 Helpful
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 I HAVE A FSBO
BUYER....NOW WHAT?
Hopefully these series of articles have
guided some folks through the buying and selling process. If you
are selling or buying a FSBO, after coming to an agreement on the
price of the home, I realized the next question would be “Okay, so
now what do we do?” I chose this month’s topic to try to guide you
through to complete the transaction.
Here are some guidelines to follow:
First off the buyer or seller
should have a contract available. Contracts can be obtained from a
title company, office supply store, or an attorney. You can
contact a title company and request a couple of contract forms.
They usually will cooperate in the hopes that you will bring the
signed contract back to them and use them as a title company.
Typically the seller chooses the title company for the real estate
transaction. If you are the buyer who has obtained the contract
from a title company, you may want to suggest to the seller that
title company for the transaction. The title company will set the
“wheels in motion” once they receive the signed contract. They
will be in touch with your mortgage company and will be involved
with the transaction until the end. Once the down payment amount
or preliminary deposit is agreed upon the title company will
deposit the check into their escrow account. On the contract you
can fill in that section with the title company’s name and the
dollar amount of the down payment or deposit. Ultimately you will
be sitting at a closing table in their office. The buyer can make
the check out to the title company’s name and give it to the
seller. Writing a check to the title company makes a buyer more
comfortable than writing it to the seller’s name.
Remember though
a seller may for whatever reason require that you write the
deposit check to them. That choice is made between the buyer and
the seller. When negotiating between a private seller and a buyer
there are always many options of handling the transaction.
I once
had a bad experience when selling my home. When the NEXT
prospective buyer asked me “What will it take for me to buy this
home?” My response was, “I am leaving the state and I am requiring
$5,000 as a binder written out to me.” Given my past experience
the buyer agreed. I contacted his mortgage company a couple of
days later and found out that he had an excellent credit score and
we left town. I had a friend appeared at the closing and gave them
power of attorney to close for me. This of course would be risky
for some people. My situation was not the norm, and I was lucky
that the buyer obliged. But with FSBO anything is possible.
As
buyers and sellers you should all sit down and go over the
contract together line by line. For example, what light fixtures,
appliances, window coverings, etc. are included with the sale of
the home? Of course most importantly the price! Then how the
monies will be distributed: Ex. $200 check today, $1,000 November
22nd, and the balance November 30th. (“the
balance” will now be your down payment paid in full). You can even
negotiate to give some monies now, a week, etc. and “the balance
upon closing”. I recommend that you have the seller sign it
before you take the time and money to seek advice. This way you
have a “signed” contract which will just need your signature to
finalize the deal.
If the friend or attorney suggests some
changes, you can write them down on a piece of paper and present
them to the sellers for their approval and/or discussion when you
return. Any “cross outs/changes” that you do on the contract, will
need to be initialed by the buyer(s) and the seller(s). (If it
becomes too much of a mess, I suggest you just re-write a new
contract). I usually use one contract form as a “draft” and do all
the crossing out, negotiations, etc. and write the final copy on
another new form. As a buyer, if you are dealing with a FSBO (For
Sale By Owner) and do not have the contract knowledge of what you
are going to be signing, you should have the seller sign the
contract and then take it to a knowledgeable friend, relative, or
an attorney.
If the seller does NOT have a contract available, I
would suggest you leave them a check for a “binder” to secure the
pending house deal. Then you must all decide who will obtain the
contract you or the seller (get two…one extra for mistakes). If
you have not agreed on a price and feel more comfortable offering
a price on a contract, then you the buyer should obtain the
contract. This will also give you the first opportunity to review
it and write in your requests regarding time frames, monies, etc.
and present it to the sellers for their approval and signature. If
you have not agreed on a price, then it will not be necessary for
you to leave a check (binder). But remember there is NO deal yet.
If you are really interested in the house, I would talk price
right then and there. Remember if you are a desperate buyer or a
desperate seller time is of the essence. If you put the
negotiation off until even tomorrow, you may lose the deal. Run
out and get the contract even if you must go to an office supply
store.
You can obtain more info and tips on negotiating and
signing a Seller’s Real Estate Contract and a Buyer’s Real Estate
Contract in my book. They are totally TWO different contracts
depending upon a seller filling it out for their benefit
versus a buyer filling it out for their benefit! This
article is just a small part of the process. As always, if you
have any questions, please contact me, I will try to help!
Irene
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