Profile picture for user1085582

Home For Sale By Owner

saw a house we really liked, but it's for sale by owner. Our agent seemed to be against Owner For Sale houses though. Made it sound like we have less protection?

Any suggestion on these types of sales? The neighborhood was amazing, so it's on the top of our list.

  • September 03 2013 - Oakdale
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Answers (12)

I agree, Jacob 35, and it's usually not like that. What's more common is that the agent isn't going to get paid for selling a FSBO, either because they haven't worked out a commission agreement with their buyer or the seller refuses to pay one.

SS, banks really don't do "reliable" appraisals; the refinancing boom leading to the run up helped demonstrate that.

Appraisers have a tough job. The reason a bank wants an appraisal isn't because they believe that a third party can determine value better than a willing buyer or seller, but because they have to justify that the value is in the collateral and that the buyer and seller are not committing fraud. But appraisers are almost never in the houses that they use for comparables, which makes it pretty difficult to make accurate adjustments.
  • April 30
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Profile picture for SteadyState
If I were you I would seize the moment and tell the home owner that you will pay appraised value for the property.
The appraised value is the total amount that any lender will loan you money for a mortgage. Say the appraised value of the home is $1M (Banks do reliable appraisals - get your bank to do the appraisal).

1. If the owner sells you the home with agents he will have to pay the agents roughly 6% (i.e., $60K - so he gets to keep on $940K from which other closing costs will be subtracted.)
2. If the owner sells a home to someone else for above appraisal (say $60K above appraisal)  - the buyer needs to come up with the $60K above the typical 20% down payment - buyer has to put $200K + 60K = $260K to buy the property). But you only get $1M - which is what the seller will get from you without agents.
3. If the agents sells the home for greater than 10% appraised value - then it is a sellers market and the seller should go with the agents. However, tell the seller to sign a 30 day contract and put your name on the contract as a existing potential buyer for which the listing agents will not be paid any commissions. This way if the home does not sell in 30 days, the owner can sell you the home.
In general the title company will make sure all documents are legally sound. However, if you need additional protection get a Real Estate  attorney to review the paperwork - this can be done for a few hundred dollars.
Please do not be intimidated  or scarred by the agents propaganda that you are less protected when you go without agents. Not true - though there are times when you need RE agents, this is not the time in my estimation.

 
  • April 30
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Profile picture for Jacob35
I am selling my home myself.  I am not a realtor.  A few things were not mentioned in these statements.  One of the most important reasons FSBO works well is;  I can sell my home far less because there is not a commission to pay by me OR the buyer.  The market will bear what the market will bear.  FSBO still have to follow the same laws, disclosures, pest/home inspections, title search, etc. I also have purchased a home FSBO and it went quite well because I actually talked to the owner of the property.  They told me about the neighbors, the area, even gave me some history about the community and how involved they were in their community. 

Basically, there will be trustworthy people as agents and the same with FSBO.  Also, the opposite might apply.  But don't not look at a home that's FSBO just because your agent tells you not to.  That's not right on the realtors end.
  • April 30
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The agent should explain why is there less protection especially if it is a property you like have your agent work a agreement out with the owner that benefits both party's and the agent. fsbo like to avoid paying agent fees but personally I would not do a transaction without a Realtor unless you have really good experience in contracts and how real estates transactions take place because time is a factor and in a fsbo you don't have the agent or agents managing the sale.
  • April 30
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Profile picture for ScottBROKER209
I would talk to your agent further about the property you are interested in.  if the agent has not yet investigated the property for you, you may decide to knock on the for-sale-by-owners door yourself to get information. 

no harm in looking on your own...as the for-sale-by-owner (FSBO) has only one home to sell, they may be helpful.  Just beware of a transaction without the use of California real estate disclosures and the guidance of a professional realtor.

FSBO's chose not to list with real estate firms for several reasons (typically), here are a few of them:

1. They have the knowledge to do it themselves
2. They want to try and save money
3. They have not met a real estate agent they like...yet!
4. They did not like the value an agent suggested...and they want more!

Most experienced agents are aware of the FSBO's in the area and have already talked to the seller and/or toured their home...so if your current agent is not comfortable approaching the FSBO, there are many other agents who are!

me being one of them!

Good luck!
  • December 26 2013
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Your agent should show you any property that you are interested in, it is his/her duty as an agent. In terms of why they may be resistant on a FSBO, it is typically more work as they are representing you and now most likely have to do quite a bit of coaching with the owner on processes. Also, FSBOs often are reluctant to pay any agent fees.
  • September 10 2013
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Profile picture for AndOrNot
Blanket false information given by this 'said' agent should be a sign to dump them at the curb.   Also this malarkey about "more work" is more agents blanketly speaking out their back sides.  Seller disclosures are mandated by State Law - not some two bit Realtor that happens to be in a fall back career as a result of their inability to hack college level math. 
  • September 10 2013
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The reason your agent is showing trepidation is that it is not unusual that FSBO's (for sale by owners) do NOT pay agents representing buyers.

It also usually means the buyer's agent does more work for the same pay.

The protection aspect is valid, and inspections and reports are vital to ensuring you get a property in safe and solid condition.
  • September 03 2013
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I grew up on oakdale, awesome street!  Near Sheffield.  FSBO no biggie. definitely more work but nothing worth while is easy.  Your agent should write an offer including the standard 2.5 % comisson that the seller will pay.  If the seller doesnt cooperate then you have an issue to solve. Your agent works for you and should definitely write up an offer if thats what you want!
  • September 03 2013
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Profile picture for user66558506

My buyer bought a house from a for sale by owner, I contacted the owner by knocking on their door. Told the owner I had a qualified buyer & explained the benefits of working with a Realtor. Yes it was more work for me, my buyer was protected the sell was in California. So if you really want to see the house have your agent contact the seller you'd be surprised how many FSBO'S are open to agents. FSBO'S find out quickly that it's harder than they thought to find a qualified buyer. Hope this helps & you get to see the house

  • September 03 2013
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It's a bit of a buyer's market right now.. Seller may be willing to help out in some wonderful ways if given the chance.
  • September 03 2013
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Profile picture for wetdawgs
 Some agents avoid FSBOs for many reasons and dis FSBOs, including commission, having to do both sides of the deal, seller not knowing about disclosures etc.  However, if you have a great agent they will show you the houses you wish.   Make sure you make it clear with your agent that if the seller is not willing to pay commission, you will be happy to do so.

  • September 03 2013
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