Today’s guest educational post comes to us from attorney Chris Langpaul, with Hubbard Law Firm.

Chris explains why in this Seller’s Market it sometimes makes sense to sell without a Realtor, and then gives detail on the process from the Seller’s side of the transaction.

What’s a Fizbo Anyway?

FSBO stands for “For Sale By Owner” and it’s very popular right now.  When selling their home, most people usually think they need to list it with a Realtor.  While Realtors can provide a great service, you simply may not need all the services they provide – and you may not want to pay their 6-7% fee either.  For a $250,000 house, a 7% commission is $17,500!

That fee can be well deserved by a Realtor who finds a buyer in a tough market, but in a Seller’s Market, home sellers may not need the marketing services of a Realtor.  They commonly find their own buyer — pretty quickly too, sometimes!

Help!  I Found a Buyer, But I Don’t Know What To Do Next.

This is where a real estate attorney comes in.  It may feel like the hard work is done once you find a buyer, but it’s actually just beginning!  After finding a buyer, someone needs to draw up the Purchase Agreement (also called the “Offer” or “Purchase and Sale Contract”).  If neither side has a Realtor, an attorney can draft one for you.  In fact, having a legal professional draft your Purchase Agreement will ensure it’s done correctly and in your best interest.

After that Purchase Agreement is signed, there is still a lot to do to get ready for the closing.  In Iowa, that list can include the following:

  • The Seller Disclosure Statement (should be signed with or before the Purchase Agreement)
  • Lead Based Paint Disclosure Form (if house is built before 1978)
  • Home Inspection
  • Radon Inspection
  • Wood Destroying Pest Inspection
  • Surveys
  • Abstract Update and Delivery to Buyer’s Attorney
  • Title Opinion or Title Commitment
  • Form 1099-S
  • CMA
  • Time of Transfer Inspection for Septic Systems
  • Preparing the signing the Tax Proration Agreement
  • Preparing and signing Deed, Declaration of Value and Groundwater Hazard Statement
  • Holding and delivering earnest money
  • Delivering all documents to the closer
  • Reviewing and correcting any errors on the HUD/Closing Disclosure

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Written by Admin