transactions for nearly 20 years as a buyer, seller, landlord, tenant, investor, and mostly as an attorney. Based on this experience, I can say with certainty that each residential real estate transaction has unique legal challenges and that no two residential real estate transactions are alike. And as more people are choosing to buy or, more likely, sell their homes by owner (FSBO) to save expensive commissions paid to residential real estate agents or maintain maximum flexibility, the need for attorney supervision of the transactional process from principal agreement through closing is extremely important. Homeattorney.com
Before I continue, let me make clear that I respect the role of residential real estate agents. These professionals provide valuable knowledge, guidance and services to home buyers and sellers. Admittedly, I have relied on the expertise of residential real estate agents on numerous occasions. However, that expertise comes with a cost to home sellers. Sellers usually pay between 6% to 7% of the closing price to residential real estate agents. In other words, on a $300,000 home sale, a seller may pay up to $21,000 in commissions, “netting” much less on the sale that originally expected. So, today more sellers are choosing to sell their homes without an agent, which can potentially save them thousands of dollars.
So what responsibilities must a FSBO seller take on? First, sellers need to price their home appropriately. Often times sellers have a good of a sense of what they need to ask for their home, but historical property transfer information is also readily available on county websites. Second, sellers need to market their home. Luckily, now, most sellers have free channels to market their home on the web (it is not uncommon today to see owners posting their home for sale on Facebook) or listing it with a flat fee MLS service. Sellers can even sign up for a free "For Sale" sign at one of our seminars or purchase one for themselves. Third, sellers may chose to schedule home showings or hold open houses. And fourth, FSBO buyers and sellers need to oversee the complex real estate transaction process, unless they chose to hire an attorney, like those at homeattorney.com, to do so.
If you chose to do paperwork on your own, do so at your own risk. Any real estate closing, no matter how simple you might think it is, is always a complex legal transaction filled potentially significant issues. An attorney’s role is especially important early on in the home selling or buying process. For example, maybe a party has an agreement on price, but what about all the other important questions such as how long should the due diligence process be and what is covered therein? What conditions exist to proceeding on the sale, like financing and inspections? And if there is an inspection contingency, whose responsibility is it to fix defects that were discovered by the inspector. Additionally, what fixtures are included or excluded from the transfer, and who holds the “earnest money” and how much should that be? Other questions like how closing costs are allocated and timing of the closing are also addressed in the purchase and sale agreement. Other legal issues abound regarding title insurance, and what contained in the title insurance exceptions should give a buyer or seller pause to close? Do any easements exist that affect the land? The bottom line is just one miss on these legal issues can cost a party thousands or tens of thousands of dollars that they did not expect to incur.
So, I invite you browse this site and to contact me to discuss your FSBO real estate legal needs. It would be my pleasure to assist you.
Marc Feldman, Esq. & Founder of HomeAttorney.com