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Real Estate Sales by Owners

April 12, 1987

Finding Tom Furlong's article on real estate sales on the front page of The Times (March 25) caused considerable surprise in the real estate community.

Furlong failed to mention that one reason why a For Sale By Owner's property might sell quickly is that it could be below the market value. With prices rising as they are, the best way to get the highest price is to expose his property to the largest number of qualified buyers. Since most buyers don't feel competent to shop By Owner, that means the home should be listed with a broker, whose vast network of multiple listing services makes sure that each listing is available to all buyers, the sophisticated and the normal home seekers who feel the need to rely on a broker to guide them through the maze of legal sand traps, lenders, appraisers, home inspectors, termite companies, etc.

Furlong also neglected to say that many of the By Owner's buyers are specialized bargain hunters, eager to deduct and save not only the cost of the commission, but whatever else they can talk the seller out of. Nor did he touch on the risks of opening one's home to strangers when the wife and kids are at home alone.

And the paper work pursuant to a transfer of title was barely mentioned. In the real world, the pile of necessary documents can reach an altitude of one or two inches: a four-page sales agreement, a two-page disclosure statement from the seller describing all the conditions of the property (now required by law), and city codes requiring smoke detectors, safety glass, water conservation, ad nauseam. To an individual without the help of a professional the sheer numbers of the documents can be overwhelming, assuming he is competent even to understand the questions.

Under the new laws, even some attorneys are not qualified to deal with all the forms, disclosure statements, agreements and escrow documents, to say nothing of the legal liability of an owner should he forget to do or to disclose something.

There is more to selling a home than just finding a buyer, which is the primary service offered by discount brokers. The legal responsibilities of brokers to protect both the buyer and the seller are now huge, with judicial decisions hinging more and more frequently on details. The broker is responsible to the seller for his mistakes and errors, and smart sellers want him there in the future to back up his work.

We've had fast real estate markets before, and each time, strangers appeared in the community, offering discount brokerage services. But when the market regained its equilibrium and the dust had cleared, most were not to be found. So that when a buyer decides to sell and finds that the beautiful family room was not built to code or with permits, or the seller receives the summons on the lawsuit for failing to make code-mandated repairs, which caused injury or damage, they discover they're alone. At such times, the lack of professional help is felt acutely, and too late it is remembered that you get what you pay for.


Woodland Hills

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