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For Sale By Owner - What You Need to Know

If you are considering selling your home yourself, here are some things you need to think about doing as part of the process.

 Determine Your Home's Value - Consider hiring an appraiser to give you a detailed appraisal of your home's value.  This will help you in setting an asking price for your home.  If you skip this step, you may end up pricing your home to low and selling it for less than it is worth or pricing it too high and not selling it at all.   Additionally, if your buyer is using a home loan to purchase the property, their lender will obtain their own professional appraisal.  The bank will not want to extend a loan for more than their appraised price.

 Contract - You will need a contract between you and your buyer.  We recommend that you hire an attorney to assist you with preparation of a contract.  Note:  if you contract with a member of the Arizona Association of Realtors (AAR) to sell your home, he will have access to the AAR contract documents which are used throughout the state.  These documents are reviewed and updated regularly by AAR based upon feedback from agents, brokers, and attorneys in the real estate field.

 Marketing - Very few homes are advertised in newspapers anymore.  Most marketing is done through the internet.  Although, as a for sale by owner you will not be able to list your home on the MLS you can create your own website for your home and/or advertise on websites like Craig's list.  We recommend that you check with your HOA, if you have one, before placing a "For Sale" sign in your yard.  Some HOA's have rules governing the size and placement of such signs.   Make sure that all of your advertising meets Fair Housing Guidelines. 

 Fair Housing - There are a number of laws that prevent discrimination in home sales and purchases.  If you would like us to mail you a copy of the brochure - What Everyone Should Know About Equal Opportunity in Housing Brochure  , please send an email to us requesting it and provide your mailing address.  Just click on the "Contact Us" link in the upper right corner of this website to email us your request.

 Title Company - Once you have a contract with a buyer for your home, you will want to work with a title company to handle the escrow process and actual transfer of title.  We suggest that you contact a title company at the start of your process and find out what documents they will require and how much they will charge for handling your transaction.  You also need to find out how much time will be required by the title company to process the escrow paperwork.  Take this into consideration when planning a close of escrow date for the contract.

 Earnest Money - You need to decide if you are going to ask the buyer to desposit some money to show their good faith intention to purchase the property.  This money would be credited to the buyer at closing.  We strongly recommend that you deposit any earnest money with the title company to hold in trust.  You also need to detail in the contract under what conditions the earnest money goes back to the buyer and under what conditions it would be forfieted to you, the seller.

 Buyer Qualifications - If your buyer will be obtaining a loan, we recommend that you ask for a letter from his lender indicating that he is qualified to purchase the home at the price given.  You should also ask the type of loan.  For VA loans, there are some fees that the seller is expected to pay.

Also for VA and FHA loans the house will have to pass the VA or FHA appraisal process.  Sometimes the appraiser requires repairs to the home before the loan can be approved.

 Inspections - The AAR contract allows an inspection period for the buyer to have any professional home inspections done that they desire.  The buyer can cancel and receive his earnest money back or negotiate for repairs based upon the findings of the inspections.  If you are going to allow for professional inspections, you need to provide for this in the contract.

 Taxes:  We recommend that you consult with an accountant regarding the tax consequences from selling your home.

Financial Difficulties - If you are considering bankruptcy or are in the process of bankruptcy, you need to consult with your attorney before proceeding with any effort to sell your home.  If you are delinquent on your mortgage payments and/or you owe more on your property than it is worth, you need to consult with a professional real estate agent, a lawyer, and an accountant before proceeding to market your home.

 Note:  This is not intended to serve as legal advice or to be a complete list of everything you need to do to sell your home.  As mentioned above, if you are not going to hire a real estate agent, we recommend that you consult with an attorney and an escrow officer at a title company.

For Sale By Owner - What You Need to Know