For Sale By Owner- Not As Simple As You Think!
Many commercial property owners make the decision to sell without the assistance of a broker. This practice is commonly known by the acronym “FSBO”. Selling a property on your own can be a challenging task and requires the owner to take on the role typically reserved by the real estate broker (i.e. advertising and marketing the property, conducting tours with potential buyers and possibly brokers, negotiating directly with prospective buyers or their representation, etc.). In addition, the property owner should be aware of certain legal issues that arise with FSBOs, which could impact the transaction.
The Contract
Let’s say you find a buyer who is willing to make an offer on your property. Who will write the contract? If the buyer is also unrepresented by a broker, you should strongly consider hiring an attorney to draft the purchase and sale agreement. Drafting your own real estate contract, or relying on a contract template from the internet, may not be sufficient to adequately protect your interests. Even if the buyer is represented by an agent who drafts the contract, you will want to seek legal advice to insure that the contract is reviewed with the seller’s interests in mind.
Title Work and Survey
In most cases, the real estate contract will provide that the seller is responsible for providing title insurance for the property and a recent property survey. If the Colorado standard real estate contract is used for the transaction, the seller will also be required to provide other property documents and records to the buyer (i.e. tax statements, association documents, etc). A FSBO seller should be certain to comply with the timeline designated to complete the title work, survey, and other items that may be requested of a seller. Failure to do so may result in a default under the contract, and the right of your buyer to walk away from the deal.
FSBO sellers should carefully consider the legal ramifications of selling their property without the assistance of a commercial real estate professional or Realtor. At a minimum, a real estate attorney should be hired to represent the seller during the entire process.
