By Lawrance Morrissey
If you're intimidated by the legal paperwork involved in selling or buying real estate by owner, you're not alone. Most people are!
Realtors and their very powerful marketing and lobbying efforts, do their best to keep you scared. Thats one of the most common reasons that people use their services to handle the paperwork! Many consumers also mistakenly believe that realtor representation can keep them out of legal trouble, yet one of the first things you learn going through licensing classes is to NEVER give legal advice. Unless you're an attorney at law, its illegal! You quickly learn to tell your customer to consult a lawyer for advice when they have legal problems or questions.
Another reason people are intimidated by the paperwork is their memories of their last transaction at the closing table usually buying the very home they are now wanting to sell. Most people remember signing a mountain of paperwork with the closing agent briefly explaining the documents, and thinking, I have no idea what I'm signing but if I take the time reading it, wed be here for hours. What many sellers don't realize is that the great majority of those documents pertained to the mortgage they received. Luckily, when selling a home, the stack of paperwork is considerably less than when buying.
In a by-owner transaction, there are usually only two documents required to reach the status of under contract or sale pending, they are:
- Sellers Sale Disclosure (Two pages)
- Purchase Agreement (Five pages)
If your home is older than 1978, you are also required to sign a one-page lead paint disclosure and give your buyer a brochure on the potential dangers | of lead paint.
When you choose a reputable title company, they will order your title work and assist you with the rest of the paperwork, including the pro-rated calculations of back taxes and home-owners association dues. The two title companies we primarily recommend are Royal Title and Meridian Title Corporation. Not only have they both been virtually mistake free in nearly three years of use, but we also know they don't sneak in any additional junk fees on by owner transactions.
Even though by-owner real estate deals can go wrong and result in legal issues, most do not. In fact only a fraction of a percent fall through with our clients, compared to about 5% of transactions when Realtors are involved. We certainly do recommend that you take the process seriously. You should take the time to read and understand all documents involved. You will probably have questions and answering them is a valuable part of our comprehensive services.
We also offer a paperwork completion service for $295 where we help you and the buyers complete the contract, order your title work, and review your Hud-1 Settlement Statement before closing.
Another option we also highly recommend is the $595 flat-fee For Sale By Owner Package offered by The Nice Law Firm who will help you customize a purchase contract, prepare a counter-offer, review your deed, disclosure forms, Vendors Affidavit and the Hud-1 Settlement Statement.
Were proud to be able to offer plenty of options for the For Sale By Owner seller. After all, getting your home sold without paying commissions is what we do. And after saving area residents well over $2,000,000 in commissions since 2004, we can safely conclude we do it well.
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