For Sale By Owner
Residential Real Estate Attorney Guides Clients Through the FSBO Process in New Jersey
With the Internet and the desire to save on broker’s fees, many residential sellers want to sell their homes by themselves – without a broker. These types of real estate listings are commonly referred to as FSBO or For Sale By Owner. A seller can list the real estate online with photos and descriptions. Prospective buyers are then able to browse listings by price range, location, number of rooms, etc., before contacting the homeowner for a tour. Whether you are a buyer or seller in Manalapan, Freehold or elsewhere in New Jersey, it’s important to go through any FSBO process with an experienced New Jersey residential real estate attorney on your side.
The Advantages of FSBO for the Seller
It is not inexpensive to sell real estate in New Jersey. There are many reasons why a property owner might try to go-it-alone. These reasons include:
- Brokers’ Fees. Typical fees amount to about six percent of the total sale price. That’s a huge chunk of the profit, considering that on a $200,000 sale price, the seller will pay out about $12,000 in brokers’ fees! It’s understandable that many sellers would like to save these funds.
- Familiarity. Sellers know the property best. They may believe they can “sell” the house to prospective buyers faster than a stranger might be able to do so.
- Scheduling. Showing a house can often be inconvenient. Buyers are available on their own schedules and it’s not always easy to arrange tours through a middleman – the broker.
- Negotiations. Who better to be leading the negotiation discussion than the person — the seller – who will be making the final decision about the price of the property?
Many of the same thoughts that apply to a seller also apply to a buyer. Buyers know that the seller is not paying a broker’s fee. Therefore, they can bargain for a lower price. They also know the seller knows the property best.
How Do Sellers Arrange the FSBO Sale?
Most of the time, sellers list their property through an Internet home sales site. They also advertise in local papers, use lawn signs, etc. While a broker will maintain that they are in the best position to price the property based on comparable area sales, the Internet makes it easy for sellers to research the same information.
Reasons Why FSBO Sellers Still Need a Good Real Estate Lawyer
There certainly are many aspects of the sale that a property owner can manage on their own. However, you should always protect your interests by letting a knowledgeable residential real estate attorney craft the legal paperwork, such as the sales agreement. In some New Jersey counties, you must utilize a real estate attorneys during the process.
- Buyers need to qualify for a loan. Most buyers need a loan to buy a home. In order to get a loan, they need a lender. The lender will have a list of requirements before they get the loan. Some lenders will pre-qualify a buyer up to a specific dollar amount. A lawyer can help make sure sellers work with only qualified buyers so the sale goes through to completion.
- Sellers have to be careful about what they disclose. There can be legal pitfalls. Disclosure of property defects may reduce the selling price and put a burden on the seller to fix the defects. On the other hand, failure to disclose certain issues with the property may result in a lawsuit if buyers later discover the defect.
- There are local ordinance requirements. Sellers need to know which local, township and state building codes, environmental codes and other land use laws and zoning laws apply with regard to obtaining permits, etc.
- Sellers need to know the best way to handle disputes and to handle the closing. Small disputes can torpedo a sale. There are practical ways to handle disputes such as putting estimated repair costs in escrow. The closing is where there transfer of money for the deed to the house is done and all the documents are signed. A lawyer will make sure the closing goes through smoothly.
- Standard contract terms may need adjustments. Most residential contracts begin with a standard form. However, each sale has its own special circumstances and often buyers ask for certain allowances such as a quick closing or a contingency until they sell their current home. Further, issues often arise about which fixtures stay and which ones the seller can take. The standard agreement of sale should be reviewed to include whichever requests are agreed upon by both parties and to address any ambiguous language in the contract.
- Title issues may affect the sale. Sellers need to give clear title. Any liens or easements of judgments or mortgages will need to be addressed. The title report must be reviewed so that any outstanding issues can be addressed so the sale can go through. Your lawyer can also review any surveys of the property.
Garland & Mason, L.L.C. Will Help You Sell Your Property Yourself
To discuss your real estate needs with our highly qualified New Jersey real estate attorneys, call Garland & Mason, L.L.C., at (732) 358-2028 or contact us online.
We offer a free initial consultation. Our Manalapan law firm serves clients with real estate transactions in Mercer, Monmouth, Ocean, Middlesex, Marlboro and surrounding counties of New Jersey. Our office is handicapped-accessible. The office is just 15 minutes from the New Jersey Turnpike and the Garden State Parkway. Parking is free.