Owner Resources and Selling Guide
When you sell your home yourself— also known as "for sale by owner” (FSBO)— it may seem like a great way to save thousands of dollars in agent fees.
Given these fees, you may think that acting as your own seller’s agent will surely be worth the savings. Below we will show you eight reasons why you may want to reconsider. Nevertheless, some of you will try and we are here to help you and we have compiled some of the most important steps and documents for you to use. We do this at no charge or obligation. We want to be your real estate resource in Puerto Vallarta.
Selling your Home – Step by Step
During the sale
During the time your property is on the market, you need to utilize all your skills to make your property appear in web-based advertising as well as on social network sites like Twitter and Facebook. Remember you are competing with hundreds of PV real estate agents that will never show your house to their buyers – why would they? There is no commission in it for them. You should place a large professionally printed sign in a clearly visible area and provide an email address as well as a website where buyers can go to get information on your home. There are plenty of free or very inexpensive do it yourself website makers out there that you can use.
We have encountered numerous FSBOwner signs with just a phone number. When they were called it went to voice message or “I´ll get back to you later with info¨ those scenarios almost always lead to the buyer moving on to the next property. Buyers will want to know square footage of the home, square footage of the land, price per square foot, HOA fees and most importantly you will want to have professional photos taken.
Keep in mind, this is a resort city, buyers are here for a short period of time you have to capture their attention quickly and get them to fall in love with your home right away!
A good rule of thumb is that “Buyers have NO vision” – you have to unclutter as much as possible and the pictures must be well lit.
The Closing Process
Congratulations! You have received an offer on your home! Here in Mexico the offer document is called a Promise to Purchase and click here to download a copy. Once you and the Buyer have reached an agreement there will be a term of due diligence so that the Buyer can review the documents pertaining to the property, conduct (at their expense) the necessary inspections and other contingency items that may or may not apply.
Once all the inspections are done Escrow is opened and contingencies are removed! What does this mean? This generally means that the Buyer has deposited the required 10% good faith deposit into the escrow account and is satisfied with the due diligence. This means you are going forward to closing. You will need to work closely with the Notary to coordinate all closing aspects of the transaction.
As the Seller you will need to be present at the closing or grant a power of attorney to someone that you trust to sign documents at closing on your behalf. If you cannot be present, the power of attorney can be prepared for you to sign.
If you are in the United States, you can have the power of attorney notarized by a local notary and then "apostilled" by the Secretary of State of the state in which you sign. If you Google "apostille + secretary of state + (the name of your state)", information will come up on how to get this done. It is very simple.
If you are Canadian, you will have to have the power of attorney signed in the Mexican Consulate nearest you and each consulate has its own format and rules. This link shows the information on the consulates in Canada.
What else to I need to do for closing? You will need to prepare to liquidate your staff or employees if you have them. You will need to make sure that all bills associated with the property are brought current. You will need to provide wire instructions to your buyer so that they know where to send your proceeds and there may be some incidental costs to cancel your fideicomiso trust or bring yourself current on taxes and fees.
List of documents required for closing
Deed - escritura
No Lien Certificate - CLG Certificado Libre de Gravamen
Know Your Customer (KYC) form for the escrow agency
KYC escrow agency
Photocopies of buyer and seller ID's; Passport and residency cards if they have them
Proof of Address, this can be a CFE or SEAPAL bill
RFC # (This is a federal tax number, not everyone has one)
CURP # (This is a federal residency number, not everyone has one)
Marriage Certificate if the buyer or seller are buying or selling together
Power of Attorney (if needed)
Bank Documents - account, branch, etc
Request of Trust - fidecomiso
Designation of Beneficiaries for the fidecomiso
Yearly Property Tax - predial
HOA no dues are owed letter
Services receipts paid - internet, electrical, water
Promise Agreement - the accepted and signed offer
Extensions or Adendums - if applicable
The closing date is here! Finally! The Notary office will set the time of closing according to the schedules of both Buyer and Seller and based on the Notary office workload and availability. Generally, closings take place after 10 am and before 5 pm. Up to three days prior to going to the Notary, the Buyer will usually do a walk-through of the property just to make sure everything is in place. As Seller, once you leave your property after the walkthrough, you will not return.
At the Notary office you will review the paperwork with the Notary. Aside from the deed transferring title to the Buyer, you will be signing disbursement instructions to the escrow agent which instructs the escrow agent where to send your funds. It is important that you provide COMPLETE wire instructions prior to the closing so that there is no delay in you receiving your money. Wires sent prior to 1:00 p.m. will be transferred that day and may be received in your account on the same day.
Once documents are signed the Notary will send the escrow agent the disbursement and copies of the deed and funds will be released. You provide the keys to the Buyer and the closing is complete!
Post-Closing Follow Up
As a Seller your job is done. Be sure and keep a copy of the transfer deed and tax payment statement for your own records (you will be given this at closing).
Is "Do It Yourself" a good idea?
After reading through the step by step process and looking at some of the required documents you may be asking yourself "maybe this is a bit more complex that I imagined." Don't fear we can sit down with you and show you how listing your home with us makes this process easy! We have an in-house attorney and long standing relationships with the notaries that do all of the real estate closings in Mexico. More importantly, we have a program that will get your home seen by thousands of potential buyers.
8 Reasons to Choose a Real Estate Agent Over "For Sale By Owner"
Why it's worth getting a pro to sell your home
1. Realtors May Not Show a "For Sale By Owner" Home
In an FSBO deal, the buyer’s agent knows there won’t be a professional colleague on the other end of the transaction. Even if a client insists on seeing your home, the agent might discourage making an offer, citing the hassles and risks of trying to close the deal without a professional representing the seller—and without a guaranteed commission.
“There are only two reasons why I show an FSBO: There is no other inventory available or the price is ridiculously low,” says Bruce Ailion, a realtor with RE/MAX Town & Country in Alpharetta, Ga., near Atlanta. Experienced brokers have generally been burned by an FSBO transaction in which the seller did not pay the full agreed commission—or any commission at all—to the agent who brought the buyer, says Ailion. “FSBO sellers are viewed as unrealistic, unreasonable, and difficult sellers whom professional realtors have rejected,” he says.
Still, there are buyers’ agents who will show your property under the right conditions. That may mean signing an agreement with the agent that states the percentage fee that you, as the seller, will pay the agent. (The agent may specify a x% commission, trying to nab both the buyer’s and seller’s side.) An agreement should also clarify that the agent is only working on behalf of the buyer. It may also state that as the buyer’s agent, the real estate agent has a duty to disclose to the client all the information the seller provides to them, such as the need to sell by a certain date.
If you want to be taken seriously by sellers’ agents, get the best price, and make sure you don’t miss any key steps in the process—or risk a lawsuit—it’s better to use a real estate agent than to try to sell your home yourself.
2. Agents Avoid Emotional Sales
Selling your home is typically an emotional process. Having an agent keeps you one step removed and makes you less likely to make stupid mistakes, such as overpricing your home, refusing to counter a low offer because you’re offended, or giving in too easily when you have a deadline for selling. “A realtor can follow up without communicating a sense of eagerness or desperation; following up is their job,” says Ailion. “When a seller repeatedly checks, it signals, rightly or wrongly, the willingness to accept a lower price.”
If you forgo an agent, you’ll also have to deal directly with rejection every time a buyer’s agent tells you that the client isn’t interested. “As the homeowner, it can be quite upsetting hearing some of the comments that are made by buyers and, oftentimes, their agents,” says David Kean, a realtor with Beverly & Co. in Beverly Hills, Calif.
An agent can take the sting out of the rejection and put a positive spin on any negative feedback. “It is more difficult for [the seller] to keep their emotions out of the sale, because there’s no third party to bounce anything off of,” says real estate broker Jesse Gonzalez, president and founder of North Bay Capital in Santa Rosa, Calif. “For instance, if the property sits on the market, the homeowner doesn’t know the reason the home is not selling."
“The emotions will always be there for the seller,” Gonzalez adds, “but constructive criticism can be easier to digest for the seller when it comes from a broker who is on their side, trying to get the best for them.”
3. Real Estate Is a Full-Time Job
Can you rush home from work every time someone wants to see your home? Can you excuse yourself from a meeting every time your phone rings with a potential buyer? At the end of a long workday, do you have the energy to take advantage of every possible opportunity to market your home? Are you an expert in marketing homes?
Do you have any experience doing so? Your answer to all of these questions is probably “no.” An agent’s answer to all of these questions is “yes.”
4. Agents Access Large Networks
Yes, you can list your home yourself on Zillow, Redfin, Craigslist, But will that be enough? Even if you have a large personal or professional network, those people will likely have little interest in spreading the word that your house is for sale. You don’t have relationships with clients, other agents, or a real estate agency to bring the largest pool of potential buyers to your home. A smaller pool of potential buyers means less demand for your property, which can translate into waiting longer to sell your home and possibly not getting as much money as your house is worth.
“A good real estate agent should have a database of names and contact information, so he or she can quickly spread the word about the property they just listed,” says real estate broker Pej Barlavi, owner and CEO of Barlavi Realty in New York City. “I have a distribution list of over 3,500 contacts that get an email blast from me within 48 hours that we list a property. Then I start to market the property in every available website, MLS, and site for real estate to keep the momentum and [to keep] showing consistently.”
5. Weeding Out Unqualified Buyers
An agent can find out whether someone who wants to view your house is really a qualified buyer or just a dreamer or curious neighbor. It’s a lot of work and a major interruption every time you have to put your life on hold, make your house look perfect, and show your home. You want to limit those hassles to the showings most likely to result in a sale.
“Realtors are trained to ask qualifying questions to determine the seriousness, qualification, and motivation of a prospect,” says Ailion. Realtors are also trained to ask closing questions about how long buyers have been looking, whether they’ve seen any other homes that would work for their needs, if they are paying cash or have been prequalified, what schools they are looking for, and so on. They can move a qualified and motivated person to the point of purchase. FSBO sellers lack this training and skill set, he says.
It’s also awkward for buyers to have the seller present, rather than the seller’s agent, when they’re touring the home. “When showing a house, the owner should never be present,” says Kean. “Nothing makes a potential buyer more uncomfortable than the current owner being in the house. When a seller is present, most buyers will rush through a house and won’t notice or remember much about what they saw.”
6. Price Negotiations Take Skill
Even if you have sales experience, you don’t have specialized experience negotiating a home sale. The buyer’s agent does, so they are more likely to succeed in the negotiation, meaning less money in your pocket. “An experienced selling agent may have negotiated hundreds of home purchases,” says Kean. “We know all the games, the warning signs of a nervous or disingenuous buyer.”
Not only are you inexperienced; you’re also likely to be emotional about the process, and—without your own agent to point out when you’re being irrational—you’re more likely to make poor decisions. According to Kean, instead of an offended seller making an emotionally charged, inappropriate response to a buyer, an agent will say something more professional, such as, “The seller has declined your initial request but has made the following counteroffer.”
Sellers who go solo also typically aren’t familiar with local customs or market conditions. “Agents know the pulse of the market and what’s driving demand, which gives them an advantage by knowing what terms are worth negotiating for and which are worth letting the other party win,” says Rob McGarty, owner and designated broker with Bushwick Real Estate in Seattle.
Furthermore, says Gonzalez, agents know the local customs for selling a home, such as whether the buyer or the seller typically pays fees such as transfer taxes and closing costs.
7. You Ignore Your Home’s Flaws
Agents are experts in what makes homes sell. They can walk through your home with you and point out changes you need to make to attract buyers and get the best offers. They can see flaws you’re oblivious to because you see them every day—or because you simply don’t view them as flaws. They can also help you determine which feedback from potential buyers you should act on after you put your home on the market to improve its chances of selling.
“Anyone who’s determined to sell their own home should hire an interior designer or property stager to assess the current condition and market appeal of the home,” Kean says. “All sellers need to hire a professional cleaning service to give a home a deep cleaning before putting it on the market. A good cleaning will help remove any distinct odors, such as pets, that the inhabitants can’t smell, since they live with them every day.”
8. Exposure to Legal Risks
A lot of legal paperwork is involved in a home sale, and it needs to be completed correctly by an expert. One of the most important items is the seller’s disclosures. “A seller of real estate has an affirmative duty to disclose any fact that materially affects the value or desirability of the property,” says attorney Matthew Ryan Reischer, founder and CEO of LegalAdvice.com. A seller can be held liable for fraud, negligence, or breach of contract if they do not disclose properly. “The issue of whether a fact is material or not is generally established in the case law of the state in which you live,” says Reischer. Yes even in Mexico!
Unless you’re a real estate attorney, your agent probably knows more about disclosure laws than you do. If you fail to disclose a hazard, nuisance, or defect—and the buyer comes back to you after having moved in and found a problem—the buyer could sue you. Agents can make mistakes, too, but they have professional errors and omissions insurance to protect themselves and give the buyer recourse, so the buyer may not need to pursue the seller for damages.
The Bottom Line
It’s a tall task to learn how to sell your house without a realtor—and selling your home will likely be one of the biggest transactions of your life. You can try to do it alone to save money, but hiring an agent has many advantages. Agents can get broader exposure for your property, help you negotiate a better deal, dedicate more time to your sale, and prevent your emotions from sabotaging it. An agent brings expertise, which few FSBO sellers have, to a complex transaction with many potential financial and legal pitfalls. Contact us and we can show you what your home is worth and help get it sold!