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You're a successful for-sale-by-owner. You've found the buyer. Your job is over, right? Wrong! In most real estate transactions, once the buyer is found, the FSBO's work has just begun. What I term “meat-in-the-middle” is often the most substantive part of the real estate sale. Handled improperly, the for-sale-by-owner may find himself back at square one---no buyer, no sale, left only with wasted time and expenses to show for his effort.
In Part I of this article, we discussed the mountain of time required for FSBOs to successfully navigate the sale. But let's assume that you do have the time. In fact, you have found a serious buyer.
What components will you find in the “meat”?
The potentially greatest hurdles in navigating the critical mid portion of the transaction are to:
Make sure the buyer is pre-approved for financing; stay apprised of loan processing (& subsequently, the closing!) Hopefully, you're working with a savvy buyer who is pre-approved with a lender for the loan they need; but if the topic hasn't yet come up, YOU need to bring it up---even before you enter into a purchase and sales agreement. Why waste precious time negotiating with a buyer who doesn't yet have financing nailed down? Once you know that the buyer is pre-approved for a mortgage (with documentation from the lender) you'll need to stay abreast of the loan processing, either through the buyer or by directly interfacing with the lender. This becomes critical, especially for orchestrating the closing and moving sequences.
Negotiate with the buyer: This is one of the most over-looked areas where hard-earned equity can slip from your fingers. And frankly, many of us realize that negotiating on our own behalf can be much more difficult than it sounds. (I personally believe that if you don't hire a professional for any other part of the FSBO sale, this is one area where you stand to lose the most by going it alone.)
Complete the “due diligence” information and paperwork on the property for the buyer: This includes information about the property (square footage, property tax amounts, etc.) as well as any Property Disclosure form required in your state. (Just because you're a for-sale-by-owner doesn't mean that you're exempt under state disclosure laws.)
Orchestrate the puzzle pieces like the appraisal, the home inspection, the termite inspection (if applicable), the buyer's final walk through inspection, etc. Out of all of the “meat,” this may be perhaps the easiest for the FSBO since many of the appointments are done by various parties involved calling you with requests. But if problems should result from these puzzle pieces (like work repairs requested by the buyer or a lower appraisal price than agreed to on the purchase and sales agreement) be prepared to ---
Renegotiate with the buyer and bring the sale to a close: It may be something minor like adjusting the sales price downward by $500, or something major like a disintegrating roof, a lot line in question, or even a title dispute. But hang in there. If you can leap over this last hurdle and (finally) close the sale, you've done it. You've sold on your own!
Now for some real estate reality therapy. Not everyone is cut out for being a negotiating/troubleshooting/second-job FSBO. Maybe you're doing okay until you hit a brutal roadblock like having to renegotiate or lose the buyer. At this late date, where can you find the professional help you need (no, not psychiatric, but real-estate related) to save the buyer, the sale, and get on with your life?
Stay tuned. We'll share solutions with you in Part III of this article to follow on Friday, June 30th.
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