Deciding to sell your home by owner
can save you thousands of dollars, but it can also be confusing to the
non-real estate expert. In fact, the complexities of a real estate
transaction are one of the main reasons most people use real estate
agents to sell their houses. But you might be surprised to discover
how much help you can get in selling by owner. Indeed, the process
can be just as smooth as using an agent, without paying the hefty
commission, of course.
Below you will find information on how the following professionals can
help you make the best of selling your property by owner.
Loan
Officer
Escrow Company
Title Insurance Company
Real Estate Lawyer
Real Estate Agents
Once you decide to sell your property by owner, one of your first
contacts should be with one of our reputable Loan Specialist.
This person can pre-qualify all prospective buyers that have not
already been pre-qualified for a home loan. This service will
keep you from wasting valuable time with “lookers” that are not
serious about buying, or that cannot qualify for a loan. You
don’t want your property off the market, while you wait to find out
that the buyer cannot qualify for a loan. But the usefulness of
the Loan Specialist extends beyond qualifying prospective
buyers.
Our Loan Specialists can refer you to a certified appraiser. You don’t
have to have your home appraised before deciding on the sale price,
but doing so can prevent you from learning late in the process that
your price was too high, or too low. Once you have your home
appraised, don’t share this information with prospects.
Our Loan Specialists can provide a variety of financing options for
your prospective buyers. There are many attractive loan programs
available that can help your prospects purchase your home. You
might even find it helpful to place our toll free telephone number on
your flyers. Offering to do this is a strong incentive that can
secure valuable assistance from our Loan Specialist.
Since our Loan Specialists are routinely involved in numerous real
estate transactions, they can also recommend other companies that will
help you through the process. These companies include Title
Companies, Escrow Companies, Attorneys, and Home Inspectors nationwide.
Our Loan Specialists can also walk you through the process of paying off
your existing mortgage.
Best of all, since Loan Closing Fees are paid by the
buyer, most or all of these services can be yours for free. BlueMortgage
Loan Specialists are ready and willing to assist
you through the process of selling your
home by owner.
You’d be wise to work with a BlueMortgage Loan specialist as we have a
variety of Specialty Loan programs and can tailor one to meet
your prospective buyer's unique loan needs based on their individual
economic situation.
Once you sell your home with one of our Loan Programs, you can also use our services to qualify for and obtain a loan on your next
purchase with a returning customer discount of 10% off your
closing costs. This is another reason why many home buyers and
sellers chose BlueMortgage™
as a trusted financial source.
2. Escrow Company
Escrow is perhaps the most essential element of a real estate
transaction. The escrow company functions as an intermediary between
the seller and the buyer, protecting the interests of both. When a
property is purchased, the funds flow from the buyer, or his lender,
through the escrow company to the seller, or his lender. But there is
much more involved in the escrow process. Other vital services
performed by the escrow company can include:
-
Preparing and
providing the escrow instructions to the seller and buyer
-
Ascertain the
legal ownership of the property, including all loans and other
encumbrances, through a title search
-
Confirm that the
property meets the qualifications required by the lender for the
loan to be funded
-
Confirm that the
buyer meets the lender's qualifications to purchase the property
-
Confirm that all
legal documentation is complete and accurate
-
Confirm that all
financial obligations have been correctly prorated
-
Close escrow when
all obligations have been met by the seller, buyer, and involved
lending institutions
-
Disburse the
funds to the respective parties (seller, seller's mortgage company,
title insurance company, etc.)
-
Complete final
statements
Escrow services are
frequently performed by stand alone escrow companies which are
licensed in their respective states. Escrow services can also be
performed by banks, savings and loan institutions and some title
insurance companies. The activities of escrow companies are subject
to review by state governmental authorities. This oversight protects
property sellers and buyers and ensures that the activities performed
by the escrow company stay within the confines of the law.
When purchasing a property that is for sale by owner, the buyer can
use the escrow company of his choice. The escrow company can also
help the buyer identify companies that provide other services that
will be essential in the transaction (i.e. title insurance company,
certified appraiser, home inspection company, etc.).
In view of the key role that the escrow company plays, the buyer
should be sure to select a reputable company, known for the quality of
its service in the community.
3. Title Insurance Company
Another important contact to make when selling your home by owner
is the Title Insurance Company. Title insurance protects the buyer in
the event that any hidden liens or claims are discovered after you
transfer ownership, or title of your home, to a new owner. The Title
Insurance Company performs a thorough search to insure that there are
no hidden liens or claims on the property that you are selling.
If you discover that your title is not clear, you will want to clear
this up immediately. The Title Insurance Company can provide you with
the needed direction.
Examples of such
hidden liens or claims can include:
-
Liens from a
prior foreclosure
-
Property
easements which could allow your land to be used for other purposes
-
Tax liens from
the Internal Revenue Service
-
Long lost heirs
to the property
-
Forged or
falsified property records
In most real estate
transactions, the seller must provide a title insurance policy
covering the buyer. The buyer receives such a policy when escrow
closes. Nevertheless most, if not all, lenders also require the buyer
to obtain title insurance covering the loan amount. The buyer usually
pays for this policy and it must provided to the lender when escrow
closes.
If any claim or lien appears after you have sold the property, the
title insurance policy will reimburse the new owner for the losses
covered under the terms of this policy. Although rarely needed, the
protection provided by the Title Insurance Company is absolutely
essential.
In many cases, the Title Insurance Company can also provide you with
the forms that you will need to sale your home. They may also be able
to hold the deposits you receive when someone makes an offer on your
property.
The Title Insurance Company can also assist you with the Closing.
They can be of great assistance in paying off your existing mortgage
as well as preparing the Closing Statement and related documents.
Many Title Insurance Companies provide specialized services for
properties that are being sold by the owner.
Because Escrow Companies provide many of the same services offered by
Title Insurance Companies, you'll need to make sure that you
understand who is doing what when you sale your home. As a rule of
thumb, Title Insurance Companies usually only assist with title
insurance unless specifically requested to do more. Escrow Companies,
on the other hand, have a much broader role in the transaction, and
can assist you in addressing areas you might have overlooked.
4. Real Estate Lawyer
This
sounds complicated, but it isn’t. In order to complete a real estate
transaction, you will need the expertise of a lawyer to protect you.
Any offers you receive will likely include some difficult to
understand clauses or conditions. Your lawyer will help this make
sense and will keep you from committing to something that is
unacceptable.
When selecting a lawyer, you’ll need to determine if they will be
available to review offers with you, or if they’ll only help you once
you accept an offer. You’d be better off with the services of a
lawyer that will be able to review offers. Of course, you will want
to know how soon after receiving an offer your lawyer will be
available to review it. After working this hard, you don’t want to
lose a valid offer because your lawyer dragged his feet.
Be sure to request a fee schedule prior to selecting a lawyer so that
there will be no surprises. Find out how many hours they typically
spend on a real estate transaction. This is an expense that you
cannot avoid, but you will still come out far ahead of the commission
that you would have given to an Real Estate Agent.
5.
Real Estate Agents
When
selling by owner, the idea is to save the money that would normally go
to real estate agents. How then can real estate agents be of
assistance, yet not cost you a hefty commission? Believe it or not,
real estate agents can be of assistance to you when you sale by owner.
The main advantage of working with a real estate agent is their access
to the Multiple Listing Service. The Multiple Listing Service makes
your property information accessible to all subscribing real estate
agents in your area, which is the majority. Any agent looking for a
property that matches your property’s criteria (location, price,
square footage, number of bedrooms and bathrooms, etc), will identify
your property. They can then make an appointment to show interested
clients your property. You thereby will have the assistance of
virtually all real estate agents in your area. It is estimated
approximately 75% of properties that sell do so through the Multiple
Listing Service.
Additionally, many Multiple Listing Services place property
information on well-known Web sites at no cost to the seller. With
increasing numbers of homebuyers surfing the web in search of a home,
this can be a tremendous advantage. As you can see, it can be
extremely advantageous to use your areas Multiple Listing Service.
But it can also be difficult, unless you agree to pay the standard
commission. You would be wise to try to locate an agent that will
place your property on the local Multiple Listing Service for a flat
fee. This fee should be well below three percent, otherwise you won’t
save much money selling by owner.
You should also realize that using the Multiple Listing Service will
likely bring you offers from buyers that are represented by a real
estate agent. Buyer’s real estate agents will expect to be paid a
three percent commission, unless you stipulate in no uncertain terms
that you will only pay two percent, or some other amount. There is no
law that states that requires you to pay a three percent commission to
an agent that brings you a buyer. You should be aware that offering
anything less than the standard three percent could cause a buyer’s
agents to be less than enthusiastic about showing your property to
their clients.
If your property is in a “hot” market, you won’t have much difficulty
selling, even at a reduced commission to any agent’s involved in the
transaction.
If you hold open house, you can expect real estate agents to come by
with their clients. If an agent brings his client to your open house,
he might expect to make a three percent commission if his client is
interested in your home. This type of transaction is known as a
co-op. You will have to decide if a co-op arrangement is right for
you. It might result in a faster sale, but you will still be
obligated to compensate the agent. If an agent brings you a buyer,
you might state to the agent that you will only pay a two percent
commission or a flat fee to any agent that brings you a buyer. It
won’t hurt your position to state this in front of the agent’s
client. If you decide on a flat fee, don’t insult the real estate
agent. Anything in the range of 1 ½ to 2 percent would be a
reasonable finders fee.
