The internet has changed the real estate marketplace and as a result of websites such as Trulia, Realtor.com, Craigslist and Zillow, more and more homeowner’s are opting to sell their homes without the assistance of a real estate agent. These sales are often referred to as For Sale by Owner (FSBO). When a homeowner elects to sell a home on their own, the services of a qualified real estate attorney can help ensure the sale goes off without a hitch for a fraction of the cost of a real estate agent. This page provides some basic information about hiring our firm to assist you with your FSBO transaction.
Can’t I just use the standard forms off the internet?
Although standard real estate forms are available from websites, such as the Kansas City Regional Association of Realtors (www.kcrar.org), these forms do not come with an explanation of the various terms or when certain disclosures are required. For most people, the sale or purchase of a home is one of the largest transactions they will ever be a party to. With so much money at stake, it is important to ensure that all the paperwork is completed correctly and that the buyer and seller are protected from future liability. An experienced real estate attorney can ensure the property ownership is properly transferred and/or help address issues that arise during the closing process.
Isn’t a real estate attorney expensive?
Especially when comparing the costs to that of a real estate agent, an experienced real estate attorney is rather inexpensive. For Sale by Owner packages start at only $500 or less than half a percent of the purchase price for a $100,000 home. The standard real estate agent’s commission on that same home would be $6,000 or over 12 times the cost of hiring an experienced Real Estate Attorney.
What is the process and when do I contact the attorney?
The first step once you contact my office is for to gather some basic information about your home and your intentions for selling the property. We can either discuss this information on the phone or you can complete an online form with this information by clicking on the link at the bottom of this page. At the same time, we will also send you a retainer agreement that discusses our fees and some basic firm policies. By completing this form and signing the retainer agreement, you are not obligated to use our services. This simply allows us to have your information in our system and ready when you obtain an offer to purchase your home.
Once we obtain this information, we will send you an informational booklet regarding selling your home FSBO and a “Letter of Intent” that can be used when someone is viewing your home and wants to make an offer. The Letter of Intent is not the purchase contract, but it can be used to memorialized some basic terms while the contract is being drafted and to create a moderately binding obligation on the buyer to complete the purchase.
Once you have an offer, we will provide you with another form you can use to submit information regarding the terms of the purchase. This form will ask basic questions, such as the purchase price, if the buyer will be paying cash or obtaining a mortgage, and if the purchase is excluding any appliances. Once we receive this information, we will begin drafting your purchase contract, which will be provided within 1 business day for execution by the parties. If you provide us with the buyer’s email address, we can send the contract to both you and the buyer via email for an electronic signature.
At this point, the transaction can go one of two ways. If you are using a title company for the closing, I will forward the signed contract to the title company and the buyer should promptly deliver a certified check for the escrow deposit to the title company. From there, the title company will take over drafting of the necessary paperwork and I will either step out of the transaction or can continue to work as a liaison with the title company, including reviewing the title paperwork prior to your closing.
If you we will be performing your closing (e.g. it is a cash sale or seller financing), we will prepare the paperwork necessary to effectuate the transfer of the property. We will then schedule a closing date and coordinate the execution of all the various documents by the parties. Once the paperwork is signed, we will record it with the county to ensure the proper transfer of title to the property.
How much will it cost?
If you are a seller looking to sell a property FSBO, we do not charge a fee to begin the process and enter your information into the system. Moreover, the costs do not have to come out of pocket when you find a buyer. Instead, we will draft the fees into the contract to be paid out of the closing of the transaction (similar to a commission for a real estate agent). Depending on our role in your transaction, the fees may vary. Here are some basic options and costs for those services:
|Drafting the Purchase Contract Only||$250.00|
|Title Company Closing, Advise Seller||$250.00|
|Closing Performed by our Office||$350.00|
|Drafting a Note/Mortgage for Seller Finacing||$250.00|
|Drafting Lease w/Purchase Option||$400.00|
If you are needing services that are not listed above, please contact our office and we would be happy to provide you with a more detailed price quote.
Do I need title insurance?
If the buyer is paying in cash or the seller is providing financing, title insurance is not required to complete the transaction. However, it is strongly recommended that title insurance is a part of every real estate transaction. Title insurance protects the buyer (and mortgage company, if applicable) in the event another party claims an ownership interest in part or all of the property. We have experience working with many of the title insurance agencies in the area and can provide recommendations if needed.