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Selling by owner

Winning the bidding wars

Ask Phyllis is a blog series of frequently asked real estate questions.  Have a question about real estate?  Email us here

Dear Phyllis,

Our elderly mother lived in her home for more than 30 years and just passed. Her next door neighbor was very kind and did a lot of nice things for her such as taking trash cans out and in. This neighbor wants to buy her home for their son. Since we have the buyer, all we need is to establish the price. It doesn’t seem like we need a real estate agent and can sell by owner. What do you think is the best way for us to proceed?

Lilly

Dear Lilly,

You should contact a real estate agent and tell them that you want to establish a price for your home in order to sell to the neighbor. Ask them to view the home and offer their opinion of value and ask this Realtor® to recommend an appraiser. This Realtor® will have an opportunity to get your listing, if your neighbor does not purchase the home.

Order an appraisal, if the values seem to be in sync, you should be able to establish the selling price. If the values aren’t similar, ask the appraiser and real estate agent for clarification.

Prior to opening escrow, you should review the buyer’s prequalification letter and verify that they have sufficient funds for their down payment. Contact the buyer’s lender: Ask if they have verified the buyer’s income, and down payment. Ask if they have reviewed their credit report, and if the lender anticipates any problems with the buyer obtaining a loan.

As you are friendly with the neighbor and won’t have a Realtor® negotiating on your behalf you might decide to have the buyer hire an inspector prior to opening escrow so that they are satisfied with the condition of the home. At this point the buyer can move forward, or ask for repairs or a reduction of the purchase price.

There are numerous disclosures required by law. Ask the real estate agent who provided you with their opinion of value if they will handle the disclosures for you. As they did not market the home, find the buyer, negotiate the price or inspection, perhaps they will do so for a flat fee. If not, you should hire a real estate attorney to handle the disclosures. Or your mother’s trust attorney may be able to assist with the required disclosures.

Pinpointing the close of escrow date is difficult until the loan is approved. I am assuming that your mother’s home is vacant and that if you were to close a few days late it would not be a problem. You or the Realtor® helping you should contact the buyer’s lender on a weekly basis in order to determine that the buyer is still moving forward and getting the lender all of the paperwork they will need in order to approve the loan.

Best of luck on your sale.

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