HOMES FOR SALE BY OWNER
While some residential real estate transactions involve real estate agents retained by one or both parties, up to 15 percent of Minnesota real estate transactions are made without the assistance of a professional real estate agent. The primary reason this is done is so the seller can avoid paying commissions on the selling price of a home. Homebuyers are attracted to these For Sale By Owner (FSBO) properties because of the idea that they might pay less for the property.
When a seller offers a property for sale without the use of an agent, the transaction can be more confusing for all parties. Instead of having an experienced professional agent show the home to prospective buyers and act as an intermediary during negotiations, the parties in the transaction have to do their own showing and negotiating. It’s often that important legal requirements are forgotten, and misunderstandings can occur.
Still, these transactions are not at all that uncommon. Real estate experts recommend that both buyers and sellers consult with attorneys, who specialize in real estate, to make certain that all legal requirements are met. This helps protect both parties.
Trademark Title Services can perform the same services in these transactions. Title companies handle all the normal processes, and can also facilitate the transaction in the following ways:
Once basic negotiations on price and other issues have taken place, the parties meet at the title company office and prepare a formal purchase agreement. It’s important to remember that the title company cannot provide legal advice about the transaction. However, the title company can make certain that the purchase agreement is prepared correctly and answer non-legal questions. As an alternative, the purchase agreement can be prepared by the attorneys for both parties.
In a normal, agent-assisted transaction, most communication about the title process is made through the real estate agent handling the transaction. In a FSBO real estate transaction, the title company communicates directly with the principals. You need to have excellent communication with the title company.
The closing process will be much the same as with an agent-assisted transaction. The title company, however, must be prepared to explain more issues than in a normal transaction.