What to watch out for when listing your home for sale by owner
The Houston housing market has made strides this year. In August, summer wrapped up with overall gains in both sales volume and price for residential property. Yet for many homeowners, the equity in their home has remained less than they would prefer. These conditions make selling a home without a realtor an attractive option.
Homes listed for sale by owner (FSBO) are therefore gaining in popularity. The benefits and potential pitfalls of selling a home without a realtor are by now fairly well established. On the one hand, a buyer can save 4 to 6 percent of the selling price that would otherwise go to the realtor – and the median home value of a Houston home is $272,000, according to Zillow. That is significant savings.
Still, many sellers are reluctant to go it alone, and with good reason. Buying and selling real estate is often the largest purchase or sale a person will make. Doing it right is incredibly important. Finding potential buyers is easier than it has been in years, meaning that some of the marketing aspects of selling a home are more easily accomplished going solo. It is possible to get a home listed on MLS for free or with a discount with hybrid agency services. While it takes hard work to sell a home without an agent, it is certainly possible to do so and save big.
But perhaps the biggest reason sellers are reluctant to go it alone completely – and for good reason – are the state’s disclosure laws. Texas law has minimum disclosure requirements when selling a home set out in the Texas Property Code. These disclosure requirements apply to all sales with only limited exceptions, such as if the home is in foreclosure. The failure to disclose can lead to a sale falling through or worse. If a court determines there is fraud or failure to disclose defects in the home, the seller can face significant penalties. In addition, if a seller makes a representation to a buyer, the seller is required to know if that representation is true. So, for example, if a seller represents to a buyer the home is free of termite infestation, but is wrong about it, the seller is still responsible for making that assertion and therefore liable.
Homeowners considering selling a home FSBO should contact the experienced real estate attorneys at the Weaver Law Firm to ensure they are fully aware and compliant with Texas disclosure laws.