Buying from a ‘For Sale By Owner’ May Be Hazardous
to Your Health
Many circumstances may lead homeowners to try and sell their houses by
themselves, without agent representation. Maybe the seller finds
himself strapped for cash, and needs to save on the commission.
Perhaps he has a relative or friend who successfully sold his home and
who tells the seller, "There’s nothing to it!" Most likely, the seller
can’t see turning all that commission money over to an agent who ‘just
sticks a sign in the yard’, and ‘puts an ad in the paper’!
For Sale By Owners, more commonly known as "FSBOs," invariably
under-estimate the amount of time, work, and skill necessary to
successfully negotiate and coordinate a real estate transaction from
start to finish. A large number of people who start out as "FSBOs" do
eventually end up listing their homes with a real estate agency, but
not without first experiencing a good deal of frustration,
disappointment, and inconvenience.
Having said all that, the potential rewards awaiting homeowners are
high enough to insure that the "FSBO" will be around for a long, long
time. However, with the advent of the Accredited Buyer’s
Representative, (an agent who solely represents the buyer during the
entire real estate transaction), the idea of BUYING a home directly
from a FSBO, without an agent, could now be a foolish, and costly,
mistake.
Buyers would do well to opt for a Buyer’s Representative relationship
when purchasing ANY property, but most especially when dealing with a
FSBO. Here’s why:
Negotiating Power. Because a Buyer’s Representative works ONLY
for the buyer, having such an agent by your side during negotiations
can save you thousands of dollars. Your agent will be armed with ALL
the relevant comparable sales (not just the really favorable ones that
the seller may provide for you), as well as any other financial
information you may need. For instance, your agent can arrange for you
to be pre-qualified by a mortgage company. This, alone, makes you much
more desirable to a FSBO and greatly increases your negotiating
position. Since FSBOs, by definition, do NOT have agents representing
them, the use of a Buyer’s Representative gives you a tremendous
advantage at a serious and financially important moment in your life!
Protection. Even if the seller is the most honest, most
forthright person on the face of the earth - he or she may still fail
to disclose something important, or inadvertently discriminate --
through ignorance. The old saying goes: If you shoot me, and I’m dead,
it doesn’t matter if you meant to do it!" A Buyer’s Representative, as
a trained professional who knows the area, protects your interests. For
example, would you be happy to discover, one month after settlement,
that a purposed highway is to be built in your backyard, and the seller
hadn’t received a formal notice, so he hadn’t disclosed it to you? A
good Buyer’s Agent could uncover this fact BEFORE you buy.
Objective, Professional Opinion. Primarily, you come across a
FSBO by riding around and seeing a sign on the lawn. The house looks
good; you get out of the car and knock on the door. The people are
nice, the home is great, and, before you know it, you are mentally
placing your furniture in the living room, and you are totally,
emotionally involved. While loving your potential ‘new home’ is a good
thing, the addition of a more objective, professional opinion is
certainly a valuable asset. Your agent can either reinforce your
emotional decision, or bring you back to reality, depending upon the
facts. Either way, you’re a winner.
Experience, Expertise, Information. A Buyer’s Representative can
fill in all the gaps, and answer all the questions you have. Your agent
can provide you with information on the school district, the
neighborhood demographics, the cost of living, shopping,
transportation, job opportunities, and much more. Through today’s
technology and the Internet, as well as your agent’s intimate knowledge
of the selling area, you can cross the threshold of your new home for
the first time without feeling like "the new kid on the block"!
Cost you no more to Utilize a Buyer’s Representative. In many
instances, FSBOs have already "built in" an agent’s commission when
pricing their homes, and will gladly accept a written offer from you
that contains provisions for them to pay your Buyer’s Agent’s fee. This
is not unlike "new construction". When you walk into a sample home, do
you see two different price sheets: one for those who are alone; a
higher price sheet for those accompanied by a real estate agent? Of
course not. If the builder is "lucky" enough to have you walk in by
yourself, then he/she keeps the portion of the commission that was
earmarked for the Buyer’s Representative, he does not rebate it to you!
The same holds true for the majority of FSBOs. While they are looking
for as much money from the sale of their homes as possible, they also
realize (or, at least, the rationale ones do) that many buyers will be
uncomfortable without representation, and they - like builders - plan
accordingly.
