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As you may have noticed I have been talking about For Sale by Owner and giving out advice because it is becoming something that consumers are talking about more and more. As confidence goes up in the local real estate market, more people are thinking, "Maybe I will try a month or two to try to sell it on my own and see if I can save some commission".
There are things that I see that are creating problems for For Sale by Owners, and they are unnecessary problems that can be prevented. Today I want to share with you some information about writing a contract. Let's assume that you ran an ad and you got a buyer. That buyer was prequalified, you brought them into your home. They fell in love with your home, and the husband and wife agreed that they want to buy it. You started talking about price, and you came to an agreement. You actually had a meeting of the minds as to what price you would be willing to sell it for, and what they would be willing to buy it for.
Now you have to take the next step which is going to be "writing a contract". I have seen For Sale by Owners literally write contracts on notepaper, which should not be done. I recommend that if you find a buyer for your home, condo, townhome, or whatever; you Google "South Carolina real estate purchase agreements". There are many websites that have contracts that you can buy, and there are probably contracts where you can download them for free. Actually, if you call any of the agents at my office, we will send you a South Carolina approved legal purchase agreement which you can use.
You need to have a legal document. You need to have something that has the proper disclosures, because lack of disclosure is usually where owners of property get in trouble. Maybe they didn't disclose that the home was built prior to 1978. Maybe they didn't disclose that it had lead-based paint in it, and things like that. There are 20 to 30 different disclosures that you would find in a contract that you might not know of, so you need a legal contract!
The second thing that I want to help you understand when it comes to writing an offer as a For Sale by Owner is that you want to collect earnest money. In reality, a contract is barely worth the paper that it is written on. If everything is in agreement with the buyer, you need to ask them if they could give you an earnest money deposit. I recommend that it should be a couple of thousand dollars or more, depending on the price of your property. Once you have 100% meeting of the minds and they sign the contract and hand you that check, you can put that in an account (or cash it). You can also take it to an attorney's office and have them put it in an escrow account immediately. The key is if that buyer gets remorse later on and decides to back out, then they may have to forfeit those few thousand dollars.
When you ask them for an earnest money check - if they say they do not want to give you one - if I was your agent I would recommend that you do not agree to sell to them. If they do agree, then you know that you have something solid, there is a real deposit there, and if they back out it could cost them. You will see when there is a deposit, people do not back out quite as much.
The last thing is a strategy that I would like you to think about. You write a contract, you get an earnest money deposit check in your hand, and then you get them to sign the contract. This is just a recommendation, but when they sign the contract, show it to your attorney before YOU sign the contract. You are not an attorney, and neither am I. You want a legal and binding contract. Get them to sign it and be committed, but before you ratify it, get an opinion from an attorney. You may be able to get an opinion from a Realtor if they are kind enough to help you. Go to an attorney and ask them if they see anything wrong with the contract.
You want to make sure that you have someone looking over your shoulder making sure that you are doing it right; that you are disclosing what you are supposed to disclose, so you do not get into any legal battles or have any legal liability that can come back and haunt you. You do not want to get sued over something like this. You want to download a good contract, you want to get an earnest money deposit, and you want an attorney to review the contract prior to you signing it.
I hope that information helps. I'm Greg Harrelson with Century 21. If there is anything I can do or any of our agents can do we would love to help you. This is the last of my 3 part video series on FOR SALE BY OWNER.
Thank you for watching.