Selling home by owner -- may have jumped the gun

[brandino29]

We have a small single family home that we've been renting out for 2.5 years and with some big life changes (currently back in school full time, kiddo number 2 on the way) we've decided it's time to sell the rental and pull out our equity.  Our current tenant's lease is up at the end of this month and she actually has just moved out leaving an empty house.  Yesterday I went to the house, took some photos, and in an hour had it posted for sale on Zillow.  We figured it wouldn't hurt to see what sort of interest there was trying to do it ourselves and if in a month we didn't get any bites then we'd turn to an agent.  Well, in 24 hours, I've had three calls about it and am already meeting with someone tomorrow morning to show it. 

Here's the catch -- I've never sold a house before, much less by owner, and after throwing it up there on Zillow I realized I really didn't know what steps to take if/when we actually get offers.  My googling so far has really only turned up superficial articles about how to prep your house, take photos, and market it appropriately with little more than a cursory mention of being sure to complete the formal legal legwork of the deal. 

Any good resources (preferably free -- I'm seeing lots of documents I can pay shittons of money for on forsalebyowner.com) that layout the steps of selling by owner you would recommend? 

[Crazydude]

I have never sold (by owner) a home before, but I did try to once. It was recommended to me to try to find a realtor who will "facilitate" the sale by assisting you via advice about the paperwork, etc. Offer them a flat rate of X dollars (few hundred maybe?) for doing so.

The idea is they don't go through the work of listing, showing, and communicating with buyers, so need need for the commission. Also, are your interested buyers using a realtor? If so, they may be expecting their commission.

[Bearded Man]

Call a Title company, they can handle it for you.

[backyardfeast]

The process is probably not exactly the same here in Canada as where you are, but it should be similar.  Here, once you and the buyer have agreed on a price, conditions, etc, you can draw up an agreement that's pretty standard with those prices, conditions, deposit, possession dates, etc.  The usual.  Then, once everyone's happy, go to a lawyer to do the actual mortgage conveyancing for you.  They will handle the documents, the banks, etc.

If you were nervous now, you could certainly contact a lawyer at this stage and ask what kind of agreement/document they would need in order to put everything through for you when the time comes.

Congrats!  Posts like these give me the push to try listing our place by ourselves at first too...

[Bearded Man]

I have never sold (by owner) a home before, but I did try to once. It was recommended to me to try to find a realtor who will "facilitate" the sale by assisting you via advice about the paperwork, etc. Offer them a flat rate of X dollars (few hundred maybe?) for doing so.

The idea is they don't go through the work of listing, showing, and communicating with buyers, so need need for the commission. Also, are your interested buyers using a realtor? If so, they may be expecting their commission.

They contacted him via Zillow, on a fsbo listing.

[PhysicianOnFIRE]

My last home buy and sell were FSBO without realtors for either party.  As others have suggested, the title company should be able to provide some documents to assist you in preparing for the sale. 

We have found FSBO to be great.  The financial part is obvious, you'll save thousands in realtor fees.  In 2 transactions, we avoided between $35,000 and $40,000 in typical realtor fees (assuming 6% per transaction).

We've also enjoyed knowing the buyers and sellers.  Making it personal could backfire, but we've got good relationships with the people we've bought from and sold to.  Makes it easier to get answers to simple questions without having information relayed through 2 realtors.

[brandino29]

Thanks for the insight.  The thought of contacting a title company simply never occurred to me.  Both times we've bought houses I've felt that it should be pretty easy to take care of most of the stuff ourselves.  We'll see!

I've shown the house twice so far, both parties seemed very interested and I expect to hear back from both within the week, neither of them had realtors and just saw the listing on Zillow and contacted me directly.  I'm encouraged by the interest but imagine that the most interest will come in the first week or two from the people most actively looking for a house who are checking Zillow regularly. 

I'll update if there is any news.

[Thomas54]

I have never sold (by owner) a home before, but I did try to once. It was recommended to me to try to find a realtor who will "facilitate" the sale by assisting you via advice about the paperwork, etc. Offer them a flat rate of X dollars (few hundred maybe?) for doing so.

The idea is they don't go through the work of listing, showing, and communicating with buyers, so need need for the commission. Also, are your interested buyers using a realtor? If so, they may be expecting their commission.

A friend of mine is a real estate attorney.  He handles FSBO deals all of the time.  Call one and he can guide you through the process.

[thor800]

we are thinking of doing fsbo with a rental property.  The local market is especially encouraging (a definite factor to consider imho) and a friend who recently did the same with positive results.

i plan on either retaining a real estate agent for advice or just relying solely on the closing lawyer who you will have to use anyway - unless you are a lawyer yourself.  some areas the title agency does all the work, so going that route would probably be similar.

a few thoughts tho - 1)  realtors might have serious clients on tap, 2) buyers might assume that you don't know anything about the market and try to low ball you either upfront or after doing a strenuous inspection, 3) using a realtor could lend some legitimacy to the listing in some cases.

[MayDay]

We just St did it. Our realtor charged 1% to handle paperwork and closing. Well worth it! Our buyer had a realtor and our counter to the buyers was that we'd pay their agent 2% instead of 3%. They accepted.

[Dee18]

I did that 10 years ago and my realtor charged me $400 on a sale of a $190,000 house. 

[zephyr911]

I'm a Realtor myself (primarily investment buying for my own partnership). Would suggest contacting local title companies and/or real estate attorneys (either one can do it legally, but the convention varies locally - it's primarily attorneys here in AL, different elsewhere) and asking for a list of their settlement charges. Other than the flat fee of a few hundred that most of them charge for their services, the other line items are generally legal requirements passed along at cost (recording fees etc) and shouldn't vary much, if at all, from one office to another.

If you're not hiring a Realtor to actually represent you as your agent, it's pretty hard to get your money's worth even at 1%. Just my $.02. The main way we add value is through strategic analysis, service referrals, marketing and pricing - the administrative details are the easiest part.

We just St did it. Our realtor charged 1% to handle paperwork and closing. Well worth it! Our buyer had a realtor and our counter to the buyers was that we'd pay their agent 2% instead of 3%. They accepted.

Always worth asking, innit? Most will at least consider it, if it means deal vs. no deal. They want full rate, but they also want to close and move on to the next client.

[Blindsquirrel]

 1. Pre approval letter or proof of funds to accompany all offers. You do not want to jack around with some putz who can't buy the place.
 2. Fill out state disclosure form, lead disclosure form and lead in your home pamphlet.

[brandino29]

OP here...

After a blazing start -- I showed the house 5 or 6 times in the first week -- things slowed down considerably and I had no offers.  Actually, one young couple was dying to have the house and offered full asking price and then couldn't get financing, which now I can say is definitely one of the advantages of going through a realtor because the potential clients are likely to have been screened and have pre-approval. 

We kept it on Zillow for a month in all then signed a 60 day contract with a realtor.  We've only had one formal offer for $56k on our listing at $89, quickly said no to that one though they did some great market gymnastics to try to convince us that is all that it is worth. 

Truthfully I'm a bit frustrated - I truly expected to turn the house around very quickly and that initial surge of interest really convinced me it would sell fast.  We're talking about what to do now.  We can't keep it vacant and listed indefinitely, so we will either soon need to decide to drop the asking price, do something like replace the roof (it's not falling apart but it doesn't have too much longer to live), or just take it off the market and rent it again.

[adamcollin]

You can seek assistance from a real estate agent as he will help you handle the paper work efficiently.