A relative of mine recently decided to sell his unique property by himself. He said he’d done it a couple times before, in the 80s and 90s, so he felt comfortable doing so. They live in another state, so I wasn’t able to give any good advice other than the generic things you’ve already read about. Legalities and ethics are often different from state to state, as are paperwork required.
His property is rural, and has a very unusual type of home, small at that, with horse barns and fencing. Often, these factors really narrow your Buyers, making your wait for a buyer much longer.
We were all surprised when what seemed to be the ‘perfect buyers’ came along. They didn’t want to haggle on price or ask for any changes. The problem is, though, that they had recently bought another home in the area, and now would either have two mortgages or must sell or rent out the first one. In the area they live, it’s military base central, so rentals are fairly easy to get folks in.
Just the other day, the sale stopped dead in it’s tracks. The mortgage company would not agree to the new mortgage for the Buyer. Not sure if, once they rent out the first house, the lender would then go ahead with it. Relative decided to allow Buyers to lease the property for a year, then they MUST buy (not sure how you’d force someone to do so…) He’s going to consult with a lawyer today about it. This will cost money. The lawyer doesn’t have stake in the outcome. Lawyers just do what you tell them (as long as it’s legal), and don’t know the real estate market. Can the lawyer advise that, perhaps in a year, the market in that area might diminish? That would make it hard for Buyer/Renter to get the mortgage at the contracted price. My relative will have to take less. But maybe the market will improve, and my relative will not get the same amount of money he now could if it were on the open market. He’s either restricting his marketability, or possibly courting a lower price in a year.
And the Buyer is military. He may get deployed at any time. We all know what that may result in…sadness. Then what about the house deal? Or what if he gets re-assigned to Germany for 2 years? Home sales in that area are always moving because families get re-assigned.
Maybe all will turn out well. What would I advise, if he were my client? I’d probably tell him to put it back on the market with a lease to the first folks (he really wants to be the nice guy and let them lease to buy) and a kick-out clause of 60 days (removal of loan contingency) so that if another offer comes in that can actually close, my relative can be done with the process. There’s a medical situation in the family, and dragging this on with no concrete solution on the near horizon isn’t likely in their best interest.
When you decide to FSBO your property, we all know you can get a company to list you on the MLS or you can enter a good ole Z-llow Make Me Move entry. But do you lose the market knowledge and the advice of someone who runs into these situations every week? Yes. Even some of the now ‘save seller commission’ agencies have an issue of not having experienced agents, and we experienced ones bear the brunt of making sure things are done right. On that note, don’t expect to give less than the current ‘expected but not set in stone’ commission percentage to that angel of a Buyer Agent if you get a deal going. (oh, yeah, very few Buyers go around without an agent, so expect to pay that commission).
I know the allure of saving some money seems to be the shiniest object in the room. There are so many facets to that shine, though. Do you have the experience to know what they mean to you?