by the LBW Real Estate Department
This pamphlet, provided by the LBW Real Estate Department, provides some important points to consider when selling a home privately.
Can I Sell My Property Without a Real Estate Agent?
Yes, you can. Whether this is a good idea or not, is another question. Selling property is a tricky business. We always caution people against heading into “uncharted waters” without professional advice. Certainly real estate agents charge for their services and these costs are saved if you sell privately; however, agents are professionals and are capable of providing valuable guidance when selling property… the fee you pay an agent may very well be worth it.
There are circumstances where selling privately may make sense. If you already know someone who is serious about buying your home for example, it is likely that a real estate commission could be avoided. But remember, even in these circumstances, a property can be listed and simply exclude a potential known buyer from the listing agreement, so that if these people purchase your home, the commission is either reduced or waived entirely.
You might also consider retaining a firm that specializes in providing services that enable you to sell privately. A law firm can provide such services. This falls somewhere between actually listing the property with an agent and proceeding solely on your own.
What Should I Do First?
The first thing you must do is determine the realistic value of your property. This can be done by obtaining an actual appraisal from a real estate appraiser or an “opinion as to value” from a real estate agent. You will pay for this information, but it is money well spent since you must know the realistic value of your property before you proceed. It is not a good idea to self assess the value of your home since you may sell yourself short or seek a price that is unrealistic, making your efforts to sell unattractive.
How Do I Market And Show My Home?
Advertising in the local newspaper and media would be an advantage, along with the posting of a “For Sale” sign. It may be worth your while to have a sign prepared by a professional to create a good impression. Clearly you must go through your home with a critical eye and make sure everything is in working order. Ensure that your yard is as presentable as possible as well. There are firms that provide the service of making sure your property is presented in the best possible light. Again, these services cost money, but it may be money well spent.
You might consider having your property inspected by a firm that provides home inspections, particularly if your home is older. It is most likely that a potential purchaser will want your home inspected before proceeding and so, if this is done in advance, you can offer the property for sale in a “certified” condition. If the inspection reveals deficiencies, it is best to know of any problems in advance in any event, and you can then decide whether or not completing the repairs would make the property more saleable.
During the actual showings, make sure your home is bright, clean, orderly and arrange for pets to be out of sight. It is usually best to arrange appointments for the showing of your property.
It is helpful if you prepare a “feature” sheet setting forth in a brief clear manner, pertinent details related to your home, things such as address, lot size, type of heating, taxes and any other unique features. Make sure that this sheet contains accurate facts only. This sheet can be handed to interested parties.
What About Additional Items Such As Appliances?
You must decide at the outset what, if any personal items you propose to sell along with the real estate. Some, or all, of your appliances may be included along with other large items such as pool tables or pianos. It is a matter of negotiation as to whether these items are included in the sale price of the property or sold separately. It is best to have thought these things through before you start to show your property. Remember also, to clarify which items within your home are on a “rental” or “time purchase” basis such as a furnace or a hot water tank. Confusion about these items can cause problems later if not clarified at the outset.
You need to ensure that articles being sold or those on a rental basis are clearly set out in the agreement of Purchase and Sale discussed below.
What Do I Do When I Have A Willing Purchaser?
Once you have a party that is prepared to purchase your home, it will be necessary to have an Agreement of Purchase and Sale prepared and signed. This is normally the responsibility of the purchaser, but could be arranged by you as vendor as well. If you have been using a lawyer throughout this process, that lawyer can assist and we strongly suggest that you have this contract prepared by a lawyer.
You should reach an agreement with the interested buyer on the following key issues and then this information can be presented to the lawyer with instructions to prepare a formal Agreement:
- Parties – Get full names of all sellers and buyers.
- Purchase price
- Deposit (this should not be insignificant – we suggest somewhere between 1% and 5%).
- Appliances – Clarification as to personal items being sold, not sold or rented.
- Conditions – Any conditions that either the buyer or seller may require such as arranging satisfactory financing, selling a home, or performing a professional home inspection. From your perspective as a seller, the fewer conditions the better.
- Closing Date – This is the date of possession and the date the transaction “closes”. Choose a weekday that works for both seller and buyer. Remember that there must be sufficient time to allow the respective lawyers to perform their services.
Once the Agreement of Purchase and Sale is prepared it must be signed by all parties. We suggest four copies be signed – one for each of the parties and one for each of their lawyers. The deposit is normally held “in trust” by the lawyer for the seller and will be credited to the buyer on closing. Again, we remind you that it is always a good idea to have the agreement reviewed by a lawyer before it is signed, particularly if real estate agents have not been involved in the process.
What Comes Next?
At this point make sure each lawyer has a copy of the Agreement of Purchase and Sale. Once all conditions have been met and removed, the lawyers will carry out their respective duties leading to the “closing” on the date set out in the Agreement as the date of closing. This is also the date that you as seller, must deliver vacant possession.
It is now time for you to start the endless and tiresome task of packing…good luck, and remember, throughout this entire process to stay calm and that the sun will rise in the morning.
At Lancaster Brooks & Welch we recognize that selling real estate is an involved process, particularly if you choose to proceed without the advice and guidance of a real estate professional. We encourage you to seek the advice of a lawyer throughout this process and certainly before you sign a legal contract. Any of the lawyers in our Real Estate Group would be happy to assist you.