How do you close on a for sale by owner home?

Question

We have our house up for sale ourselves and someone just made an offer. They're getting a FHA loan and said that we would probably need to pay closing costs, but I can't get anyone to tell me what those are or how much they'll be.(which will make a difference in how much we take on the house) Also, since they're going through a mortgage company do we still need to have our own lawyer? Any advice you can give would be appreciated.

Answer 1

That's the fun part of doing it yourself.

No matter what you want the house has to pass appraisal by the banks appraiser.

You should have gotten a market analysis.

Get a lawyer who specializes in Real Estate.

There will also be an inspection and items to fix.

Answer 2

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Answer 3

This is why you need a real estate agent when you sell your home.  FHA does not require you to pay closing costs, but how would you know that?  Pay them if you like, but the most you can pay is up to 3% of the sales price.  How much of that 3% is something you negotiate.  Get a lawyer.  Some states require lawyers, others just usually do it that way.  You could talk to a title company about the costs.  They'll be able to tell you their costs which will be the lion's share of the expense, and they may be able to tell you what other services you need.  Who pays for what is a matter of local custom and negotiation.

The minimum closing items will be an appraisal, title work, flood certification, maybe a survey, taxes and home owners insurance which will be prorated for you and the new owners, and any weird taxes your state/county may have.  The buyers' lender will handle most of this.  Once the contract is signed, the lender does most of the work.  The title company will schedule a closing time and place with you, and hand you a cashier's check for your proceeds after paying off any existing liens.  You'll need to provide them with the name of your lender, and the account number.  They'll probably already know the phone number.

Answer 4

You will need a lawyer or a closing company to handle all the closing details (though usually the buyer picks them).  You really may want a lawyer that represents you, or an agent, or someone who knows real estate to look at the contract as it sounds like you may need help with this and there are lots of pitfalls in these contracts, so have someone look at it for you.

Also, the closing costs usually run a few % or the sale for the regular stuff, but depending on how the bank financing is done the bank can charge alot more (even up to 10% of the sales price in some cases) in additional closing costs.  However, its not your concern what their closing costs are.  When they put in a contract they should state exactly how much closing costs they are requesting you to pay (something like seller will pay buyers allowable closing costs up to $2000).  

If they just wrote into the contract that you will pay all their closing costs, you cross that out and tell them to either insert a number or you will (and if they tell you to insert a number put like $1000 or less in there - make them give you a valid number).  Do Not Sign a contract that says simply you will pay all (or even some %) of their closing costs - make them give you a specific dollar amount you are to pay for their closing costs.

Answer 5

the closing cost will be about 3% but as to a lawyer it all depends if you are in an atty state or just a notary state. That I cannot tell you. Most states the title company closes the loans.

Answer 6

Definitely get a lawyer. With FHA, they will probably be asking for 3% for down payment assistance & up to 6% for closing costs, based on the purchase price.

Answer 7

If you have a written offer it should have the closing costs request in the offer...

Having a lawyer or not is depending on your state.  Not all states require you have a lawyer.

Why are you seeking advice on Yahoo Answers from a bunch of crazy internet people then from a professional?

Answer 8

Now you know why you needed a Realtor.

I can't answer that question for you either, because I would need to speak directly to the bank, primarily to figure out if you are getting screwed over or not.

The bank will require the buyer to close at an attorney's office or a title company.  They represent the buyer...not you.

You need to have your own attorney, at minimum, to represent your own interests.

PS:  Seller concession is MAXED at 6% on an FHA loan.   You don't have to worry about down payment assistance unless they ask for it...which they probably will not or they would have included that in their offer...the sales price of the house is usually increased when an offer is made like that.

Answer 9

If you were an escrow state, I'd suggest getting an est. closing statement to see how much of the closing costs you would be required/requested to pay.  You need to put into your contract limits of the amount you're willing to pay.  When I was still a processor, I had one that we were able to lower the buyers interest rate by 2% because of all the c/c the seller's said they would pay.

Try and do the same type of thing in your state.

Answer 10

As the others basically said, if you don't know what you are doing, why are you doing this?  

FHA does not require the seller to pay for closing costs, this is the buyer's responsibility.  You can help with closing costs if you want, but what they are will vary by lender.  The mortgage company should be able to give you a good faith estimate in what the closing costs are going to be.

The mortgage company only gives the loan to the buyer, they do not represent you in any way, shape, or form to protect your interests.

My advice, get a professional to assist you.  You are flying blind here and are setting yourself up for a butt kicking.