If you are considering selling your home you have many choices available to you. There are a multitude of options as there are real estate agents to present them. One alternative that some people find enticing is the “For Sale By Owner” or FSBO option. This avenue is chosen not because people want to play “real estate agent”, but because the thought of saving a 6% sales commission is worth the risk, compared to the perceived benefit they would receive working with an agent.

When I hear “We might just sell it ourselves”, I have a list of questions I ask the seller. If you can successfully answer these questions, then maybe you can sell you own home. If not, you should partner with a professional.

(1) Who Pays? Buyer or Seller - many people think that to sell their home just agree on a selling price and close of escrow date. They assume escrow will oversee the transaction. Some of the other costs to consider include, county transfer tax, title fees, home warranty, city inspection, HOA transfer fees, appraisal, property taxes. It’s best to have an agreement before you sign the contract regarding who pays for what. If its after you can bet they become your expense. The job of the escrow company is to carry out the terms of the purchase contract, not assign responsibility. This of course assumes that you use an escrow company if you decide to FSBO.

(2) Disclosures - regardless of how your property is sold, you still have an obligation to disclose material facts, and certain disclosures are mandated by state law. The escrow company has no interest in confirming that the disclosures have been dutifully executed. Can you name the appropriate disclosures and their function?

(3) Earnest Money Deposit - accepting an offer usually includes negotiating many points and one is the initial deposit. How much is enough? If the contract cancels do you keep it and if so, what is the procedure?

(4) Mediation/Arbitration & Liquidated Damages - legal contracts are written to provide for every scenario. In the event the transaction starts to fall apart, what recourse do you have or was anything agreed to?

(5) Inspections / Repairs - A Buyer may elect to have several inspections on your property, and consequently ask you to make repairs. Who pays for the inspections? Are the repairs mandatory? What other alternatives are available. Is there a time period that applies?

(6) Contingency Period - a well written contract will allow a certain amount of time for inspections, loan application, appraisal, title approval, and disclosure review. If your property is a condo or townhome, there are also HOA documents that need to be provided. After this time expires, a buyer needs to either proceed or opt out of the contract. If you’re selling “By Owner”, do you have a timeline in place for the above to be completed or does this go on into perpetuity?

(7) Negotiation - most people do not like to negotiate on their behalf, and will do anything to avoid a confrontation. Most negotiations have a monetary value attached and unless you have some experience, it might just be costly for you. Chances are someone else can negotiate more effectively on your behalf.

(8) Contract Law - real estate agents are not supposed to give legal advice. I cannot speak for everyone, but we have been involved in numerous transactions and we can explain the documents used in a transaction. A benefit we have being members of CAR is that we can call and speak with a real estate attorney. What will you do when you find yourself in a bind and don’t know what to do?

(9) Communication and follow up during the transaction - it is not uncommon for a transaction to fall out of escrow for whatever reason. An experienced agent knows the red flags to look for. If your transaction begins to sour, how do you cancel it and place your property back on the market? How do you get rid of a non-performing buyer?

(10) A Professional Realtor will sell your house for more than you will - this is the bottom line. Studies conducted by the NAR, show homes listed with a Realtor sell for more money than homes for sale by owner. Savvy investors will prey on unsuspecting home sellers because they assume the seller is inexperienced and looking for quick cash. Their offer can be much less than a property is worth.

Selling a home in California can be more complex than in other states due to the paperwork and disclosures that are involved. Many of the forms we use in a real estate transaction came about as a result of litigation, and therefore are designed for the protection of the parties involved. Selling a property can be a very emotional experience and can also be costly if done incorrectly. Realizing that this may be the largest financial decision of your life, don’t you think it’s wise to place it in the hands of a trusted advisor….a real estate professional!