Have you ever wondered if there is any risk for you, as a seller, when selling your home without a real estate agent?
I consistently talk with homeowners who are selling their home by owner, without an agent, and there is often a common theme: they feel like they are capable of selling their home on their own, especially since the market is so strong and so much in favor of sellers right now. They can save the money they would pay on commissions, and they can just pay an attorney to make sure the contract is written up. What exactly are they paying an agent to do anyway?
There are a lot of statistics I can bore you with, as it relates to selling your home without an agent - like the thousands of dollars you actually lose by selling without an agent, because you didn't have your home priced correctly - but I won't bore you with those statistics today. What I really want to share with you is the risk of major liability that you take in jumping into selling your home without an agent.
Before writing this article, I did extensive research online to see what information is available online to homeowners who are considering selling without an agent. So many articles talk about how much money you'll save on commissions when you sell your home yourself. And these same articles describe the steps you need to take next - market your home, hold an open house, do your own negotiations, things like that. All of those steps are accurate and valuable in selling a home. However, there is one VITAL piece of advice that I could seldom find in all of these articles: what risk are you taking by selling your home without an agent?
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Well, the truth is this: when you are preparing legal documents that relate to selling your home, you MUST be versed in the area of real estate contract law, and know what you are REQUIRED to disclose to any potential buyer, what you should avoid saying, and how all of these things can impact your sale down the road.
A common rebuttal to this is, "Well, this is why I'm paying an attorney to review my paperwork." That is an option that helps protect the actual purchase and sale contract, because the attorney is bound to uphold the contract law and make sure all of the Ts are crossed and the Is are dotted, so to speak. However, it is NOT an attorney's responsibility to advise you on how to behave throughout negotiations. It is NOT an attorney's responsibility to advise you and what should and should not be included in a seller's disclosure statement to a potential buyer.
So I've given you a lot of theoretical information, now let's apply this to a real life situation. Let's say that you've had an intermittent leak in the pipes under your kitchen sink. You've put band-aid fixes on it each time, and have been able to stop the leak. You don't disclose the issue on the seller's disclosure statement, because you think it's no big deal, and that the home inspector should find it if there's an actual problem. The buyer's home inspector completes the inspection, and they run water through the kitchen sink for several minutes, but a leak miraculously never happens while the home inspector is there. Throughout the remainder of the process, you continue to deal with the plumbing leaking, but keep putting a cup there, and quickly get through your packing and moving out of your home.
A couple of weeks later, the sale of your home closes, you move and the buyers begin moving into their beautiful new home. A few more weeks go by, and then you get a call from the buyer out of the blue. They are irate and screaming at you on the phone, saying you are costing them tens of thousands of dollars, and they'll see you in court. You're blindsided by all of this, and wonder what in the heck is going on. Turns out, your "minor" kitchen sink leak isn't minor anymore. While the new buyers were out of town for the weekend, something happened with the plumbing in the kitchen, and not only did a major leak happen, it flooded the house and will require drywall and flooring replacement, along with a whole host of other fixes that need to happen. Turns out, a reputable plumber can vouch that you knew about the plumbing leak, and the buyer has legal right to pursue suing you for damages, and for misrepresenting the property's condition when you sold the home. All of that money you made on the sale of your home is now going to be eaten up in court costs and reparations to the buyer.
Now, you probably read that and thought how over the top that story is. It is definitely a worst-case-scenario type of story. And sadly, things like this do happen. YOU don't want to be the one who deals with that. So how can an agent protect you from having these types of risks arise? It is an agent's responsibility to walk through the seller's disclosure statement WITH you - what I mean by that is, an agent should be sitting with you and asking you each question, answering any confusion you may have, helping you to understand what you do or don't need to disclose. That way, if you minimize any financial risk or liability you may have when selling your home.
Thank you for taking the time to read this article! If you have any real estate related questions or needs, please reach out to me at 509-844-5843.