What You Need to Know Before You Sell Your Home
Many of our clients in the Columbus, Ohio area prefer to sell their homes without a realtor. Before making this step, we encourage them to educate themselves on the details of the process. For example, all home sales need a fully signed written Real Estate Purchase Agreement that clearly describes all of the terms and conditions agreed to by the Seller and the Buyer. It is extremely important that you carefully negotiate with the Buyer all of the key terms and conditions when drafting a Real Estate Purchase Agreement.
Your first task is to carefully research all comparable sales of similar homes in your area to determine an appropriate selling price. You always want to add a higher price to give yourself room to negotiate with the Buyer.
We always advise our clients to make no representations concerning the condition of their homes. Instead, advise the Buyer that he or she can inspect the home and rely solely on such inspection with respect to the condition of your home. We always advise our clients to tell the Buyer that he or she is purchasing the home “as is.”
FSBO Tips to Consider
We want to provide you some of the key terms and contingencies that are important to negotiate and reach an agreement with the Buyer. Here is a list to get you started.
First, in the event that the Buyer breaches any of the Buyer’s obligations, you need to ensure that you have the sole and absolute discretion to terminate the Real Estate Agreement and have the absolute right to place your home back on the market.
In the event the Buyer breaches any of the Buyer obligations, you need to make it very clear to the Buyer that the Buyer will forfeit any and all security deposit money, and all of this money will be paid to you.
If there are any repairs that need to be made to the property, make sure you negotiate a maximum price that you are willing to pay for those repairs. Make it clear to the Buyer that the Buyer will be solely responsible for any and all repairs and costs that exceed the maximum amount to which you agree.
Make it very clear to the Buyer that the Buyer must obtain financing within three to five calendar days from the date the Real Estate Purchase Agreement is signed. Do not give the Buyer a lot of time to obtain financing. We often prefer that the Buyer be pre-approved prior to signing the Real Estate Purchase Agreement.
Make it clear to the Buyer that the Buyer will be responsible for paying all of the costs for all inspections. Try to convince the Buyer to pay for the cost of the owner’s title insurance commitment and policy. Keep in mind that the owner’s title insurance commitment and policy is usually a closing cost that is paid by the Seller. Sometimes our clients are successful in convincing the Buyer to pay for this cost. We recommend that the Buyer pay for this cost because it is the most expensive closing cost for the Seller.
Finally, you need to negotiate that you will maintain possession of the home up to the date of the closing, and you need to negotiate a firm closing date.
Always negotiate and reach an agreement on what fixtures and personal appliances and equipment will remain with the Seller or be transferred to the Buyer.
Terms & Conditions of the Agreement
Once you have reached an agreement with the Buyer on these important terms and conditions, we recommend that you hire an experienced Real Estate lawyer to draft a Real Estate Purchase Agreement for you that will outline these important terms and conditions and add any additional contingencies relating to the sale of your home.
The Real Estate Purchase Agreement needs to carefully outline all of these important terms and conditions and includes all of the terms and conditions regarding: lender pre-approval, loan commitment, taxes and assessments, equipment and fixtures, inspections and tests, warranties, provisions regarding the deed and title insurance and provisions regarding who assumes the risk of loss in the event that the home is damaged or destroyed prior to the closing. It is critical that the Buyer pay an earnest money deposit to you that is due when the Buyer signs the Real Estate Purchase Agreement.
Selecting a Title Company
Once you are in contract with the Buyer, you will need to select a title company that will prepare the deed and title insurance and perform a search of the title to identify all of the liens with the property. The Title Company usually prepares all of the closing documents and includes all of the finance documents that they receive from the lenders. We recommend that you have an experienced attorney review all of the closing documents that are prepared by the title agency. The most important closing document is the good faith closing statement that identifies all of the settlement charges for the Buyer and the Seller. All of these costs and expenses need to be carefully reviewed.
Have a Question about Selling Your Home?
We’ve helped many homeowners in Columbus, Ohio. Are you thinking about selling your own home? Contact The Law Office of Tom Somos, LLC to ask a question or schedule a free consultation.