What to watch out for when selling by owner... Dangers of selling "By owner" Always ask your self why a buyer prospect is not working with a Realtor. Yes there are some valid reasons but the vast majority of serious buyers do not have the time or resources to undertake a property search alone. Did you use and agent to buy your house? If you have not found your next house in a few weeks will you use a Realtor? Real Estate Predators: Opening your home to strangers can be dangerous or even fatal. If you wanted to “case” a house for valuables or get a person alone in a private location, what better way to do it then by posing as a home buyer? You are literally invited into someone’s house! Every week the real estate industry’s trade magazines have horrific stories about Realtors that are frightened, injured or killed. Buyers with an agent are supervised and prescreened to reduce the risk. What is your family’s safety worth? Opportunists: These buyers are looking for a deal -- in their favor. If you need to sell immediately and a below market price is OK, then these are your buyers! Infomercial Investors: They want to get rich quick at your expense! What little they know about Real Estate comes from a $39 book and tape set. Warning signs include terms like seller or owner finance, second mortgages, no money down, balloon. These buyers will have bad credit and no cash down. They will not be interested (or eligible) in traditional mortgages and will require owner financing. They often ask for cash from the seller at closing (usually under-the-table and a felony). Deadbeat Buyers: These are the less ambitious cousins to the Infomercial Investor that have given up on get rich quick ambitions. They want to leverage your good will and equity in your home to put a roof over their head. They will argue that they hit a streak of bad luck and only need your help in the form of owner financing for a few years at which time they promise to qualify for their own mortgage and buy you out. AWOL Buyers: They have agent but are not forthcoming about telling you. If you negotiate a price with them there may be a Realtor with a legitimate and legal claim on a commission. You need to verify (preferably in writing) if your buyer prospect has an obligation to and always spell out who would pay a Buyer's agent commission in you sale contract! Fixed Fee Listing Services: You recognize the value of the MLS to find qualified buyers and you have found a service offering a fixed fee to list your property in the MLS. Sounds great until... you realize that buyers from the MLS come with Realtors and you STILL have to compensate them. The fixed fee ONLY pays the listing side, not the buying side, you still have to pay the typically commission to the buyers agent! No do the math, you are getting only a very small savings and NONE of the service to help you sell you home. Alternative Real Estate Companies: These include fixed fee listing services and for sale by owner companies. First we need to realize that most serious and qualified buyers are using a Realtor. The problem is that the non-mainstream brokers and FSBO services are avoided by most traditional Realtors. Fair or not, most Realtors avoid listing with these companies. The perception is that it will be a difficult transaction having to work with the seller directly or a less-then-professional company representative. It is also statistically true that these properties are not properly priced and staged for showing, again making it a difficult transaction.
This information is courtesy of Tom Schroth RE/MAX Communities, Atlanta, GA |
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