SELLING WITH SALEBYOWNERLAW.COM
Brought to you by the Law Firm of O’Keefe, Rivera & Berk,
Are you selling your Chicago area home by owner (without using a real estate agent)? We want to help. In 2013, according to the National Association of Realtors, 9% of all real estate sales in the United States were by owner.
Selling by owner can result in enormous savings, as you will not be paying a commission for the listing agent, which saves an average of 2-2.5% of the Sales Price. For example, you could save up to $5,000 on a $200,000 sale.
Selling by owner means you will replace the duties of a real estate agent. In order to be successful, preparation is essential, and you’ll need help. We want to be your resource and your guide for the sale by owner process.
SELLING BY OWNER IS:
Preparing the home for sale, choosing a list price, and marketing the home. You can do it yourself, using resources that are available to everyone, many for free.
Once you have listed the home, you will entertain offers evaluate offers, and accept an offer. We will guide you for these steps.
After you accept an offer, we take over the process and close your deal.
OUR SEVEN STEPS TO SELLING A HOME BY OWNER
PREPARE THE PROPERTY FOR LISTING
Utilize the many online resources that will tell you how to prepare your property for sale. Clean the property. De-clutter as much as possible. Repaint walls in neutral colors. Put away your personal items, such as family photos, toys, and shoes. Add some indoor house plants and flowers. If necessary, do some basic outdoor landscaping. If the property is vacant, consider hiring a staging company to make it easier for buyers to visualize the living space with furniture. Have a professional real estate photographer take at least 15 photos for your listing and do a virtual tour (cost $150-$200). Some photographers can do virtual staging and videos. Never use smartphone photos! Spending a hundred dollars on photos can make all the difference in the world to prospective buyers.
CHOOSE A LIST PRICE AND DETERMINE YOUR EQUITY
Setting the correct list price is, by far, the most important decision you will make in the process of selling your property. If the price is too high, your listing will sit on the market too long, and a stigma may attach. Too low and you’ll lose money.
Do your research. Use online resources such as Zillow.com and eappraisal.com for an estimate of value and recent comparable sales. Talk your neighbors. Consult with a real estate agent. Obtain an appraisal. Some of the Flat fee MLS listing services will provide advice on an appropriate list price.
How quickly do you need to sell your property? If you can afford to wait, you can price it higher and see how the market responds in the first few weeks. If you need to sell it right away, you’re going to need to choose a lower price.
Once you have a list price, the next question is – can you make money from this sale and how much? To answer this question, you need to calculate your equity. A general rule of thumb is to take the list price and subtract 6% for closing costs. Then subtract the balance of any mortgages, liens, unpaid taxes, and the like. This will give you a rough idea of your equity. For a more accurate value, contact us. We’ll be happy to figure it out for you.
LIST THE PROPERTY
Because it is so important for your listing to be viewed by as many people as possible (including as many agents as possible), we recommend using a flat fee listing service such as forsalebyowner.com or FSBO.com. These services will allow your listing to be placed on the MLS (Multiple Listing Service). The MLS is the database real estate agents use to provide information to one another about properties on the market. It is really important that your listing be seen on the MLS.
We suggest using the flat fee MLS package on FSBO.com ($399) or Forsalebyowner.com ($599 plus .25% of sales price). Along with putting your listing on the MLS and many other websites, these services will display a video of your property, provide you with yard signs, and more. In addition to using a flat fee listing service, upload your listing to craigslist to reach more potential buyers.
In order to have your listing on the MLS, you do need to agree to pay a commission to the buyer’s agent. Offer at least 2.5%, as this is the average commission buyer agents will receive in the Chicago area. Without the cooperative commission, buyer agents will not show your property and you will have a much more difficult time finding a buyer. Now, just because you are offering the commission does not mean that you have to pay one if a buyer comes to your property without an agent.
Other ways to market your property include yard signs and posting flyers in your community. Everything helps.
ENTERTAIN OFFERS AND NEGOTIATE
Always insist that buyers submit their offers in writing and that they include a pre-approval letter from a lender (or proof of funds if the offer is in cash). The proper way for the buyer to make an offer is to fill out and sign a real estate contract. You can find the form for the standard contract here: Multi-board Residential Real Estate Contract 6.0. If you desire to counteroffer, without signing, you can strike the offer price, write in your price, and send the contract back to the buyer. This particular contract form features a 5-day attorney review period, so once you have an agreement on price, we can make changes to the contract as necessary.
CHOOSE BETWEEN MULTIPLE OFFERS
If you are lucky enough to have multiple offers on your property that are close in price, how do you choose one to accept? This is all about eliminating as much risk as possible. Here are some factors to consider:
A) Cash. A cash offer is always preferred, provided it is accompanied by proof of funds. Proof of funds can be anything that shows you that the buyer has the cash available (e.g. a bank statement). With a cash offer, you eliminate the risk of a deal falling through due to financing.
B) Down payment. Between offers dependent on financing, consider the size of the down payment. The minimum to shoot for is 20%. An offer with at least 20% down has the best chance of success.
C) Different types of financing – Conventional, FHA, VA, etc. Conventional would normally have the lowest chance of denial, but this isn’t always the case. FHA offers are normally the least desirable because an FHA buyer is typically coming to the table with only 3.5% down, and has a lower credit score.
COMPLETE DISCLOSURES, SIGN THE CONTRACT, AND FORWARD DOCUMENTS TO US
Once you have an acceptable offer, there are some documents called disclosures that you need to provide to your buyer. All of the disclosures are here:
After you have completed the disclosures, sign the real estate contract and send the whole packet to the buyer.
Now, your deal is pending and you should send all documents to us for attorney review. Your work is done and we will take over from here.
The three partners of our firm, Kathleen O’Keefe-Rivera, Doug Rivera, and Peter Berk, have over 60 years of combined experience handling real estate transactions in the Chicago area. We also have a tremendous associate attorney, Helena Milman.
We are a client focused firm, which means our clients have the highest priority. When we handle a closing, we will treat it the same as if we were selling our own property. We believe in detailed consultations and we encourage our clients to ask questions throughout the closing process.
Our team is:
Kathleen O’Keefe-Rivera, Partner. Kathy is a native of Skokie and is a 1993 graduate of John Marshall Law School and joined the Illinois Bar that same year. She has handled thousands of real estate closings throughout the Chicagoland area. Kathy is fluent in Spanish.
Douglas Rivera, Partner. Originally from Iowa, Doug is also a 1993 graduate of the John Marshall Law School and was admitted to the Illinois Bar at the same time as Kathy. Doug has been handling both residential and commercial closings in the Chicago area for more than 20 years.
Peter L Berk, Partner. Peter is from downstate Normal, Illinois. He graduated from Loyola Chicago School of Law in 2001, and also was admitted to the bar in 2001. Peter started as a bankruptcy lawyer, and transitioned into real estate later in his career. Peter specializes in handling short sales.
Helena Milman, Associate. Helena was born in Russia and emigrated to the United States as a teenager. She attended John Marshall Law School and joined the Illinois Bar in 2006. Helena handles the document preparation and title work for the firm’s closings.
O’Keefe, Rivera & Berk is a law firm serving real estate clients in for sale by owner transactions throughout Chicago and suburbs, including the Counties of Cook, Dupage, Kane, Lake, Will, Grundy, Kendall, and McHenry. We handle for sale by owner closings in Chicago, Oak Lawn, Barrington, Arlington Heights, Berwyn, Bolingbrook, Burbank, Bridgeview, Cicero, Des Plaines, Deerfield, Evanston, Glenview, Glencoe, Highland Park, Lake Forest, Mount Prospect, Wheaton, Waukegan, Wilmette, Tinley Park, Skokie, Schaumburg, Palatine, Wheeling, Orland Park, Oak Park, Elgin, Naperville, Joliet, and more.
The information on this website is informational only and is not to be construed as legal advice. Always consult with an attorney before selling or attempting to sell real estate. The Law Firm of O’Keefe, Rivera & Berk, LLC is the owner of this website and Attorney Peter L Berk is responsible for its content. Nothing on this website shall be construed as creating an attorney client relationship absent written agreement between the client and the attorney. The Supreme Court of Illinois does not recognize certifications of specialties in the practice of law. Certification in a specialty is not a requirement to practice law in Illinois