In this edition of the Utah Real Estate Podcast, we talked about:
- For sale by owner (FSBO)
- The reasons you don’t want to sell your own house
- Being ‘Gephardt Approved’
- What is your net goal?
- Closing costs and title insurance
- The liens and encumbrances maze
Press the ‘PLAY’ button to listen to Utah Real Estate #47: The For Sale By Owner Maze
YOUR CALL TO ACTION
If you’re looking to buy or sell a house in Utah, please call or text me (Patrick Wiscombe) at (801) 874-7717.
COOL VOICE GUY: Information you need, the Podcasts you love. This is the PatrickWiscombe.com Podcast Network. Its Real Estate news you can use. This is the Utah Real Estate Podcast, giving you free expert advice and tips, if you’re looking to buy or sell a house. And now, here are your hosts, Ned Chidester and Patrick Wiscombe.
SPONSOR: The Utah Real Estate Podcast is brought to you by Weichert Realtors at the Rockies. If you are looking to buy or sell a house in the state of Utah, please call or text Patrick Wiscombe at 801-874-7717.
PATRICK WISCOMBE: It’s the Utah Real Estate Podcast. My name is Patrick Wiscombe. Thank you for tuning us in, and taking us along wherever and however you’re accessing the podcast; be it on www.patrickwiscombe.com, or www.utahrealestateauthority.com. Coming up on today’s edition of the Utah Real Estate Podcast, we are going to talk about For Sale By Owner. Joining me for the podcast is Ned Chidester, one of the owners at Weichert Realtors at the Rockies. Hi there.
NED CHIDESTER: Good morning sir.
PATRICK: Let’s talk about For Sale By Owner. Why should people NOT want to sell their own house?
NED: You know Patrick, that’s an interesting topic. I’m glad you brought that up this morning. We have a belief system with our organization, as you know that if you don’t need a Real Estate agent to sell your house, that’s awesome! I mean we really do have a belief system that that is great. We want to be remembered as people that are here to help, and we’re here to help you achieve your goals. If you don’t need a Real Estate agent, and you can sell your house on your own, that’s great! You’ve saved the money! We are firm believers and supporters of that. However, if the time does come that you need a Real Estate agent, whether it be for the time, for marketing, for negotiating; whatever the case may be, we want to be remembered as a company that didn’t bug you. It’s that we were here to help, and not to be a disturbance, or to merely cost you more time, and more money.
PATRICK: Let me put it this way. We are not; let me emphasize that, NOT the company that says, “We’re not happy ‘till you’re not happy!”
NED: That’s exactly right. And you know to back that up even further, we are the only Real Estate Company, as you know, that is Gephardt approved. Bill Gephardt came in here and really went through our company’s books, went through our history with the Better Business Bureau, went through our policies and procedures; and we were able to earn that distinction, and to this day we are the only Real Estate Company that is Gephardt approved.
PATRICK: Let me get back to For Sale By Owner. I know one of the procedures we have internally, when we call For Sale By Owner owner’s, is to ask them what their goal is.
PATRICK: And we can say, “How much are you trying to net on the house?” “What is your end goal?” “Other than selling your house, how much money do you want to walk away with?” And obviously, they’re going to pay us a commission, but my point is this, we always try and find out what your goal is, and then we try and work the sale to meet your goal.
NED: Absolutely! Most people, in fact it’s an interesting question that is proposed, and most people have a goal in mind of having it boil down to money, and how much money they want to end up with. Most people don’t have a grasp on how things work; as far as how much money they’re going to end up with. They think if they sell their house for $100,000, then they’re going to go to the closing table and someone is going to give them $100,000, and they’re going to have $100,000 in their pocket at the end of the day. They don’t understand that there are costs involved. There is also technique. There’s also finding a buyer and tracking, making sure that they are approved. There are also title companies, mortgage companies and appraisers, and home inspectors, and all kinds of people that are involved in a transaction. And it really is deeper than the average consumer knows about, and so the more that we can educate people, and let them know exactly how things work, the better off we’ll be; and we can be helpful as opposed to being involved in a transaction where we’re not helping.
PATRICK: Ok, now when you talk about all of those fees, you know the title fee that’s required, a lot of people don’t know that some of these fees are absolutely required. It is a cost of selling your house.
NED: Absolutely! You’ve got title insurance, which is required. You need to guarantee title to the new buyer.
PATRICK: But why is that important? Let me stop you there. Why is guaranteeing title even important, to someone who is listening to this podcast for the first time?
NED: Guaranteeing clear title to someone is vitally important. If somebody is getting a loan to buy your property, they have to have a guarantee that the title is clear, and free of liens, and free of any problems associated with that title, or they cannot get a loan based on a clouded and unsecured title.
PATRICK: Ok, most people think of a title as a car title. It is not that, it is literally the history of the property for the last, I forget how far back, the last 100 years, 70 years something like that?
NED: It goes back until, you know, the property was first done; meaning, when you started with the vacant ground, and built a house. It checks the chain of title from whoever owned it at that point to whoever owns it now, and everybody in between; including work that was done on the property, if contractors were paid, and so on and so forth. It really does check everything. As well as it checks, sometimes you have certain liens or judgments, or things that are attached to the title of the property based on people who have owned the property, or people who currently own the property, and those liens and encumbrances are checked as well.
PATRICK: Assuming that there’s a lien on a house, meaning… let’s say the IRS….
NED: Yeah, IRS liens are a bugger! They really do need to be taken care of. They are typically non-negotiable, and one of the things we run into is that those pop up at the last minute and need to be taken care of. But, those will be attached….
PATRICK: But, can you sell a house with a lien on it?
NED: You cannot sell a house with a lien on it, well at least, I shouldn’t say that, if you’re getting a loan on a property, that lien and everything needs to be clear. Your lender is going to require clear title before they loan, to give you kind of an idea of where I’m going with this….. if you have a property with a lien on it, and it’s not cleared off, and you buy the house, your lien or the lien from your lender would show up in the secondary position, subject to the rights of the lien in first position, which is still on the title. So those liens need to be wiped clear. The lender who is loaning the money is going to require that they themselves are in a first lien position; so ahead of any other liens that are already on the property.
PATRICK: If the intent of selling the house is to resolve the liens that are on the house is that even possible?
NED: Absolutely. Some liens can be negotiated. IRS liens are pretty tricky. Liens from child support and those kinds of things are pretty tricky. But typically, you have liens that can be negotiated or just out right paid.
PATRICK: And that’s the result of selling the property.
PATRICK: Ok, so if you are in that situation, you have liens and you are literally using your house as an asset to pay off your debts, do you have to come to the table with that up front?
NED: No, it can be taken from the proceeds of the sale. Depending upon the amount of equity that there is in a property, it can be used, you know if you owe so much money and the buyer is willing to pay you more, and the home appraises, and all those kind of things, it can be paid at the closing table. It’s not extra money that would need to be brought.
PATRICK: I kind of railroaded us into title insurance and the importance of title. So basically, to summarize, that there are costs involved that maybe you’re just simply not aware of. Or, and I get this a lot, there’s a lot of costs that people see on the closing documents; going, “Why do I have to pay that?”
PATRICK: You know that’s dumb, “You’re just making money off me now.”
NED: Yep, yep exactly! That’s the thought process.
PATRICK: In the meantime, if you, your family, or your coworkers are looking to buy or sell a house, now is a really good time. Be sure to contact me or Ned. My cell phone number is 801-874-7717. Ned’s is 801-420-7653. You can also check us out online at www.utahrealestateauthority.com. So, for Ned Chidester, one of the owners at Weichert Realtors at the Rockies, I’m Patrick Wiscombe. Thanks for listening. We’ll talk to you tomorrow.
COOL VOICE GUY: Helping you buy or sell a house, this has been the Utah Real Estate Podcast with your host Ned Chidester and Patrick Wiscombe, sponsored by Weichert Realtors at the Rockies.