I wasn’t planning on writing about this until things were a little more certain. I sometimes have this irrational fear of sharing good things too soon, and then having them fall through. I’m not sure if I think sharing them jinxes it, or if I just hate having to back-track when things don’t work out. But I also find it really hard waiting to write about things here until after they’ve happened; By then, it’s old news, and I’ve moved on to other things. Plus, I’m hoping that maybe one of you has been through this before, and can provide some guidance. Or at least an opinion of what you’d do in my situation!
Just before Christmas, I showed my house to a friend of a friend. He had been talking about buying a house, and my house was exactly what he was looking for: Small, on a large plot of land (for gardening, hosting get-togethers, and raising chickens), and close to the city. But, being a first-time home buyer, he was having cold feet. He texted me a few times with questions, but I wasn’t really holding my breath for things to work out.
Then a few weeks ago, he brought his girlfriend over to take another look. Good sign! Last week I got another text: He’s definitely interested in buying the house. He’s been approved for a loan, and was getting together more information on the down payment, insurance, etc. Since then I’ve gotten several texts asking for more information for the insurance company (type of siding, when roof was replaced, etc.). At this point, I’m feeling pretty confident that this guy is actually going to buy the house.
When you have a unique house, finding a buyer is most of the battle. There’s a very small market for a 1 bedroom house. Being on a large lot decreases the market even more. I’m not trying to get my hopes up too much. After all, we don’t have an agreement yet. But things are definitely moving in the right direction.
If things don’t work out with this buyer, I’ll need to move forward with putting the house on the market. So, I decided to go ahead and talk to a Real Estate Agent. I had talked to a different agent last year, but he wasn’t much help. A second opinion couldn’t hurt, right? Friday evening after work, I met the new agent at my house. I wanted to see if she could provide better comps for the house (which she did), and ask about listing my house if things fell through with this buyer.
The other thing I wanted to discuss was hiring someone to process everything if this person does go through with buying my house. My thought was that it would be worth paying someone a flat fee to make sure everything was done correctly, so nothing would come back to bite me in the butt later on. You don’t have to have a Realtor to sell a house. But I’ll admit that I don’t really know how to go about it without one.
Turns out, this is a service she could provide. But it’s a lot more expensive that I was expecting. Their typical sales agreement involves a 7% commission, which the seller pays. This amount is split between the buyer’s and seller’s agents; If one agent represents both parties, they get the full 7%, otherwise the agent earns 3.5% on the sale. If I already have a buyer lined up, and we can skip all the listing, and showing, and negotiating, and just have someone guide us through the process? $2,500. That’s more than the 3.5% commission she would expect to earn in a full sale! And she kept pointing out that it would still be considered a For Sale By Owner (FSBO). We’d basically just be using their forms.
I value what Realtors do, and the experience they bring to the table. But, it seems a bit much to pay 4-5% of the sale price to a Realtor when we don’t technically need one. Sure, I want to make sure this is done right. But I also don’t want to spend money unnecessarily. Then again, I’ve never done a FSBO, and I’m not sure where to begin. A Google search turned up numerous companies where you can purchase the legal documents for the process, but I didn’t come across a lot of information. I found a title company that lists on their website that they process FSBOs. It seems logical to me that we could complete everything between the title company and the mortgage company?
So now I’m at a crossroads of sorts. I’m not sure how quickly things are going to progress; I could have weeks to figure things out, or I could be moving ahead tomorrow. Do I contact a title company? Try to find another Realtor who would be willing to charge less? Is there something I’m not thinking about? What would you do in my situation? I’m leaning towards calling a title company, and asking what I need to do.
– Cindy W.