Finding a Good Lawyer
You will have by now found a lawyer to work for you during the offer and negotiation period. A good way to find one is through a recommendation of a friend. You may know someone who has recently moved, and had a good experience with a seasoned lawyer. You can always chat to a few in your local town and see who seems most helpful and keen for your business.
When selling FSBO there’s no need to feel intimidated by the thought of contracts and negotiations. Your lawyer is there to help you understand all the contractual lingo, and ensure that you sign a contract that is safe an beneficial to you, just as if you were selling through an agent. The lawyer is very much part of your contract negotiations, and can supply you with all the contracts you shall need.
When selling privately without an agent, you may get offers from buyers that are represented by an agent. It’s important that your lawyer makes clear that your asking price does not include the cost of commission to any agent. Perhaps the buyer is insistent on using his or her agent. That’s not a problem - just make sure that their final offer includes the cost of commission to their agent. They would add the cost of the agent to their final offer price - in writing, of course. You may have to negotiate an agents commission if the buyer has been sourced your property through them. Usually around 3% of the sales price. Alternatively, you can state at the start of your marketing, on your listing: ‘Sales price includes agents finder fee of $400.’
Can the buyer get a loan?
When we find out if a buyer can get a loan before you agree any deals, we call that ‘pre-qualifying’. This is important to establish before any contracts are signed. You can maybe agree a price, but can your buyer get the cash? Do they qualify for a loan? Make sure not to commit to someone who has not been qualified for a loan. You lawyer can guide you. One of the major lenders will be able to help you. As we said before, the sales price is important as the lenders will use the sales price you agreed and compare it to their evaluation. Their are many mortgage guides online to help people choose which mortgage product is ideal for them.
Disclosure Documents
Disclosure documents inform any potential buyer about your property, and if there are any problems with it. In some countries they are required - if appropriate, your lawyer can advise you on this. Sometimes a potential buyer shall request a disclosure document. You can also, for a small fee have a property inspector come round and inspect your home for any problems there may be with the property. It’s a good idea to get one, as problems with the property can stall any possible deals with a buyer if they find problems. You can make it available to any serious buyers and they will appreciate your efforts.
Accepting an Offer
When you get an offer from a serious buyer (in writing) who is qualified for a loan, their offer will include all the usual notices: the offer price, what is included in the sale and any conditions. You will also be given a period in which to accept the offer, usually around 1-3 days. You will review this with your lawyer and discuss your options. You will always review any contract through your lawyer. If you read the offer and there are some things that you would like to re-negotiate, then you will make what’s known as a ‘counter-offer.’ You will also produce this with your lawyer.
The buyer will usually offer lower than your initial asking price - so from here you negotiate to what is a middle ground, if you want to. As we have said, your own personal circumstances, and the interest in your property from other buyers will dictate how much you are prepared to accept. With any luck, you will be dealing with multiple offers! This process may go through several negotiations, until a compromise has been reached.
You must be prepared to be patient and if you can, wait for the offer to come along that suits you.
You can do a search on current listings by clicking here and research how much similar properties are selling for in your area.
Read Part Seven for more FBSO Top Tips.