A For Sale By Owner-6 Reasons To Use Caution

A For Sale By Owner-6 Reasons To Use Caution

When you’re looking to buy a home, you may wonder, “Does it matter if the property is listed with a real estate agent or a for sale by owner who are trying to sell it themselves?” Um, yes. It matters. A lot. The truth is: When it comes to signing contracts, handing over escrow money, and digging into the home’s history, going it alone can end up costing homebuyers a bundle.

The following are 6 reasons to avoid a For Sale By Owner (FSBO) home.

1. Are you sure it’s legit what they are selling?

via GIPHY

Unfortunately, scams abound and the real estate industry isn’t immune, specially if buying a for sale by owner. If you don’t have an agent looking out for your best interests, it’s easy to be duped. For example, would you know what a proper sales contract looks like if real estate is not your field of expertise? Depending on the state in which your reside, there are a number of legal forms that must be completed. In addition to a contract, property disclosures, occupancy agreements, and lead paint records are just a few documents that must be signed. Because a for sale by owner is not bound by a code of ethics as Realtors® are, there’s no way to be certain they won’t try to take an unsuspecting buyer for all he or she is worth. No would-be buyer should suffer sleepless nights wondering where that escrow money ended up.

2. Full disclosure When Selling

via GIPHY

Obviously, when you’re making a significant investment you want access to as much information as possible. Real estate agents have the ability to get you the answers you need. Whether it’s about repairs made to the home or liens against the property, the more you can find out, the better off you’ll be when it comes to negotiating. Plus, no one likes an unpleasant surprise when it come to a for sale by owner. Remember: Knowledge is power. On your own, would you know what to ask a seller? And, more to the point, would you know if a seller is hiding key information? It’s a risk better off not taking.

3. Are you a skilled negotiator?

via GIPHY

In the course of doing business, you’ll probably have to go back and forth quite a bit — and not just about the price of a for sale by owners home. What if repairs need to be made? Are you ready to haggle over who takes care of a leak or a structural issue? What if you can’t agree on a closing date? When you have an agent, he or she will handle all that for you.

4. Is money an issue?

via GIPHY

The main reason sellers choose to sell their homes as a for sale by owner is to save money by not having to pay an agent’s commission. So what happens if your seller is strapped for cash but problems pop up during a home inspection and they can’t afford to fix them? This, in turn, raises a red flag as you start to wonder if they took the cheap way out when making important home repairs.

5. Are you ready to deal with a for sale by owner all the time?

via GIPHY

When it comes to arranging the home inspection or any other viewings of the house, your agent can serve as your go-between so you don’t have to contact the homeowner repeatedly. Unless you’re completely comfortable making all those appointments yourself, you should probably have someone representing your best interests.

6. What’s the timeframe for selling?

via GIPHY

When a seller hires an agent, you know they’re serious about making a deal. With a for sale by owner, are you sure the sellers are really going to get moving? Some may have put the home on the market just to see what offers it could attract. If you’re an interested buyer, you need to know that the seller is just as eager to make a move; otherwise you’re wasting your time and getting your hopes up for nothing.

Of course, there are honest for sale by owners out there, but when it comes to making one of the largest investments of your life, you don’t want to take any chances. Having a real estate agent working on your behalf at every stage of the transaction can offer peace of mind and end up saving you money and countless headaches.

For Sale By Owner Sellers- Some Points to Ponder

For Sale By Owner Sellers- Some Points to Ponder

It’s illuminating to visit For Sale by Owner websites from time to time to see if there are any new insights to be gleaned. True, as a licensed Farmington Hills Realtor®, I’m not likely to learn much new when it comes to selling Farmington Hills homes—but that’s not the motivation. Call it ‘opposition research:’ the reason is to uncover any areas where the services I provide aren’t superior to what a do-it-yourselfer can come up with on their own.For Sale By Owner Sellers- Some Points to Ponder

Here are some takeaways from the For Sale By Owner sites Google recently presented as the most frequently consulted sites. I’ve included my opinion about the pronouncements—either valid or less than valid:

Valid: Valuing your house is an important step toward FSBO success. Absolutely true, if “valuing your house” means incorporating the latest Farmington Hills comparable sales adjusted for the features that make your property unique.

Valid but irrelevant: Your lender will more likely sell your mortgage to another bank, sometimes within the first 72 hours. Although this is sometimes true, it has nothing to do with anything a potential Farmington Hills FSBO owner needs to worry about.

Valid: “This should be no cause for alarm.” The reason why the above pronouncement about mortgage lenders’ procedures is a non-issue.

Less valid: “[name of an online service] is a free tool that instantly estimates your home’s value…”   As has been shown time and again, automated systems (even the top 3 national ones) can come up with wacky valuations—it’s why they ask homeowners for corrections. Compiling a carefully researched, up-to-the-minute comparable presentation is only one part of what you can expect from any licensed Realtor. Both are free.

Less valid: Whether you list your home with an agent…or sell your house on your own, it is going to involve considerable effort on your part. More candid would be pointing out that the considerable marketing, advertising, and negotiating activities in addition to timely compliance with all legal and financial deadlines are parts of the considerable effort that your Farmington Hills agent undertakes for non-FSBO sellers.

Valid: Another pricing [tactic]…is calling a real estate agent for a Comparative Market Analysis…the agent’s point of view could be valuable. I couldn’t agree more!

Farmington Hills FSBO properties are commonly passed up by serious-minded house hunters wishing to avoid non-professionals in such a major transaction. Since those are the prospects sellers should try hardest to attract, that’s one point you never find on any FSBO web site.

In case you’ve been toying with the For Sale by Owner idea, I hope you’ll first give me a call for a no-obligation discussion of your property and goals—and what makes the most sense for you!

 

Pin It on Pinterest