"How to approach a for sale by owner Brought to"
How to approach a for sale by owner Brought to you by Thane Belnap Why-real-estate.com Introduction For sale by owners are the most over approached and under valued sales tool you have. FSBOs are being contacted by real estate agent trying to get them to list with them and by inexperienced real estate investors. What sets you apart, why do they want your business and why are you different. If you can answer that the will eat out of your hand. Table of contents Chapter 1 FSBO Chapter 2 Do your due diligence FSBO The main thing to remember about for sale by owner FSBO is that all sellers want to make the most profit they can from selling their home. FSBO sellers figure they can save money by not paying a commission to an agent. Contrary to what many buyers believe, however, this doesn’t mean the seller wants to pass any of those savings on to you. In fact many agents will not show homes from unrepresented sellers unless they are pushed by a buyer. So these homes may have a smaller pool of potential buyers, this means you may be able to buy the home a little cheaper. This is certainly the case with a seller who, for whatever reason, doesn’t have much equity in the home; he doesn’t feel he can afford to pay the agent’s commission, much less give you a break on the sale price. If the housing market is slow in your area, even a FSBO seller should be willing to negotiate. With a set of comps in hand, you should feel comfortable making an offer that might be well below the asking price. Or you might find the seller has accounted for the market and is just interested in a quick solid sale at a price fair to all. The FSBO seller is often fully aware that buyers expect to save money by avoiding the high agent fee. And as long as both parties benefit, there is little reason the pay the 5%-7% that agents seek. Do your due diligence As a buyer you need to do all the same things you would if the house were being sold through a real estate agent: You still need to know if the asking price is fair (get comps!). You still want a professional home inspection and appraisal. You need to be aware of all of your state's required disclosures and legal paperwork needed to close the deal. You don't want to be stuck with a legal nightmare. Sellers who are not using a real estate agent may be doing so for reasons of saving money often for both parties. The seller may have been told that he needed to bring the home up to code, or to make sufficient repairs to bring it up to an acceptable standard to put on the market. The seller may have decided to sell the home and save the money. Disclosure and fair housing laws have exemptions for sellers working without an agent representing them. The seller may be deliberately avoiding compliance laws to hide a defect or problem. It’s possible the seller had a bad experiences with real estate agents in the past and wants to avoid them altogether. Whatever the reason, the FSBO seller always want a quick sale. Now What So you’ve been surfing the FSBO sites online and have found one or two homes that look interesting, or you’ve seen some while driving around your desired neighborhood. If you’ve signed a contract with an agent, let your agent initiate contact with the seller and get all the usual information about the home. If not, you can approach the seller yourself. Here are some good questions to ask the home owner. How long has the home been for sale? Was it listed with an agent or agents before the seller took over and, if so, for how long? Why does the seller believe the house has not sold (especially if he’s been trying to sell the home for a year or longer)? If he’s blaming lazy real estate agents, you may want to look at the house with an eagle eye before making an offer. How much is owed on the mortgage. This can be a sensitive question but it will help you know if you offer will work at all. Why they want to sell. Some time this seams obvious but asking lets them sell you on their hot buttons or their motivation. DISCLAIMER AND/OR LEGAL NOTICES: The information presented herein represents the view of the authors as of the date of publication. Because of the rate with which conditions change, the authors reserve the right to alter and update their opinion based on the new conditions. The report is for informational purposes only. While every attempt has been made to verify the information provided in this report, neither the authors nor their affiliates/partners assume any responsibility for errors, inaccuracies or omissions. Any slights of people or organizations are unintentional. If advice concerning legal or related matters is needed, the services of a fully qualified professional should be sought. This report is not intended as for use as a source of legal or accounting advice. You should be aware of any laws which govern business transactions or other business practices in your country and state. Any reference to any person or business whether living or dead is purely coincidental