I recently received a phone call from a former co-worker who lives in another city. He mentioned that he made an offer to purchase some land and the mobile homes that are on the property. We spoke for more than an hour and after which, he was not so sure that he made the right decision to attempt to purchase this real property.
One of the perils of purchasing real property without an agent is a lack of knowledge, from either the seller or buyer, or both. This situation, the seller did not occupy the property and wanted to sell, but did not know exactly what he had or the value that should be placed upon the property.
The buyer, my former co-worker, thought he had a great deal, but had no ideal how get the property to closing. After speaking with him for quite some time, he began to realize that it is not as easy as one would think to close on real property. His first concern was the mortgage that he would undoubtedly have to have in order to fulfill his obligation to purchase this home. Had he done it "true" due diligence, he would have realized that he should have spoken with a lender first, to make sure that he could obtain the financing required to purchase such an unusual property. He thought that financing would be easy since the agreed upon sales price was not very much. However, purchasing a manufactured home on a permanent foundation is not that easy to obtain financing, as most real estate agents would know.
Secondly, he did not realize that he would most likely have to hire an attorney in order to purchase this home. In North Carolina, the attorney actually prepares the new deed, so without an attorney, who would prepare the new deed? Furthermore, he did not realize that he may need to have a appraisal performed on the property if he was planning on obtaining financing. Most mortgage companies require an appraisal, especially for unusual properties such as this one.
Finally, after our conversation, he was not sure if the deal he had made would be the most beneficial for him in that the closing cost were on the table. The seller had offer to pay closing cost for a certain sales price. Otherwise, he wanted the purchaser to pay for the closing cost. However, my former co-worker failed to get clarification as to what and whose closing cost would be included. If the seller was willing to pay for all the closing cost, both buyers and sellers, then it would have been a great deal to pay an extra $500 to have the seller pay for them. However, if the seller was talking about only the typical seller's closing cost, then it would not have been a great deal since the largest cost for the seller, real estate commission, would not be paid due to no agents being involved.
Needless to say, my former co-worker decided that he had much more work to do before he could decide if he wanted to continue with the process to purchase this property or walk away and loose the down payment that he had placed on the property.
This is just one of the stories that I have about people trying to sell real property without an agent. The questions I like to put to any potential For Sale By Owner is, "How many homes have you sold in North Carolina?"
The fact remains that about 86% of all homes sold in the U.S. have had the aid of a real estate agent. If you want to sell your own home, then you have to become an expert in the field of marketing, negotiating, and real estate law. I am not a lawyer and cannot advise on the law, but at least a real estate agent knows the legal requirements to sell a home.
