Aishani A. demystifies the American real estate market for readers, catering to first-time homebuyers, sellers, and seasoned investors. In her free time, she enjoys exploring the city's hidden gems.
Find Aishani Here✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.
409,000 home sellers across the country opted to sell FSBO in 2023. Each of them saved nearly $10,000 in listing agent commissions. Moreover, 55% of millennials are comfortable selling their homes themselves. While sellers are open to FSBO, for 7% of them the paperwork was a major issue. The problem with FSBO paperwork is drafting the contract and to ensure you don’t get a bad deal. FSBO Paperwork can systematically be resolved with the help of real estate attorneys. Or, you can opt for a FSBO Flat Fee MLS platform like Houzeo. When you sell with Houzeo you get contract assistance from listing to closing. You benefit from saving thousands in listing agent commissions in the Golden State. You also get maximum exposure to home buyers by listing on the California MLS.
A For Sale By Owner contract contains the terms and conditions of your home sale. These terms include contingencies, deadlines, and closing processes. A For Sale By Owner contract in California is also called a “For Sale By Owner purchase agreement”.
A well-drafted FSBO purchase agreement protects you and the buyer throughout the transaction. In the contract, you need to include elements such as:
A simple For Sale By Owner contract has the purchase price, down payment, and closing date. Mention who pays the closing cost, or if it should be split between both parties. Also, include contingencies if the conditions of the home sale are not fulfilled.
Define parameters if the buyer needs to finance the property through cash or via a lender. This should include the loan the buyer opts for and the earnest money deposit. Add a timeframe for the buyer to secure the financing.
Also, include the option to return the buyer’s earnest money if the financing falls through. For all-cash deals, mention the minimum percentage of a bank transfer or if you’d like hard cash.
» Home Value Calculator: Get an estimate of your property’s worth before planning your budget.
Allow the buyer to arrange for a home inspection. Set in place certain clauses should any critical issues arise during the inspection. Also, set a deadline for the inspection or any repairs if you undertake them.
If extreme cases arise, determine the dealbreakers for a termination of the sale. In minor instances, decide if the home’s price will be renegotiated.
A deed mentions the exact title you will transfer to the buyer. The most common way to transfer a property title is by warranty deeds. Unless married, be careful how you want to hold property jointly in California. A deed is completed at the time of purchase and can be amended to include or exclude certain names.
Double-check the name on your property in official land records from the county assessor’s office. You must also include the timeline for the transfer of the title. This section should specify the title company as well as who pays for title insurance.
Here you should clearly outline the consequences if either party breaches the contract. Specify methods to handle missed payments and delays. Mention contingencies in case of a failure to close within the predetermined date.
Ensure that none of the contingencies give you the bad end of the deal. If any contingency applies, you should be able to back out of the contract.
This section must include relevant California seller disclosure forms. Here you must pledge that you abide by California’s laws for seller disclosures. It contains details such as the ownership history, tax status, and any known home defects.
Was your home built before 1978? Then make sure you submit the “Lead-Based Paint Disclosure” (addendum) with the contract.
This section notes procedures for settling disputes that may arise throughout the transaction. List arbitration or different mediations as a substitute for dispute resolution. Instead of going to court, hire a real estate lawyer to help you reach the best amicable solution.
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