Sunday, March 4, 2018

WHAT MESSAGES ARE REALTORS REALLY TRYING TO CONVEY?

YOU SHOULD REALLY PAY ATTENTION TO THE MESSAGE!!

This info graphic was posted on Pinterest by a Texas real estate agent. I believe that it was created by a company that works for real estate agents who are members of their group and agents can purchase or use these info graphics for their own benefit. This particular ad is the very reason I am writing this blog - For sale By Owner the Ultimate DIY Project. There are multiple misstatements made in the ad about what a Realtor© does for his client including a claim that a Realtor© can net you more money.

First, let's revisit who negotiates with who. As a FSBO seller you will definitely negotiate with the buyer directly and maybe even his agent if you chose that route. There will never be an occasion when you will enter into negotiations with a bank, the loan is the sole responsibility of the buyer. If you could negotiate with the inspection company then you could be accused of the new popular and now familiar term called collusion combined with setting yourself up with a lawsuit, especially if you were able to convince an inspector to hide a major defect from his report. Appraisers are hired randomly by banks and never negotiate their fee or their results. They are as isolated and independent from buyers and sellers as you can get. As I have stated in my previous blog, you don't negotiate with Title Companies, the buyers chose them, both parties hire them to determine and insure clear title to the property, that's as simple as it gets. If for some reason you can't give clear title to a buyer, then you would be negotiating with the buyer for a resolution to the problem, not the Title Company.

How do buyers look for a house- the statement of 88% Online is fairly accurate and the reason I encourage FSBO sellers to have as much a presence Online as possible including a property website that advertises their property features. When you combine the other statement of 21% look for houses in newspapers, the total for the two is 109% and does not include any mention of signs or word of mouth. Only in providing effort can you give more than 100%, not in actual statistics proving this ad claim. The next fact states that real estate agents have a Internet strategy which will produce a buyer, but the fact stated that only 43% actually buy from the Online presence is not a justifiable reason to use their strategy. 9% buy from yard signs is probably right, yard signs do work well when they convey the right information, not by advertising the agent over the value and amenities of a house. 

Now for my favorite misstatement of all- Using an agent can net you 13% more. Allow me to repeat my previous blog statement- properties sell for market value and no real estate agent has a magic wand that could change that number. As expected, there is a disclaimer under that fact which states that FSBO sellers are usually in a market that is lower than those represented by a real estate agent, therefore this is the reason for the difference in selling price, and not because you hired an agent. There is every reason to believe that all sellers can sell as a FSBO in any market range. Believe it or not people are selling this way every day. Now if you want to trust the info graphic above, then hire a real estate agent, but if you believe in yourself and want to accept the Ultimate DIY Challenge then I'm here to help.

As promised in my last blog post, we will continue with forms and how to fill them out. If you still need forms, please visit USLegal Forms.  They provide forms needed by sellers to legally complete the sale. Here is a link to their website: http://www.uslegalforms.com/index.html?auslf=fsrl2018. In my last post we stopped at Title Companies and the role they play. There will be a section in the contract that will spell out whether a buyer wishes to have a property inspection and within what time limits (usually 10 days) the buyer will perform that function. A buyer can delay that time frame by stating in that section of the contract that it might be contingent upon receipt of an accepted contract of the buyers property. There will also be a place on the form to write in a time limit for placing written notice of disapproved items from the home inspection and a time limit for correcting these items. Every state will be different, however, you can  always get clarification of these time limits from an escrow officer or attorney.

A Lead Paint Disclosure statement will definitely be in every purchase contract. This is a federal disclosure requirement and is defined as "Target Housing". Homes built before 1978 are in that target housing law. There could be other required disclosures, such as Radon, Mold, Flood, etc.  Subdivision Covenants, Conditions, and Restrictions (CC&R's) are usually given to the buyer by the title company but should be discussed prior to signing a purchase agreement and should include any subdivision homeowner association articles and bylaws.  There may be a section outlining who will pay for what, often this is mandated by state real estate law. There may any number of state required sections that will usually be self explanatory in their purpose. Often there will be multiple paragraphs describing the meaning of terminology used in the document.

If there is an agent involved with the buyer, then he must provide an agency agreement showing that he represents the buyer. Now we are coming close to the end of form filling, stating the actual closing date and when possession will take place. Since every contract has a time is of the essence clause, it becomes important to comply with all time frames and time limits in order to preserve the contract from ending for just cause.

We are finally at the most important part of any contract, the actual signing of the agreement. When signing it is important to use legal names and not nicknames, all parties must sign, always date and put in the time of the signing. It may also be necessary for all parties to initial each page so as to confirm that each page was read by all parties to the contract. 

Most states now require a lengthy Seller's Property Disclosure Statement, disclosing everything the sellers know about the property and its condition. This is a very important form and should be carefully filled out to the best of the sellers ability and knowledge. I will caution you as a FSBO seller or any seller that this form has been the reason for the majority of lawsuits in real estate.
It is imperative to be honest in disclosing and if you have absolutely no knowledge of an item then and only then state that in the form. These undisclosed items have a way of showing up after the sale is complete, do not rely on an inspector to find everything that is wrong, assume he missed it and Disclose, Disclose, Disclose!!

You can use an Addendum form to change anything in the contract by being specific as to what is being changed to what is now agreed upon. You can create as many addendum as necessary, number them in sequence, such as 1,2,3- and make sure it is timely signed by all parties otherwise it is not an effective change in the contract. It can be used to make time frame changes, inspection agreements, repair agreements, moving of the closing date, and even the price if necessary. Never trust anything to memory but put everything in writing to clarify and legalize the agreement by addendum.

If you have specific questions please email me at fsboanswerman@gmail.com or ask me in the comment section below. As always my answers are free. Let's talk. My next post will be directed at "How to Negotiate Your Best Deal". it will include tips and tricks I have used in the past, some of which might surprise you!

Roger,
the fsboanswerman


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