Listing a residential property for sale by owner (FSBO) can be a cost-effective solution for those who don’t want to lose 6% or more of their property value to real estate agents (for now – that commission rate is now changing). They choose to handle marketing a property and negotiating its purchase on their own behalf.
However, it can be risky to handle complex real estate paperwork without any support. For example, some buyers might submit offer documents that include unfavorable terms. Sellers unfamiliar with the real estate industry might put themselves at a disadvantage by accepting the wrong offer.
What types of terms do sellers need to watch for in offers made by potential buyers?
Contracts may offer uneven protection
There are several main parts of the offer that could prove more useful for buyers than sellers. Contingencies are an example. Buyers may submit offers that include numerous contingencies, Each of which might allow the buyer to walk away from the closing after taking up weeks of the seller’s time.
Buyers might also include a very near possession date coupled with an expensive post-closing occupancy agreement. These terms set a daily rate for the seller remaining in the home after the closing. In some cases, the amount could be hundreds of dollars per day. Sellers need to watch for these and other unfavorable terms before committing to a buyer’s offer.
Sellers who are listing their properties FSBO might require help when reviewing purchase offers and other key contracts related to a transaction. Learning more about terms sometimes included in real estate offers, and seeking legal guidance accordingly, may benefit those preparing to list a property on their own behalf.