The Financial and Legal Considerations Of For Sale by Owner
The Financial and Legal Considerations Of Selling Your Home For Sale by Owner
Selling your home yourself often involves a steep learning curve. Here’s a quick overview of some important legal issues you’ll need to keep in mind when listing your home as For Sale by Owner.
Real Estate Condition Reports
You need to disclose every defect in your home (like water leaks, structural issues, or mold) on a legal document called a Real Estate Condition Report. If you happen to miss a defect, or purposefully don’t disclose it, your buyer could take legal action against you when they find them. You could be held liable for the costs of repair and replacement – which could cost you a fortune.
Buyer Contingencies
Buyers are legally allowed to cancel or retract their offer on your home if the contingencies aren’t met. Some of these contingencies include:
Inspections
As we mentioned above, your home needs to be closely inspected to determine whether there are any flaws or defects that could potentially affect the cost of your home.
Appraisals
Having your home professionally appraised will help you determine the correct selling price. You need to ensure your home’s value is the same or even higher than the price you’re asking for it.
Funding
Before being able to purchase your home, potential buyers need to get approved for a home loan at a rate and term that suits their circumstances and needs.
Earnest Money Deposits
If an inspector finds defects in your home after your buyer has made an offer, the buyer can implore you to pay for these defects.
Even if you repair these defects, they might not be up to the standard of the buyer or inspector, which means they’re legally allowed to terminate their offer. Many home owners might refuse to repay the earnest money deposit, and become involved in a long and drawn-out legal dispute.
Let us help you navigate the legal considerations that come with selling your home yourself. Contact Team Infinity Real Estate Group today!