For Sale By Owner (FSBO) refers to the process of selling one’s house or property without the assistance of a real estate agent or broker. Usually, a seller pays a total of 6% commission to seller and buyer realtors. Due to these commission costs, some sellers decide to sell their homes and properties without a realtor. Although you may have decided to sell your home or property without a realtor, nobody should sell their biggest financial asset without professional assistance. A real estate attorney can help oversee the sale and purchase of a home or property from the execution of the contract to closing the transaction for an hourly fee or flat fee that is usually significantly lower than realtor commissions. A real estate attorney can help throughout the following process:
1- Execute a Purchase Agreement/Contract.
A real estate attorney can ensure seller’s, buyer’s or both seller’s and buyer’s (depending on who the attorney represents) wishes are properly depicted in the real estate contract and necessary disclosures are included. A real estate attorney can also draft customized addendums or associated documents. Although real estate agents can fill out their promulgated forms, only a licensed attorney can draft personalized forms or substantially modify existing forms and give legal advice.
2- Order title policy and review title commitment.
The real estate contract is then delivered to the title company to start title research to ensure title can properly be transferred from seller to buyer. Often times, title commitments are difficult to understand and are ignored. Nonetheless, the title commitment has important information that a real estate attorney can review. If the title commitment shows potential title issues in Schedule C, a real estate attorney can help resolve them.
3- Order an inspection and negotiate repairs.
A home inspection can be ordered by the buyer in order to evaluate the structure and systems of a home including home’s heating system, air conditioning, plumbing, electrical systems, windows, doors, ceilings and floors. A real estate attorney can evaluate the inspection with you and help negotiate any requested repairs between the parties.
4- Review or draft lender documents.
If a buyer is using a lender, the lender will draft and provide documents for the buyer to sign at closing. A real estate attorney can help explain lender documents and provide a second opinion. In addition, real estate attorneys can draft documents such as a promissory note and deed of trust for use in seller-financed transactions as well as personalized documents for unconventional transactions.
5- Ensure all paperwork is in order for closing.
A title company or a lender may ask for extra documentation to close the transaction. A real estate attorney can help explain, order, or draft any necessary documents.
6- Close the transaction.
On closing day, the seller and buyer will sign all necessary documents from the title company and lender. A real estate attorney can attend, if requested, to answer any questions about the documentation being signed. In addition, a real estate attorney can close the transaction instead of closing occurring at the title company’s offices.
If you’re thinking about selling or buying a home without a realtor, contact our office at 903-716-6668 to discuss how we can help.