Virginia For Sale by Owner
FOR SALE BY OWNER - GUIDE TO BUYING OR SELLING VIRGINIA REAL ESTATE This guide explains some of the important aspects of selling real estate with an emphasis on "For Sale by Owner" transactions. It contains general information for both buyers and sellers. If you would like additional information, please call any of our offices. Written and published by:
BUCK, ANDERSON & ASSOCIATES, PC
FOR SALE BY OWNER
You have chosen to buy or sell without the assistance of a real estate agent. That means you will handle many of the details yourself. Our firm can assist you by preparing the contract and processing your closing. That is what we do best. We can't tell sellers how to market their property. There are plenty of self-help books available to do that. Neither can we advise buyers and sellers of a fair price. You'll have to do your own market research.
We can assist you by providing the information and services you need to get your case to closing. Because you have chosen to go it on your own, there are some things requiring your personal attention. This Guide should prepare you by explaining the settlement process and what is expected of you. It also discusses our fees and services.
PREPARING THE PROPERTY FOR SALE
We recommend sellers remove any attached items that will not convey. Take Aunt Bessie's chandelier down and put it in storage. If you can't reasonably remove an item, be sure it is labeled clearly as "not conveying."
WHAT ABOUT AGENTS?
Would you be surprised to learn you can operate as a For Sale by Owner and still have real estate agents involved?
As a seller, you can hire an agent for the sole purpose of placing your property in the multiple listing service (MLS or MRIS) and/or to provide limited assistance, such as preparing a comparative market analysis to help you price your home. When you do, you will pay a fee to your agent for the limited service. In addition, you will be expected to offer compensation to the selling agent who brings you the buyer. That compensation will be set forth in the listing agreement you sign when your property is listed.
As a seller, even if you have decided not to have an agent represent you, agents representing a buyer may approach you. Here are some tips to help you understand how that might work:
o Real estate agents can provide services to both the buyer and seller. The buyer may hire an agent to represent him. This is buyer agency. Agents must disclose, in writing, which party they represent. You will be asked to sign this disclosure acknowledging that you have received it.
o The buyer's agent will ask you to sign an agreement acknowledging his participation and agreeing to pay a fee. The seller usually pays the agent but the fee is negotiated into the sale price. As a seller, you should be concerned about your net bottom line, not who writes the check. When you receive an offer from a real estate agent representing a buyer, you may want a professional of your own to review the offer with you. Call our office and we will be glad to assist. Our fee for reviewing the offer with you is about $250.
WHAT SHOULD SELLERS TELL BUYERS?
About the Property
Virginia is a caveat emptor (buyer beware) state. This means it is up to the buyer to inspect the property carefully to determine if it is suitable for his needs. The seller is under no duty or obligation to point out defects - even hidden defects.
Caveat emptor has two important exceptions.
The Seller May Not Mislead
The seller can not do or say anything to throw the buyer off. The seller can not lie if asked a question, and should not do anything to conceal a defect. As an example, the seller should not pile boxes against a wall to cover a crack or damp spot. However, even the exception has an exception. If the defect is obvious, such that a reasonably inquisitive buyer could have found it, the buyer will be expected to find it. In one court case, the seller lied about a plumbing leak but the buyer lost because he did not crawl under the house and inspect the plumbing himself.
Virginia Code Section 55-517 to 525 requires sellers deliver a statement warning the buyer that the seller is making no representations concerning the condition of the property, adjacent properties, historic districts, Chesapeake Bay Preservation Act, sexual offenders and dam breaking zones. Therefore, buyers should investigate and not rely on what a well-intentioned seller might disclose. We recommend a professional home inspection. Buyers may also want a home warranty. These warranties cost about $400 a year and cover most systems and appliances in the home. The typical deductible is $50 to $100 per occurrence. Our firm can order the warranty coverage.
About the Neighborhood, Zoning, Highway Plans or Schools Caveat emptor will apply to these issues also. If there is a mandatory Home Owners Association, the seller must supply a disclosure packet of information from the Association.
Legally speaking, the less said the better. Sellers can easily mislead buyers (often unintentionally) and both parties will hear what they want to hear. Buyers should expect to do their own research.
I FOUND A BUYER - NOW WHAT?
We have developed an easy two-step process that has worked for hundreds of For Sale by Owner clients.
Step 1 is for the buyer and seller to agree on a Letter of Intent. (Sample at the end of this article)
Step 2 is to meet with an attorney and prepare the Contract.
The Letter of Intent
A Letter of Intent is an agreement to negotiate in good faith toward an eventual contract. The purpose is to set forth the most important aspects of the transaction - the price, possession date and any seller contributions to the buyer's closing costs.
Once you have reached agreement on the Letter of Intent, call our closest office to arrange a time to meet and prepare the Contract.
Use the following Letter of Intent as a starting point for your For Sale By Owner transaction. then call our office to arrange an apointment to prepare the Sales Contract.,
LETTER OF INTENT TO BUY AND SELL REAL ESTATE
This letter of intent is between: Buyers) ____________________________________________________ and (Sellers) _________________________________________________ for the Property known as: ______________________________________ to include those fixtures, appliances and items determined in the final agreement. It is the intent of the parties to negotiate in good faith a contract for the purchase and sale of the Property. If they do not reach agreement on a contract by ____________, either party may declare negotiations ended and this letter of intent shall be of no further force and effect. The general terms of the agreement are as follows: Price: $_________________ Contingent on buyer obtaining a loan of: $__________________ and subject to seller's acceptance of buyer's credit and financial information. Seller's contribution toward buyer's closing costs: _____________ Deposit: $________________ Closing date: ______________ Seller will grant buyer or buyer's home inspector access to the property during negotiations and the final contract is contingent on the results of buyer's home inspection and such other inquiries as buyer may make. Other Terms: ____________________________________________________ _______________________________________________________________ _______________________________________________________________ The parties agree to meet with the law firm of Buck, Anderson & Associates, P.C. to prepare a Sales Contract and conduct closing on their mutual behalf. Either party may elect to have their own attorney represent their individual interests. Date: __________________ Buyer: Seller: _____________________________ ______________________________ _____________________________ ______________________________