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For sale by owner

Q. We are going to sell our house without using a broker. We are not in any hurry, but our family is growing and we could use a bigger house. My husband likes the idea of the challenge. He said I should write you for advice, so I am.

A. I hope the two of you have time to invest in the project. You can do without the broker, but you can't do without the services the broker would provide.

Your first job is to figure out a proper asking price. Too high and no one comes to view the property. Too low and your place sells right away, but you're shortchanging yourselves. Internet sites, even the most skilled ones, aren't all that dependable. Research everything for sale in your area, to see how your competition is priced. You can even ask brokers for advice: Tell them, frankly, that you intend to try selling yourselves. Some may be ready to give you their opinions, figuring you might end up listing after all.

It will help if you're familiar with social media and the Internet. In old-fashioned advertising, "for sale by owner" is always an attention-grabber. As is, at the start, "first offering today." Short ads attract attention and give buyers a reason to phone or email for more information.

On a lawn sign, include your phone number and "by appointment only." For a bit of safety, request any prospect's phone number "So I can call back and confirm." Advance notice gives you time to tidy, turn on the lights, shut the dog in the garage, send the kids next door, etc. You may also want to arrange for another adult to be in the house with you.

Calculate roughly how much cash and income a buyer might need, to qualify for a mortgage loan on your property. Don't hesitate to inquire about finances before you invite prospects to your home. You won't violate anti-discrimination laws if you apply the same standards and ask the same questions of everyone who calls. You have the right to ask about employment and income. Of course they have the right to refuse to answer. Then you'll have to play it by ear.

Watch out for bargain hunters on the prowl for unsophisticated FSBOs. They will be less interested in the house itself than in finding out if you'll sell with no down payment, and hold the mortgage yourself.

Remember that when it comes to the sale of real estate, oral agreements are not binding. You could agree to a sale price in the presence of witnesses, and even accept a cash deposit, but the buyers would still have the right to drop out of the deal and get their money back. If you're asked, "Would you take $200,000?" the response is "We'll be happy to consider any written offer." And you can add that you'd like the offer to be accompanied by a credit report. Otherwise you could end up with the house tied up, off the market for months, while your buyers try vainly to obtain the necessary financing.

When you receive an offer, as you have no broker to help you evaluate it, this would be a good time to consult your attorney. You will have three options: accept it as it stands, reject it (but you wouldn't be able to change your minds and get it back later), or make a counter-offer, saying you'd accept everything except that price is to be such-and-such, or you have the right to take the dining-room chandelier, or you can't move till summer. Then the buyers can accept or reject your counter. Too much back-and-forth, though, tend to kill the deal. It will help if you realize, right at the start, that every sale - like every purchase - is a compromise.

Q. Is there a way that my 86-year-old mother can take money out of her mutual funds to pay off my $60,000 mortgage with minimal cost? I am 63 years old and on a very limited budget. If I could get this portion of my inheritance early it would be relief for me.

A. I don't know the details of your mother's mutual funds - whether they're at her disposal or tied up in some fashion, and if she'd have taxable profit. Nor do I know if she wants to pay off your mortgage, or if she can afford to.

But if it's gift taxes you're concerned about, your mother might have to file a gift tax return but she probably wouldn't actually owe any tax. A local lawyer or a CPA can explain, and arrange the paperwork if you and your mother decide to go ahead.

• Edith Lank will respond to questions sent to her at 240 Hemingway Drive, Rochester, N.Y. 14620 (include a stamped return envelope), or readers may email her through askedith.com.

© 2015, Creators Syndicate Inc.

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