FSBO (For Sale By Owner)

By Nancy Canfield

Ever think about buying your home from an owner, a FSBO (For Sale By Owner)? It may seem that you will save money by not including a Realtor, but what might it cost you downstream? For instance, how will you know what the current market value of the house is? Appraisers use the 3 most recent months of sales. They may have to go outside the neighborhood for a comparable community to gather enough data. Do you consider Zillow Zestimate, or similar free site accurate? Keep in mind, they themselves own up to a low percentage of accuracy. Why? Because they don’t go to see the house, whether it’s right on the freeway, dilapidated, in a battle zone according to the police. Original roof and inside, no upgrades? Also, they don’t distinguish between a 55+ community, which is typically discounted because it restricts who can live there. If there is going to be money to be saved, who do you think is going to get it, you or the seller?

I went into a FSBO open house this weekend and the seller says she has escrow all lined up, for a fee. Do you know that escrow’s job is simply to ensure that the elements of the contract are met before the exchange of grant deed for payment? Not whether the legal disclosures have been executed or if anything has been omitted. Not if inspections have been done. Only whether there is a piece of paper to comply with the contract. Speaking of inspections, on a recent one, my inspector wondered why the kitchen lights and refrigerator were not powered. He went to the power panel and found the circuit breaker flipped, so he flipped it back, and the lights worked temporarily. But he wondered why it flipped in the first place, so he took the face of the panel off and found a bundle of wires blackened, and the holder for them melted. The wiring immediately had to be replaced by a licensed electrician – not somebody’s husband.

Recently, other clients were a few days away from closing when a lien on the Title Report we required, led to the revelation that the garage had been used as a meth lab last spring. The sheriffs condemned the house, it was shut down by the police, and required a specialized cleanup and subsequent certification that the home was Meth free before habitation. After spending 5 days following up with the sheriff’s office, the Hazardous Material Cleaning Service, and all the leads that led from our exploration, my buyers decided they could not let their daughter and grandchild live there. Nor were they willing to take the chance that the house would resell in a few years, at current market value. And how did we learn about this just five days before closing? A “cloud” or issue appeared on the Preliminary Title Report, just a few sentences that led to our investigation. Would you be getting that, and interpreting it correctly before you closed escrow? Or would you be told, erroneously, that it’s a fine that will be paid in escrow and that’s the end of it?

Coincidentally, at the same time, I have a condo with a “cloud.” The seller’s had taken the home out of the trust to refinance, and the husband died before they put it back. The court wanted to go through Probate, but the sellers hired a lawyer and fought it, so we were delayed by three weeks, not several months. Thankfully, this is not a FSBO, and the agent is doing all he can, but my clients have to get out of a rental by the end of this month, so they made an offer, and are moving in as a lease while we’re waiting to close escrow. Don’t think that doesn’t require a lot of scrutiny on the part of both agents for the buyers and the widowed seller.

Every day, I wear my Realtor badge with my name, Nancy Canfield, and company name, Windermere, on it. My car has the same info on both sides. I do this so people know I’m a Realtor, and can run away if they feel I’m going to start trying to engage them in conversation about buying or selling their home, which I never do. When I first got into Real Estate over a decade ago, I read a book called Attracting Perfect Customers. and it had a lot of good info but, the advice I liked best was,

Be the lighthouse, shine the brightest, and the boats will come to you.

You shine the brightest by constant self-improvement. Our company, Windermere, offers weekly classes, training, expert resources for one-on-one help like Marketing, access to statistics that they pay for and not generally available, legal updates, so we are prepared when someone asks, “How’s the Market.”

www.NancyCanfield.com

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