An increasing number of people are deciding to sell their house without the help of a real estate agent. These “for sale by owner,” or FSBO, transactions, offer sellers a number of advantages. For one thing, when you do a FSBO, you, as the seller, have total control over all aspects of the sale. You can decide how to price the house, how to market it, and whether and how to negotiate over price or other details. You can schedule viewings when it’s convenient for you. And while a real estate agent probably has many homes to market, and thus has divided attention, you can put all your energy and effort into the sale of one property: yours.
Perhaps the most important consideration for most sellers is the financial one. With FSBO, you don’t have to pay a commission to your real estate agent. The percentage of the sale that would have flowed into his or her pocket instead flows into yours. This is what motivates many sellers to forgo the help of a real estate agent. But in an effort to maximize your profit, don’t cut so many corners that you end up in legal jeopardy.
Do You Need a Lawyer to Sell Your Own House?
Michigan, unlike some states, does not require the use of an attorney at the closing on a sale of residential real estate. But just because you don’t have to have a lawyer at the closing doesn’t mean that you shouldn’t have one on your side.
Yes, a lawyer’s fees will cost you something up front. But if the lawyer’s advice can prevent you from making a mistake that will cost you money later, you can think of your attorney’s fee as an investment, rather than an expense.
There are many parts of a real estate transaction you can handle on your own: advertising the sale, staging the house, conducting open houses. But selling a house is more than just a business transaction, it is a legal one as well, and you should have the guidance of an attorney who is familiar with Michigan real estate matters. As the saying goes, “You don’t know what you don’t know.” If you are unaware of a legal obligation when selling your home FSBO, you could be setting yourself up for liability down the road.
The purchase or sale of a home is one of the biggest transactions most people ever participate in. If you think about it, going into a real estate transaction without the advice of a professional makes little sense, especially since many attorneys will be willing to consult with you on an as-needed basis, giving you the support you need without charging you for services you don’t.
How an Attorney Can Help in your FSBO Real Estate Transaction
First and foremost, an attorney can help you ensure that you are adequately complying with all legal obligations in the sale of your home, such as the Michigan seller’s disclosure. Particularly if you are offering the property for sale “as is,” you will want to be sure that you are not exposing yourself to liability in the event there is an unexpected defect with the house.
An attorney can also help you draw up the contract for the sale of the house. You and the buyer may agree on the broad strokes of the agreement, but the devil, as they say, is in the details. You can download a contract from the internet—but like a “one size fits all” garment, it may not provide coverage that suits your needs. You want a contract that is customized to your situation, with language that is clear and unambiguous, to avoid later costly litigation over confusing terms. And, of course, if there is anything in the contract that you don’t understand, don’t assume that whatever it is is of little importance. Get an attorney to explain it to you, and make sure that you are completely clear on your rights and your obligations under the contract.
Another way in which an attorney can be of help in a FSBO transaction is helping you make sure that you have a clear title to convey—in other words, that you really do have the right to sell the property that you are selling. And, of course, an attorney can assist you at closing, ensuring that all documents are completed correctly, with all the i’s dotted and the t’s crossed.
If you have questions about retaining an attorney for an FSBO transaction, or whether you should consider FSBO in the first place, we invite you to contact our law office to schedule a consultation.