Nebraska Home Selling Process
After the Great Recession, a lot of homeowners are still challenged to find sufficient equity in their home. The temptation is great to “cut out the middle man” and try to sell a home without a Realtor. If done properly, a Nebraska homeowner can sell a home “for sale by owner” and cash out thousands of additional dollars in equity. If done improperly, however, the FSBO process can result in a longer selling period, a lower sales price, or even lawsuits between buyers and sellers.
Selling a home takes more than marketing and enthusiasm. The home selling process is time-intensive and can have great consequences. The key is to know when to hire a Realtor to handle the details, or whether you can instead get some legal advice and do the hard work yourself. If you have started down the path of selling your Nebraska home by yourself and you are feeling overwhelmed, a Nebraska real estate lawyer can provide some valuable and comforting guidance for much less than Realtors’ commissions. However, if you have determined that the value of your time outweighs the potential savings from not paying a commission, hire a Realtor sooner rather than later and let your agent handle the hard work.
Professional Realtors in Nebraska will typically charge a seller a commission of anywhere between 6% and 9% of the home selling price, based on a variety of factors. Many homeowners considering selling their homes without a Realtor make the assumption that this is how much they will save by selling their home by owner. However, the listing agent’s commission is generally split four ways – first between the listing broker and the listing agent (according to their contract), but more importantly, with the broker and agent representing the home buyer as well. Buyers’ agents typically represent the buyer without charging the buyer a percentage commission because they will be compensated by the listing broker and agent. Each listing on the multiple listing service (MLS) tells other Realtors exactly what commission they will receive for representing a buyer in a sale of that home.
Determining How to List Your Home
“Listing” your home for sale technically means adding it to the MLS, which is the constantly changing list of homes that are for sale, under contract, and sold in an area. Each MLS is specific to a certain geographic area and is owned by the local board of Realtors. Only licensed Realtors can list a home on the MLS. In some areas, particularly rural communities, real estate agencies simply maintain their own list of properties for sale. Having your home listed gets it exposed to the most potential buyers by sharing it directly with other Realtors with active home buyers and by sharing it though various feeds to local websites like YourBestHomes.com, WestOmahaHomes.com, OmahaRealEstateForSale.com or third party services such as Realtor.com, Zillow, Trulia, or Yahoo! Homes.
That said, there are various listing options for home sellers in Nebraska. “Sale by owner” prospects can consider an open listing, or a non-exclusive listing that allows you to sell your home yourself. An open listing is where the FSBO seller is willing to work with and compensate buyers’ agents, typically between 1 and 3% of the sale price. This reduces your potential savings by not using a Realtor, but encourages Realtors to show your home to the buyers they are working with. This is helpful, but it will not get your home listed on the MLS or marketed by agents. A non-exclusive listing, on the other hand, allows you to sell your home by yourself while a Realtor simultaneously lists your home on the MLS and markets your property. You save a commission if you find a buyer yourself, but you pay the commission if your Realtor finds a buyer first.
If you decide to hire a Realtor to sell your home instead, it will be an exclusive agency listing or exclusive right to sell listing. This gives your agent the exclusive right to sell your home, which provides more incentive for the agent to work harder and smarter to find a buyer. This should allow you to sell your home quicker, at a higher price, and with the least amount of inconvenience to you as the seller.
Pricing Your Home For Sale By Owner
Most prospective home buyers think that they can buy a “for sale by owner” home for less than market value because they know the homeowner isn’t having to pay a Realtor commission. This places downward pressure on the sales price up front. However, if you simply reduce your price, you are handing the Realtor’s commission to your home buyer, yet still having to do all of the work of selling your home. That is not a sound market pricing strategy and you lose out in the end.
Pricing a home for sale appropriately requires doing some work, starting with looking at information from recent local comparable home sales. The MLS is the best source of this data, but it will not be available if you do not list your home with a Realtor. You can instead use public records data from the assessor’s office or register of deeds. Some local newspapers report recent sales, but relying on such reports is not the most complete method of analyzing sales data. If an appraisal has been done recently, that can be instructive. Local market and economic information is relevant as well. The market is always changing, so the price needs to be appropriate for today’s market. If your home been listed for sale for a while without finding a buyer, you should periodically reevaluate the market and consider price changes.
Nebraska law requires nearly all sellers of homes to provide the buyer with disclosures addressing the condition of the property and the presence of lead-based paint. There is no exception for homeowners selling their home themselves. These disclosures inform potential buyers of any information that might impact their decision to buy the home. The seller’s property condition disclosure statement identifies preexisting defects and other pertinent information about the house’s condition, including the foundation, roof, siding, HVAC systems, utilities and rodent or termite problems. There are serious consequences for failing to adequately disclose known defects. The outcome could be an effort to void the sale or even a lawsuit to request money damages in court. The Nebraska Real Estate Commission has an official form for the Seller’s Property Condition Disclosure Statement.
How to Respond to an Offer on a For Sale By Owner Home
After you have done some marketing, you will most likely be contacted by prospective home buyers. With the right showing and presentation, you will probably get some verbal offers from buyers, and usually for less than the asking price. The offer may include specific conditions or contingencies, such as a particular closing date, inspection waivers, requested repairs or personal property the buyer would like to have as part of the sale. Depending on the type of offer, it is appropriate to respond with a counteroffer, which often consists of accepting it subject to certain conditions.This back and forth can continue endlessly. Once an offer or counteroffer is accepted without any other changes, the parties enter into a written agreement and work to fulfill its terms. The written purchase agreement is the final, written contract between the parties.
Is a Purchase Agreement Necessary to Buy a Home in Nebraska?
A written purchase agreement is absolutely necessary for the parties to have a legally-binding contract. Contracts involving real estate are subject to a special rule that requires them to be in writing to be effective. The written contract must identify the property and include the purchase price, closing and possession dates, and what is included in the sale. It should also describe what kind of title is being conveyed, any warranties, and what rights the buyer has to a final walk-through. While there are many standard or uniform residential property purchase agreements, an Omaha real estate lawyer can help explain what the various provisions mean so that you are fully informed for the transaction.
What Happens Between Contract and Closing?
The real estate purchase agreement should address the buyer’s right to a home inspection and possible responses to the inspection report. If the home inspection discloses property defects, the buyer and seller can negotiate to determine how to remedy or address the defects and preserve the sale. The seller can offer the buyer an allowance so the defects can be repaired, or the seller can do the work himself or herself, or the parties could mutually agree to adjust the sales price given the new information about the home’s condition. If the home inspection reveals a defect that should have been but was not disclosed by the seller, then the transaction may be doomed.
What Happens During the Closing of a Home Sale?
The “closing” is the event that actually finalizes the sale and where the funds and title change hands. It is the last step of the home selling process. Typically a closing is handled by a title company or a lawyer, who may also serve as an escrow agent to hold the buyer’s funds until the seller delivers title as promised. If a home buyer is paying cash, they will typically provide a cashier’s check or wire the funds to the escrow agent. If the buyer is borrowing the money to pay for the house, he or she will sign a promissory note and either a mortgage or deed of trust (also called a trust deed). The lender will have wired the funds to the escrow agent instead. The seller does not have to attend the closing and usually does not. The seller will typically sign the necessary deed set in advance for the escrow agent to hold until the necessary funds are delivered. The escrow agent then furnishes the deed to the buyer and the funds to the seller. It is possible for this to be accomplished without a title company or attorney, but it is certainly not advisable given what is at stake.
A Nebraska Real Estate Attorney Can Help with For Sale By Owner Transactions
Home owners in the greater Omaha area should consult with a Nebraska real estate attorney before seeking to sell their home by themselves. Real estate agents are trained to anticipate many of the obstacles and risks that accompany a home sale. If you choose to forego the services of a professional Realtor, then you should seek legal counsel to make sure that you protect your interests when selling your home without a licensed real estate agent. The Modern Law Firm offers homeowners selling their home without a Realtor a flat fee service for preparation of the purchase agreement and advice on negotiation. Schedule a consultation online now or call 402-934-0198 or toll-free 1-888-934-0198. Learn more about Ben Thompson, a Nebraska real estate lawyer and Realtor in Omaha here.
Modern Law Firm is a law firm that helps Nebraskans achieve the American Dream through owning homes, starting businesses, strengthening families, and shaping legacies. Learn more about the firm's general law practice here.
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