Bought a FSBO

Situation:

In early 2000, my wife and I - along with several friends - decided to stop renting, pool our resources, and buy a place together. We initially had an agent helping us, but we quickly figured out that she was steering us to her own listings and not casting a wider net. After touring several houses that clearly failed to meet our needs, we gave up on her and began searching on our own.

What We Did:

We scanned the local newspaper classifieds and started visiting open houses. We didn't really use the Internet much - Craigslist hadn't caught on yet, and if MLS listings were widely available online, we didn't know about it.

One weekend we were out driving around and read a newspaper ad for a FSBO (For Sale by Owner) home that sounded perfect for us - it was big, had great views, and was located in one of our favorite neighborhoods. Even though it was way outside our price range, we wanted to take a look anyway.

It was dark outside when we arrived. We didn't want to bother the owner, so we casually walked around the house to get a feel for it. The owner heard us and came outside, wondering what we were doing wandering his property at night! He was about 6 feet 5 inches tall, had scraggly hair, a long beard, and an overall demeanor that indicated he was - understandably - not very happy with us. Luckily he softened up as soon as he realized we weren't casing his place and invited us inside.

We ended up falling in love with this house because of its wonderful views of the mountains and Puget Sound. The owner was selling it on his own, and both he and his wife were absolutely lovely. We thanked them and said we'd get back to them.

We decided that we just couldn't afford the house. Our upper limit was $475,000 and the owner was asking $519,000. Rather than offend him with a lowball offer, we moved on.

Outcome:

Six weeks later, the house was still on the market. We visited the owner again and told him that we loved his house, but really couldn't afford more than $475,000. He had one other offer at the time - for almost $15,000 more - but because we weren't using a buyer's agent and the other party was, our offer yielded him more. He agreed to our price. (Don't let anyone tell you a buyer's agent is free! We got the home because we weren't using an agent and the other buyer was.)

Finalizing the deal felt surprisingly easy, no doubt because nothing went wrong and because we had gotten to know each other a bit. We bought a Purchase and Sale Agreement at an office supply store, filled it out, agreed on an escrow company, and away we went. We hired an inspector based on a recommendation from some friends, and he didn't find anything significant. The escrow folks were great in terms of coordinating all the documents from our lender, and the closing proceeded without a hitch. The entire process took about three weeks. After the closing, we all went out to dinner together to celebrate.

In hindsight, we probably should have used a real estate attorney because if anything went wrong, we could've risked losing our earnest money.

By 2005, our friends had moved out, one-by-one, and we settled with them financially. At first the home felt too big for just two people, but now that our first child has arrived we're happy to have the extra space!

- Michael D., Seattle