Sell By Owner
Posted on December 16, 2019 by Nancy Liu | Category: Real Estate
Buy your property DIY, is it worth it?
As the Real Estate market blooms in Atlanta, a lot of people ride along the Real Estate blooming train and became property owners. Maybe because purchase process for real estate simplified, most people preferred to go through the process DIY style: not only they would “sell by owner”, they also favor in “For Sell by Owner” properties to purchase. It’s not inappropriate if the investor has great interest and enthusiasm in real estate investment. However, for investors without much experience in real estate, it saves neither money nor time to buy “Sell by Owner” properties without an agent.
Many people buy “sell by owner” properties and do not hire agents because of the cost of an agent. Actually Seller pays the Real Estate agent’s commissions (for Seller AND buyer’s agnet), so buying “Sell by Owner” properties without an agent does not save the buyer money. “Every trade holds its own secrets.” Real Estate Investment is not as simple as one would imagine. A good real estate agent goes through at least a dozen transactions a year, while a buyer may only experience a few in a lifetime. The latter is relatively less experienced and less skilled in the real estate business, so there is no guarantee that a buyer without agent will not be taken advantage of. Usually, problems do not occur in real estate investment, but when it does happen, the damage is more than the cost of an agent fee.
In countless commercial and residential property transactions that I have handled, I often people who are boldly refused to use the service offered by agents and boldly invested in real estate while one was not yet familiar with it, they, as a result, suffered unnecessary losses. I could offer nothing but sympathy.
It is said, “Learn from your mistakes”. Therefore, I want to remind those who like to buy “SELL BY OWNER” properties that if you really do not want to use the service of an agent, you should at least pay attention to the contract, so that it protects your interests to the greatest degree possible.
According to Georgia law, the purchase or sale of house or land is a real estate transaction. Therefore, only a written contract holds legal authorities. An oral agreement is not considered as Legal Binding Agreement in a real estate transaction. This is statute against fraud, because real estate transactions involve large monitory exchange, only a written contract can guarantee the legitimacy of the will of involved parties. The law requires written contracts in several transaction types, and real estate transaction is one of them. One of my clients was not able to purchase a “dream house” just because there was not any written contract. Client A wanted to buy a “SELL BY OWNER” property. After a long and tiring search, he finally found the property he wanted. The seller provided a simple contract, and both parties signed it. But later, Client A thought that the price was too high and wanted the seller to change the contract to reduce the price by $2000 dollars. They had an oral agreement, and it happened to be a weekend. Client A wanted to relax for two days, and therefore did not ask the seller to finalize a written contract. It so happened that there was another buyer who was willing to pay 5000 dollars more to purchase this same house. Without any hesitation, the seller signed a new contract with the new buyer. When Client A called the seller to change the contract on the following Monday, the seller said sorry, and that the house had gone to another buyer. Client A was very upset.
Under the same circumstances, if Client A had had an agent, he would have been able to avoid this trouble, because once the two parties reached an agreement or made any changes, the agent would have draft written contract immediately using the standard forms from the real estate association. Had one of the parties changed their mind, the contract could serve as their evidence. In that case, the violator had to be responsible for all consequences, that is, to either return the earnest money or to fulfill the contract and go through the transaction.
Besides providing help for a written contract, a good real estate agent may also provide professional opinions in the areas of community development, building structure, building material, roof quality, air conditioning, and heating. Therefore, purchasing a property through an agent is safer than doing it by oneself. To real estate investors, what should be considered seriously is how to find an excellent agent, rather than whether or not to use an agent.
This article is only for your reference. Please do not apply mechanically to any exact cases. You are welcome to consult our attorneys at Liu & Associates, P.C. For contact information, please click here.