FSBO-For Sale By Owner-Can you do it?

For Sale By Owner (FSBO)

MiJoy Mortgage can help you qualify prospective purchasers and can help you with the process of selling your own home.

Advantages of selling as a FSBO:

Escrow and Title companies can handle most of the closing aspects of the transaction.
The Internet has over 600,000 sites that contain FSBO-related information.
Termite and Home inspections will show the condition of the property and let you know what needs to be repaired.
There are a number of "For Sale By Owner" listing services where you can advertise.
Many real estate agents and mortgage loan officers market their services to FSBO's.
You still have the option list your home in the MLS.
The Internet now provides an enormous amount of real estate market information to consumers—information which wasn't previously available.

Disadvantages of selling as a FSBO.

Selling your own home can be a complicated and frustrating experience.
There are many disclosure and seller issues/concerns that must be addressed.
Are you comfortable marketing and showing your home; perhaps to individuals that may or may not be qualified to buy your home? Is this safe?

Is selling on my own always best?

No. Many sellers benefit from the services of a professional real estate Broker. A qualified professional can greatly enhance your ability to market your home and lead you through the process to minimize issues. Often your net proceeds are better in the long run by listing with a Broker.

If you need a Real Estate Agent/Broker, MiJoy Mortgage can recommend one to you.

OK, I still feel like I can do this on my own!

If you are comfortable selling on your own, MiJoy Mortgage can help qualify your prospects and assist you:

Professional Property Inspections

Unless your home is relatively new, consider getting a professional home inspection. Many buyers will order inspections if they suspect potential problems. A buyer will use any excuse to justify offering you less than you'd like. A professional inspection can help support your property value.

A professional inspector can accurately assess the condition of your property, and know when to call upon the expertise of others if required. An inspector should evaluate the condition of the exterior: roof, vent pipes, gutters, chimney, siding, masonry, foundation, exterior grounds, (structures, stairs, walkways, driveways, outbuildings, drainage, etc.) Interior inspections should be performed systematically from top to bottom: from the attic to the basement or crawl space. Functionality of doors, windows and storm sashes should be checked. Bio-hazards (lead-based paint, asbestos, etc.) should be noted. The home's infrastructure should be inspected and/or tested: electrical, plumbing, ventilation systems, heating and cooling, water pressure, etc. In the event a structural engineer's opinion may be required, a professional home inspector should recognize and alert you to that need. An engineer's advice might be sought when there are questions about physical conditions, which may potentially threaten the structure and the safety of occupants.

How to find a qualified Inspector:

Ask your escrow agent, title officer, real estate or mortgage agent for referrals. Ask the inspector for their professional credentials, experience, and names of a few satisfied customers. Are there complaints registered with the Better Business Bureau? Are they a member of a professional organization such as:

National Academy of Building Inspection Engineers
National Association of Certified Home Inspectors
American Society of Home Inspectors
National Association of Home Inspectors

Frequently Asked Questions

What is the difference between "pre-qualified" and "pre-approved"?

When one is pre-qualified, a mortgage professional has rendered an opinion regarding the home price the potential buyer can afford. Their opinion considered the potential buyer's down payment, debts, income, credit rating, and a lender's underwriting guidelines. Being pre-qualified is only an opinion from a person who will not actually lend the money to purchase your home. If one is pre-approved, however, a lender has verified all the above and more. The lender's opinion is more valuable since it is the lender who will lend the money. When a potential buyer is pre-approved, the seller can be more confident the buyer can close the deal. A seller should always ask potential buyers to provide a pre-approval letter.

What closing costs might a buyer pay?

Closing costs are various charges paid to different entities associated with facilitating real estate transactions. Some of the closing costs a buyer might encounter include: application fee, appraisal fee, credit report, transfer tax, discount points, notary fee, documentation fee, title and escrow fees, loan fees, mortgage insurance, origination fee, title insurance premium and others. Closing costs are negotiable between the parties.

What is a point?

One point is equal to 1 percent of the loan amount. Depending on the context, it can have different interpretations. A discount point provides the borrower with a reduced, "discounted" note rate. An origination point is a fee for services rendered in connection for originating the loan.

What is earnest money?

When a buyer makes an offer to purchase your property, they will need to provide an earnest money deposit as a sign of good faith. The earnest money deposit becomes a part of the purchase price and is held, or deposited into a trust or escrow account until there is full acceptance of the offer and the transaction closes. Typically, the earnest money deposit is 3 to 5 percent of the offer amount. In a FSBO transaction, the buyer should make their earnest money check payable to the escrow company.

What is title insurance?

Title insurance protects the buyer and seller. It's an insurance policy issued by a title insurance company and specifies, among other things, what liens are recorded against the subject property. Public records can be incomplete and contain errors regarding the history of ownership of a property (chain of title). It's critical that an owner receive undisputed, marketable title to the property. Title insurance was developed to attest to the reliability of the chain of title, and compensate people in the event problems arise and someone contests the sale transaction. There are different levels of protection offered by different types of title insurance.

Is VA or FHA financing unfair to sellers?

Not anymore! FHA and VA loans provide purchasers the opportunity to buy homes with minimal cash investment and at lower interest rates. These loans require the lender or seller to pay for minimal closing costs (usually less than $100) that a buyer would normally pay with a conventional loan. Offering your home and allowing VA/FHA financing increases the number of buyers that may make an offer on your home. You always have the right to compare these offers to other offers with conventional financing.

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