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So, you want to sell
your home yourself?
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By Robert N. Bass, Attorney at Law, Phoenix, AZ
When Larry and Beth decided
that the time had come to sell their home, they asked
themselves: "Why do we need a real estate agent? After
all, an agent will charge thousands of dollars to sell even an
average home, and that commission comes right off the top!
Heck, we can do practically everything an agent would do, so
why should we pay out all that money?" Many home sellers
have similar thoughts, and because so much money is at stake,
these questions deserve some serious thought.
Any real estate agent can give
you an impressive list of reasons why it makes sense to hire a
professional to help you sell your home, and from a marketing
perspective, there are indeed many benefits in doing so. An
experienced agent can utilize any number of marketing
opportunities and strategies that the typical "For Sale
by Owner" (a.k.a. "FSBO") does not even know
about. For example, only a professional agent can take
advantage of the Multiple Listing Service, organized tours,
etc. However, there is another reason to seek professional
help in selling your home; an important reason that you may
not have thought about.
In today's world, the sale of
real property is not just a marketing exercise; there are many
legal issues involved, which can create liability in the
sellers. Of all the things you want and expect from selling
your home, a lawsuit is probably not one of them!
Unfortunately, residential
transactions have seen an alarming increase in the number of
claims and lawsuits. Of these claims, the majority are filed
against the sellers, by their buyers. Home sellers who think
they can "go it alone" might want to seriously
ponder the observations of a lawyer who has defended many
sellers and real estate agents against claims made by
"the Buyer from Hell."
In most states, the process by
which title to real property is transferred is rather
complicated, and the typical home seller is not familiar with
the many legal issues that can and do arise, even in a fairly
simple transaction. Important decisions must be made
concerning contract terms, escrow matters, transfer of title,
apportionment of costs and any number of other matters. Also,
bear in mind that a simple missing word, or a mistake in the
grammar can create a dispute which, in turn, can give rise to
a lawsuit. Aside from the problem of drafting the contract
language itself, sellers can face other dangers as well. For
example, did you know:
- that in most states, there
are substantial risks involved when a sellers agrees to
"carry back" a note from the buyer; risks than
can cost you thousands of dollars?
- that your good credit rating
could be ruined by your buyer's default, many months, or
even years, after the buyer "assumes" your loan?
- that a clever buyer may be
able to stay in possession of your property for many
months after he defaults on the contract, and in effect
"live for free" at your expense?
- that most buyer complaints
involve alleged damages of less then $10,000, yet it can
cost you thousands in attorney´s fees to defend such a
claim?
In short, a lawsuit can ruin
your whole day! Even if you know the buyer's claims are
completely bogus, it can take many months and many thousands
of dollars to prove that you are "innocent." What's worse,
you have no "malpractice" insurance to pay
these legal bills; you will have to write all those checks
yourself. And, of course, you could lose ... and losing a case
like this can be disastrous. You and the buyer have a
contractual relationship, and in many states, sellers who lose
such suits could find themselves having to pay not only the
amount of the damages awarded to the buyer, as well as their
own attorney´s fees, but they may also be ordered to pay the
fees of the attorney who sued them!
Experienced, professional real
estate agents understand these kinds of risks, and they can
help you to minimize them in a variety of ways. They devote
many hours to training and educational programs which
emphasize risk reduction, and protecting their client's interests.
There are any number of reasons
why your buyer may decide to take action against you
(sometimes, they just don't feel like making the payments any
more!). However, most of these complaints allege problems
relating to the condition of the property, and/or alleged
representations made to them about the property or the
transaction. An experienced agent knows how to reduce the risk
of these types of complaints, by including, or suggesting that
your attorney include, effective "AS IS" and other
clauses in the contract language, and by providing for such
things as a professional home inspection, and a home warranty.
When a problem arises in the
transaction, an experienced agent can move swiftly to
"nip it in the bud". Their thorough understanding of
the myriad facets of modern transactions can help them to
identify the real problem, and then to either solve it
themselves, or seek help calling upon resources that the
typical seller simply does not have access to.\
There is no
escaping it; the best way to deal with a complaint is to
prevent it in the first place. The organized real estate
community has spent a lot of time thinking about how to reduce
the likelihood of claims, and has responded to this threat in
a number of ways. For example, the standard contract forms
that agents in many states use, are chock full of language
which can help protect you, and reduce your exposure to claims
and litigation. If you are in a state in which real estate
transactions are handled by attorneys, many of the problems
discussed herein will be minimized, but a top-flight agent can
still play a major role in helping your sale move toward a
smooth closing.
Of course, I don't mean to scare you with all this! But hey, it IS a
jungle out there. Indeed, I've only touched on a few
potential pitfalls of selling your home on your own. Take this
from someone who knows: selling your home without professional
help is very risky business indeed. Yes, it costs money to
employ a real estate agent, but if you find the right one, you
will likely be able to sell your property faster, while at the
same time reducing the chances that your buyer will come back
to haunt you
Related
links
Not convinced? Here
are a few other articles about selling your home yourself and why
it's a bad idea, plus a few other links to my website.
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I hope you
found this article helpful. Selling your own home yourself can be
a major challenge. An experienced agent can guide you through
the paperwork, legal issues, and other hurdles involved, to
make selling your home as stress-free as possible.
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