For Sale By Owner Horror Stories

[rmattman]

My wife and I are considering trying to sell our house by owner. We have read The For Sale By Owner Kit by Robert Irwin and have done some on-line research on the subject as well. We've gotten three realtor's opinions as to the potential asking price also. There are relatively few houses (<10) in our price range in our community so there is not that much competition for buyers. The community was recently listed by Money as one of the top ten places to live in the U.S. as well so visibility of the community is currently at a high level.

I would like to hear any particularly bad experiences you've had with FSBO to help us decide if it's worth the hassle just to avoid paying someone > $40,000 in commission. Any stories, comments, advice are appreciated.

Thanks

[tek]

Use a good lawyer and title company, make sure you have no unpaid assessments, have an up-to-date appraisal (if needed), and don't let buyers have too long or have too many loopholes to back out.

[miajag81]

I don't understand why more people don't do this. I just have a big problem with paying a person like $50K to show people my house and then sign a few papers. I swear, realtors (oh, I'm sorry, Realtors) are the biggest scam artists in the world.

[Patrick del Poker Grande]

The only thing I've heard is that some realtors simply won't show people your house if you go the FSBO route or especially if you go with the discount companies. They're looking out for each other. Even if there are only 10 total houses in your category, a lot of people will only know there are 9.

I guess the rest you already probably know - it seems like a huge pain in the ass to handle all the paper/legal work on your own.

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The only thing I've heard is that some realtors simply won't show people your house if you go the FSBO route or especially if you go with the discount companies. They're looking out for each other.

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They are looking out for themselves. Realtors show other houses because they have a agreement that they will get a certain percent of the commission if they bring the buyer to the deal. If the commission on a sale is say 6%, the buyer's realtor might get 2.5%. If an owner is not offering any commission, there is no reason for a realtor to show the house, unless he has an agreement with the buyer to pay him in such a situation.

When I sold my house, I used a flat-rate realtor. They did not list in the MLS, so there were no other realtor interest. But they ran full page color ads in the Sunday paper, and the agents referred buyers to each other. I did all the showings and open-houses, using the signs they provided. They handled all the paperwork, which is a major pain. The whole thing cost me a little over $2000.

[turnipmonster]

why would a realtor show a house they weren't selling?

[Shajen]

[ QUOTE ]
why would a realtor show a house they weren't selling?

[/ QUOTE ]

because they have buyers interested in buying. They still get a commision off of that.

[4_2_it]

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I guess the rest you already probably know - it seems like a huge pain in the ass to handle all the paper/legal work on your own.

[/ QUOTE ]

The paperwork isn't bad. Just hire a lawyer for about $1,500 to handle the closing (much cheaper than 7% commission).

OP - Your biggest issue is competing with houses listed with realtors in the Mulit-Listing database. Just make sure you post your home in the local newspapers and on the Buy Owner website. Have an Open House on a couple of weekends. Signs and balloons are good. Make sure your yard is nicely landscaped as the first impression from the street is key. Also, bake cookies during the open house. Everyone loves to smell home baked cookies and it makes a positive impression (I have seen this tactic used at model homes for a while and home builders would not do it if it wasn't profitable).

Also, beware of realtors trying to come in for a half-commission to bring you buyers. If you live in a hot area, you are in good shape.

[4_2_it]

[ QUOTE ]
[ QUOTE ]
why would a realtor show a house they weren't selling?

[/ QUOTE ]

because they have buyers interested in buying. They still get a commision off of that.

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They only get a commission if the seller (or buyer) agrees to it. Most buyers will not paid a commission on top of the home purchase price and if you are selling Buy Owner, why would you agree to pay the commission that you were trying to avoid in the first place?

[BoogerFace]

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I guess the rest you already probably know - it seems like a huge pain in the ass to handle all the paper/legal work on your own.

[/ QUOTE ]

I think it's even worse then that. Houses don't sell themselves - it takes a lot of handholding/ass-smootching to close the deal.