HOW TO BUY OR SELL FSBO PROPERTIES

FOR SELLERS

Step 1: Prepare property disclosures. Contact the agency that oversees real estate sales in your state and ask which disclosures you are required to make. Many state agencies offer disclosure forms online in PDF format. Disclosures typically deal with the condition of the property or facts about its location, such as:

  • How old is the property and its contents?
  • Do problems exist with any components?
  • Have you (or a neighbor) built something such as a shed, fence or a driveway that extends beyond property lines?
  • Other issues important to your specific location

If your house was built prior to 1978, federal law requires that you disclose that the home could contain lead based paint and give buyers details about past tests for lead paints. You must also offer buyers the opportunity to do their own lead paint testing. You must also give your buyers a lead paint pamphlet, which is available free online from the EPA.

Step 2: Typically the buyer provides the offer to purchase contract. If you aren't contract savvy, have a real estate attorney review any offer before you sign it.

Step 3: The buyer will submit earnest money with the offer. This money is NOT yours until the house sells or the buyer breaks the contract. It should be held in a trust account until then.

Step 4: Upon acceptance of the offer, contact your attorney and/or title company to facilitate the closing. It's just that easy!

FOR BUYERS

Step 1: Get pre-qualified for a mortgage. This can help your negotiating power by being able to make the process move more quickly.

Step 2: To make an offer on a property, complete an Offer to Purchase Real Estate form. You can find and prepare these forms through your mortgage lender, attorney, etc. Your offer should spell out what you are willing to pay for and what you are not, when you want to close and when you want to take possession of the home. Your contract should be contingent upon getting an inspection and evaluating the results. If the inspection reveals a big problem, you and the seller can renegotiate the agreement if you are still interested in buying the property.

Step 3: Submit an earnest money check (deposit) with the offer. The amount of the deposit varies, but is typically 1% or more of the purchase price. If you buy the house, the earnest money is usually credited to the purchase. If the contingencies in the offer are not met, the earnest money will be refunded to you. However, the earnest money will not be refunded to you simply because you decide that you no longer want the property. The earnest money will be held in a trust account, usually by a third party.

Step 4: If your offer is subject to an inspection, you are most likely responsible for making arrangements for the service.

Step 5: The seller will make arrangements for the closing. Often the borrower will work with an attorney or legal services agency. Your mortgage lender, title company and/or attorney can help you through this process.


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