Oct 30, 2007
For Sale by Owner: Prospective Buyer Should Have Stable Credit
Many property owners decide to sell their real estate themselves rather than pay the steep fees to have an agency put it on the MLS (multiple listing service). When they make this decision, they are undertaking to do all the advertising, screening of prospective buyers, and completion of the legal documents themselves. It is no small undertaking and can be risky. Advertising is expensive, which is one of the reasons some property owners elect to use the Flat Fee MLS listing option. Especially since this option is available in all 50 states.
In this scenario, the property owner pays the up front fee to have the property entered into the MLS directory. If the property owner sells the property himself, and does the requisite paper work himself, no other commission is paid out. The up front fee is usually nominal, less than $300. That is a bargain for the nationwide coverage possible. However, if the advertising results in a real estate agent bringing a buyer to the property, the previously agreed upon commission (2% to 3%) would be paid out. While a lot of work, For Sale by Owner can be a very profitable way to sell a property.
When going the For Sale by Owner route some things are absolutely necessary. There must be enough time and resources to check that the person offering to buy the property has the money to do so. The prospective buyer should have stable credit and employment. This process is called pre-screening and would be done by the Flat Fee MLS agent before ever bringing a prospective buyer to the property. There also must be proof provided by the seller that the property title is in order and can be legally sold. A visit to the local title company will be necessary to obtain the paperwork, for a fee of course. The sales contract should be drawn up by a real estate attorney to ensure that once the sale is complete, it can be registered and will be legally binding on both seller and buyer. The owner going the For Sale by Owner route must also be prepared to make repairs to the property if needed, or reduce the selling price. A Flat Fee MLS agent would negotiate the offer and counter offer to determine exactly what is being bought and sold, however the when using the for sale by owner method, this is all done by the owner.
