For Sale By Owner (FSBO)

A contract must  have

1. Name the parties to the contract: The parties should include the buyer(s) and seller(s). The contract should state the full legal names of all parties and identify each party as a buyer or seller.
2. The purchase price of the property. Every FSBO contract should contain the full purchase price for the property. This is the total amount of the purchase price before any deposit/earnest money is deducted.
3. The security deposit (if any): If a deposit or earnest money is paid the contract should reflect the amount that was paid.
4. List of fixtures/personal property: The contract should provide a list of any appliances, furnishings or other items being sold with the house;
5. A legal description of the property:  The contract should provide the street address. If available the full legal description of the property is also recommended. A full legal description can be found on your deed to the property;
6. The closing date; The contract should contain a provision that explains how and where the sale of the property will be finalized. This information should include the time period within which the closing of the sale should occur. A common provision is for the sale to close within 60 days of the signing of the contract. Closings often occur at title company offices, but also may occur at an attorney’s office or a bank.
7. Contingency clauses: The contract should contain detailed information about any contingency, or any events that can make the contract invalid if they occur. The buyer would be free to walk away from the contract without penalty if the contingency is not met . There are some common contingencies that many contracts contain
   • Home inspection
   • Obtaining financing,
   • Buyer selling their present home

Establishing a succession plan is one of the most important business decisions a practice owner can make.

Provided a succession plan for a junior associate begins with hiring the right associate. For this reason, it can involve more planning and can be more difficult than selling the practice to an outside party.

Physicians must determine if the practice has sufficient volume to handle hiring an additional associate. Additionally, when hiring, steps should be take to evaluate if the new hire is capable of running the practice.

Choosing this exit strategy can provide great flexibility for the exiting physician and it allows them to maintain control over the day-to-day management of the practice. This can also provide for the best transition of the patient base. This strategy, however, requires the exiting physician to take on certain training and management duties to ensure the associate properly trained.

Strategic, long term planning, is best in this case and basic steps should be considered in preparing a succession plan that transfers ownership to ensure that maximum value is preserved.  To preserve and extract the maximum value of the practice, succession planning should begin early, preferably 7 to 10 years before retirement to ensure a smooth transition.

All practices, from a simple family practice to a complex group, need a succession plan. A Buy/Sell Agreement is an essential tool in a good succession plan. Proper planning greatly helps during times of transitions or when issues arise

One of the major issues in any Buy/Sell agreements is valuation. We have tools and resources that help a practice determine the proper value of their practice. Additionally, we can craft language in operating agreements or shareholder agreements that spells out the valuation process is determined.

Allocate closing costs. a good purchase agreement should set forth the payment of necessary costs of closing, which are allocated as agreed between the parties. One potential cost is for deed preparation and recording. A deed is the document that formally transfers ownership of the property from seller to buyer. In most states, a deed must be recorded with a certain local government office in order to be put into effect. The contract should also address the payment of closing costs, which can be paid by one party or both parties. There also should be a provision that addresses the payment for a title insurance policy. Title insurance ensures that the property is being transferred free of any liens, encumbrances, or claims to ownership by third parties.^[6]

• A typical FSBO contract provision that addresses closing costs is as follows: “Seller shall pay at closing all costs related to the release of any mortgage on the property, delinquent real estate taxes, and outstanding mechanic’s liens.”
• Another way to address different types of closing costs is as follows: “Buyer shall be responsible for the payment of any title insurance policy and survey performed of the property. Buyer also shall bear the costs of preparing and recording the deed and any mortgage secured by the property that is the subject of this agreement.”