Lucent Law’s real estate lawyers have helped hundreds of home sellers and buyers throughout Washington state buy and sell homes, condos, and land. For sellers, the “For Sale By Owner” process can be a great way to sell their home or land while saving money on brokerage commissions. However, to avoid problems and disputes, you must do it right. Here are six things you should do to make selling your home or land on your own a success:
1. Choose FSBO or Hire a Broker
Determine if you will sell your property yourself (“For Sale by Owner”) or if you want to hire a real estate broker. If you decide to sell your property on a FSBO basis, consult with an experienced real estate lawyer who frequently represents FSBO sellers. If you choose to have a real estate broker represent you, determine how you will find and interview listing brokers. Before you sign any listing agreement, consider having it first reviewed by an experienced real estate lawyer.
2. Prepare Your House for Sale
Determine if your property needs any repairs to put it in the best possible showing condition for buyers. Prepare a “showing plan” for how the property will be presentable and clean for showings. Review online resources for preparing a house for sale.
3. Decide on a Marketing Program
There are a lot of options for marketing your property. The first decision will relate to your choice of whether to list with a real estate broker. If you are listing with a full-service real estate broker, the broker should do the marketing work for you. The remainder of this section assumes you are not listing with a full-service real estate broker.
If you have chosen to sell without a broker, there are several good options for marketing your property online, including Zillow and Craigslist. Search online for other homes near you that are being sold on a FSBO basis, and consider using the same websites for selling your house that you see others in your area using. You will also want to put a “for sale” sign in the yard and prepare flyers to give to potential buyers. Tell all of your friends and family you are trying to sell your home, including mentioning it on social media. Finally, be prepared to field phone calls from real estate brokers who want a listing or who may have a buyer for your property (note that you are free to negotiate a brokerage commission with a buyer’s broker, or choose not to sell to a represented buyer).
There is a third option, which is to list the house with a discount real estate brokerage. These brokerages charge a flat fee for listing your home in the Multiple Listing Service to expose it to other real estate brokers. The discount brokerage typically does not charge a commission on the sale, but you will need to decide on the amount of a commission to offer to the buyer’s real estate broker, which is shown in the MLS listing. With this option, you will still want to do the same marketing as if you were selling on your own without the MLS listing, such as Zillow and Craigslist ads, yard signs, flyers, social media, etc.
Open houses can be an effective tool for exposing the house. Ideally, more than one “host” is present at all times as a precautionary measure. Be sure to get a name, phone number, or email address for everyone who comes into the open house, not just for follow-up, but to have a record of visitors who came into your home. Look for advice for open houses online — there are a lot of good resources with advice about how to best present the house, reduce the chances of theft, and stay safe.
4. Review Your Title
Consider ordering a preliminary title insurance commitment from a title insurance company that operates in your county. The commitment will describe your title’s current status and identify exceptions and encumbrances. If you have questions about the information in your commitment, consider consulting with an experienced real estate lawyer.
Typical purchase and sale agreements require the seller to provide a commitment to the buyer in a brief period after the purchase and sale agreement is signed. The seller also typically pays for the premium for the title insurance premium that is issued after closing.
By reviewing the title status of your property in advance, you will have more time to address any problems that may appear before marketing your property.
5. Prepare for Disclosures
With very few exceptions, every seller of real property in Washington must deliver a completed and signed real property disclosure statement to the buyer no later than five business days after the purchase and sale agreement is signed. The buyer has three business days to review the disclosure statement and either accept and approve the statement or cancel the transaction. You can also give the disclosure statement before signing the purchase and sale agreement.
You should review the questions in the disclosure statement in advance so that you are not rushed with your responses if a buyer is ready to move forward with purchasing your property.
If your home’s construction date is before 1978, you must also disclose the potential presence of lead-based paint. HUD publishes the disclosure form and the accompanying pamphlet. The form and pamphlet are periodically updated, so be sure to get the most recent version. To access the disclosure form, refer to the document, Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards. In addition, you must deliver the explanatory brochure entitled, Protect Your Family From Lead in Your Home,
Disclosures can be delivered to buyers digitally through e-signature software to conveniently deliver the disclosures and simultaneously create a receipt showing when the buyer received them.
For more information on the required disclosure forms needed when selling a home, please read our article Washington Home Sellers Must Make Required Disclosures, written by Lucent Law’s Spencer Stromberg.
6. Consider Acceptable Terms
Sellers may not realize that the sales price of their home is only one of the terms that need to be agreed to and negotiated.
Other key terms which you need to consider in advance of marketing your home for sale are:
- Determine the amount of earnest money that you will require to be deposited by the buyer;
- Decide which title insurance company will issue the title insurance policy;
- Choose the escrow agent who will close the sale;
- Decide if you will accept any contingencies from the buyer (typical contingencies include financing and inspection);
- Decide if you need any contingencies (for example, finding a replacement home);
- Do you require the purchase price to be paid in cash at closing, or will you offer any seller financing; and
- Set a closing date.
Another term to consider is whether you are including any particular item of personal property with the sale of the property. If you are willing to sell your property on a seller financing basis. In that case, you need to specify the terms of that financing, such as the amount of the down payment required, the interest rate, the amortization period, and the loan term.
For more helpful tips to contemplate before jumping into a seller financing transaction, visit our article 5 Things to Know About Seller Financing.
We Know the Paperwork and the Process. We Can Guide You Through Your Next Sale
- Negotiating Terms
- Drafting the Agreement
- Helping with Disclosures
- Dealing with Deadlines
- Guidance Through Closing
Our EssentialLaw Residential Seller Package has been custom-designed to help sellers save time and money and avoid costly mistakes when selling homes on a for-sale-by-owner basis. All at an affordable price!
Schedule a Free Introductory Call with a member of our friendly real estate transactions team to learn more about how we can help you with your home or property sale.