Real Estate NewsSo You Want to Sell Your Home Yourself?
When Larry and Beth decided that the time had come to sell their home, they
asked themselves:
"Why do we need a real estate agent? After all, an agent will charge thousands
of dollars to sell
even an average home, and that commission comes right off the top! Heck, we
can do practically
everything that an agent would do, so why should we pay out all that money?"
Many home sellers
have similar thoughts, and because so much money is at stake, these questions
deserve some
serious thought.
Any real estate agent can give you an impressive list of reasons why it
makes sense to hire a
professional to help you sell your home, and from a marketing perspective,
there are indeed many
benefits in doing so. An experienced agent can utilize any number of marketing
opportunities and
strategies that the typical "For Sale by Owner" (a.k.a. "FSBO") does not even
know about. For
example, only a professional agent can take advantage of the Multiple Listing
Service, organized
tours, etc. However, there is another reason to seek professional help in
selling your home; an
important reason that you may not have thought about.
In today"s world, the sale of real property is not just a marketing
exercise; there are many legal issues
involved, which can create liability in the sellers. Of all the things you
want and expect from selling
your home, a lawsuit is probably not one of them!
Unfortunately, residential transactions have seen an alarming increase in
the number of claims and
lawsuits. Of these claims, the majority are filed against sellers, by their
buyers. Home sellers who
think they can "go it alone" might want to seriously ponder the observations of
a lawyer who has
defended many sellers and real estate agents against claims made by "the Buyer
from Hell."
In most states, the process by which title to real property is transferred
is rather complicated, and the
typical home seller is not familiar with the many legal issues that can and do
arise, even in a fairly
simple transaction. Important decisions must be made concerning contract
terms, escrow matters,
transfer of title, apportionment of costs and any number of other matters.
Also, bear in mind that a
simple missing word, or a mistake in grammar can create a dispute which, in
turn, can give rise to a
lawsuit. Aside from the problem of drafting the contract language itself,
sellers can face other
dangers as well. For example, did you know:
that in most states, there are substantial risks involved when a seller agrees
to "carry back" a note
from the buyer; risks that can cost you thousands of dollars?
that your good credit rating could be ruined by your buyer"s default, many
months, or even years,
after that buyer "assumes" your loan?
that a clever buyer may be able to stay in possession of your property for
many months after he
defaults on the contract, and in effect "live for free" at your expense?
that most buyer complaints involve alleged damages of less than $10,000,
yet it can cost you
thousands in attorney"s fees to defend such a claim?
In short, a lawsuit can ruin your whole day! Even if you know that the
buyer"s claims are
completely bogus, it can take many months and many thousands of dollars to
prove that you are
"innocent." What"s worse, you have no "malpractice" insurance to pay these
legal bills; you will have
to write all the checks yourself. And, of course, you could lose ... and
losing a case like this can be
disastrous. You and the buyer have a contractual relationship, and in many
states, sellers who lose
such suits could find themselves having to pay not only the amount of damages
awarded to the buyer,
as well as their own attorney, but they may also be ordered to pay the fees of
the attorney who sued
them!
Experienced, professional real estate agents understand these kinds of
risks, and they can help you
to minimize them in a variety of ways. They devote many hours to training and
educational programs
which emphasize risk reduction, and protecting their clients" interests.
Now, there are any number of reasons why your buyers may decide to take
action against you
(sometimes, they just don"t feel like making the payments any more!). However,
most of these
complaints allege problems with the condition of the property, and/or
representations made to them
about the property or the transaction. An experienced agent knows how to
reduce the risk of these
types of complaints, by including, or suggesting that your attorney include,
effective "AS IS" and other
clauses in the contract language, and by providing for such things as a
professional home inspection,
and a home warranty.
When a problem arises in the transaction, an experienced agent can move
swiftly to "nip it in the
bud." Their thorough understanding of the myriad facets of modern transactions
can help them to
identify the real problem, and to either solve it themselves, or by calling
upon resources that the
typical seller simply does not have access to.
There is no escaping it: the best way to deal with a complaint is to prevent
it in the first place.
The organized real estate community has spent a lot of time thinking about how
to reduce the
likelihood of claims, and has responded to this threat in a number of ways.
For example, the standard
contract forms that agents in many states use, are chock full of language which
can help protect you,
and reduce your exposure to claims and litigation. If you are in a state in
which real estate transactions
are handled by attorneys, many of the problems discussed herein will be
minimized, but a top-flight
agent can still play a major role in helping your sale move toward a smooth
closing.
Of course, I don"t mean to scare you with all this! But hey, it is a jungle
out there. Indeed, I"ve
only touched on a few of the potential pitfalls of selling your home on your
own. Take it from someone
who knows: selling your home without professional help is very risky business
indeed. Yes, it costs
money to employ a real estate agent, but if you find the right one, you will
likely be able to sell your
property faster, while at the same time reducing the chances that your buyer
will come back to haunt you.
Also See:
Selling Your Own Home Isn"t As Easy As It Seems
The Trouble with FSBO"s: Part I - Understanding the Complexities of the Transaction
Editor"s Note: The subject matter discussed in this
article is of a general nature. It may not be considered legal advice. While
the author is a licensed attorney in Arizona, he is not YOUR attorney, and the
laws in each state can vary greatly. Therefore, you should consult experienced
legal counsel in your area before taking any legally significant actions which
may affect your legal rights.