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I'm preparing my property to come onto the market in 4 months. It's not ready yet as I want to get a few things in place first.
I'd like to let buyers in the market now, know that my property will be available soon, so that if they like my property they can choose to wait (and not buy something else without knowing mine was coming onto the market).
It will also allow me to line up potential offers on my home, so that when I do list in 4 months it will sell fast and at the highest price.
Is it legal to do this? Im actually interested in which states this would be legal.
I know Zillow allows a 'Make Me Move' price, but I will actually advertise a future date like this:
Property Address: XXXXXXXXX
Price: $400K
Available: In 4 months (not for sale yet)
So I will be saying a future date that it will be coming onto the market.
I would love to hear whether you think this is a good idea. And any legal issues.
As an owner, you can advertise whenever you wish. However, a real estate agent will generally not be able to advertise your property unless they have a signed listing agreement. Don't sign a listing agreement until you are ready to sell--if at all.
Quote:
Originally Posted by leighpowers
2. If I sell to a buyer who has an agent, will it cost any realtor fees?
You will not owe any fees unless you have a written agreement to pay them. Usually, a buyer agent's fees are negotiated when an offer is made.
1. Do I need any contract in place before advertising it?
Contract with who? There is no contract yet. The buyer will present you with a contract. Bring it to a lawyer to review before accepting.
Quote:
Originally Posted by leighpowers
2. If I sell to a buyer who has an agent, will it cost any realtor fees?
Depends on what the contract says. Since you cant really mortgage realtor fees, it would be in your best interest to accept a higher price for the house and simply pay the buyers agent. Works out the same.
Quote:
Originally Posted by leighpowers
3. What is the downside of doing this? Why are sellers not doing this already?
People hire realtors to find buyers. If you live in a HOT area, and can handle the transaction yourself, with the help of a lawyer, you dont need a realtor. Most people do not live in HOT areas and are not capable of handling transactions like this, thus they hire a realtor.
When you dont know how to do something, you hire a professional, just like anything else in life.
Its legal to advertise it for sale. However once you sign a contract with a buyer then you must agree to the terms of the contract. So don't enter into a contract until youre ready to move, unless you specify a delayed closing date in your contract, which likely the other party wont agree to. BTW its not "legal vs illegal" its contract law. You can be sued for breaking a contract but that doesn't mean its "illegal." Illegal is generally a term used for criminal law.
jackmichigan is right -- at least, he would be around here. As the owner of the property, you can manage the advertising and sale of your own home any way you please. Agents, on the other hand, have some constraints -- many MLS's require that the agent register a listing with their MLS within a short period of time of taking a listing.
Four months is a pretty long lead-time, and who knows what the market will be like, then. You may find yourself in the position of having someone want to buy it RIGHT NOW -- are you prepared for that? Would you sell for a slightly lesser price if you didn't have to make all those improvements/repairs?
As far as paying an agent's fees -- that's completely up to you. You can make it clear that you will not be paying agent fees now -- don't sign anything with any agent, if that's the case, not even a "permission to show property". Make sure, nicely but firmly, that any agent understands that. Many FSBO's offer agents 1-3% for bringing a buyer, but it's not required -- at that point, the agent could go after their buyer for a finders fee, but that's not your problem. When you get around to actually putting your house on the market, you may want to reconsider, as it may open up the pool of people who are exposed to your home on the market. Having an agent refuse to bring a client does not prevent the client from somehow finding you and contacting you separately, though. The client and the agent will have to work that out amongst themselves -- if you don't have any agreement with the agent, then the agent has to look out for themselves.
Basically, though -- if you aren't ready to move, and your home isn't ready to be seen to its best advantage, it may not be worth the trouble of opening yourself up to a barrage of agents (and there will be LOTS of them) clamoring to represent you at this point. Around here, you'd probably get 8-10 calls a day from agents wanting you to list with them instead of going FSBO. Plus, four months is a LONG time in real estate -- people who might want to move at the first of the year have plenty of time to look at what's out there, and while you might have someone very interested, some other shiny new house may catch their attention in the meantime. There's also time for a possible buyer to go through the whole cycle of "buyers remorse" before they even BUY your house -- and then walk away. Also, if someone is looking for tax considerations for 2014, they may not want to wait until January to buy a home.
A final consideration: If you have a buyer now, unless it's an all-cash deal, they won't be able to lock in their interest rate/financing for four months, which means that they will probably postpone making their mortgage application. So, then your home is off the market while they wait to make a mortgage application -- and you don't even know if the house will appraise, or if the qualify for a mortgage. Just a thought.
Wow, amazing amount of knowledge and willingness to share here. Thanks everyone.
dblackga - how do I stop agents from contacting me? Do FSBO's get harrassed?
So, to confirm:
1. The property is not for sale, but will be advertised that it is coming available soon. I do not need any contract or legal document to do so, I do not need to pay an attorney, and I do not need a seller or buyers agent. Basically I can advertise it today without doing anything else.
2. Is this the same for every state in the US?
3. If I get contacted by a buyer directly I can negotiate and sell to them. At what point do I need to get an attorney involved? Do I need to then advertise it for sale?
4. If I get contacted by a buyers agent I can offer a 1-3% commission if I want. Do I have to offer a commission?
5. An agent cannot advertise a property that is coming available. Until they have a signed listing agreement.
dblackga - how do I stop agents from contacting me? Do FSBO's get harrassed?
Difficult. You COULD put "No agent calls, please" on any advertisement, but there are some persistent ones that will ignore it. Judicious use of voice mail suggested.
Quote:
Originally Posted by leighpowers
1. The property is not for sale, but will be advertised that it is coming available soon. I do not need any contract or legal document to do so, I do not need to pay an attorney, and I do not need a seller or buyers agent. Basically I can advertise it today without doing anything else.
"Coming soon" works for up to a month -- honestly, "coming soon" in four months is too long. But hey, your house -- your plan. Advertise it any way you wish. (This is assuming that you ARE the owner of the property, and it's not deeded to someone else, etc.)
Quote:
Originally Posted by leighpowers
2. Is this the same for every state in the US?
Your house, your plan. Can't speak for every state, but I am not aware of any state that restricts a homeowner from selling their own home themselves.
Quote:
Originally Posted by leighpowers
3. If I get contacted by a buyer directly I can negotiate and sell to them. At what point do I need to get an attorney involved? Do I need to then advertise it for sale?
A couple of things: You will probably want to contact an attorney before the house goes up for sale. Have the attorney prepare a contract that is customary in your state, for use when you decide to sell the house. Have attorney review the contract before all parties sign it.
Quote:
Originally Posted by leighpowers
4. If I get contacted by a buyers agent I can offer a 1-3% commission if I want. Do I have to offer a commission?
No, you don't have to offer a commission. But what happens if you are asking $200,000, and someone with an agent offers you $204,000, with $4,000 to the agent -- a 2% commission. Would you do it? Why or why not?
Quote:
Originally Posted by leighpowers
5. An agent cannot advertise a property that is coming available. Until they have a signed listing agreement.
If you don't plan to use an agent, it's irrelevant. In most (if not all) states, an agent cannot list a property without a listing agreement.
I will observe that, if someone is this unsure about how to sell a house, they might be well-advised to use an agent to manage the process. Depending on your state, it may be relatively straightforward, or impossibly byzantine.
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