Unrepresented Sellers aka FSBO's (For Sale By Owner) most of the time will have no clue on where to properly price their home for the market they are in.

I recently found an Unrepresented Seller's home that the comparables for it in quality, location, and features had the home at around $250,000.  Would it shock anyone to know the asking price was well over $300,000?

The Unrepresented Seller's improper price, based on market statistics of what home buyers have paid for a similar home means that the home will sit on the market and not sell.  During that time the property becomes stigmatized as a FSBO.

There is something about FSBO's that make home buyers think that they can save the real estate commission by buying a FSBO AND that they can offer a lot less for the home because there is no real estate commission involved.

In reality, there usually is some type of fee already built in to the price to allow for a Realtor to bring a buyer to the Unrepresented Seller.  However, the improper price of the home is almost never based upon what other comparable homes have SOLD for but are usually based on 1) What the Unrepresented Seller believes he needs to get out of the home to pay off the mortgage and home equity loan plus make a nice profit, or 2) What the Unrepresented Seller needs to buy hi new home.  NOTE: Quite often the Unrepresented Seller has a home equity loan that was used for some purpose other than the home such as to buy a home or pay off credit card bills so when they say they owe too much on the home to sell it for the lower price, you need a Realtor to help identify whether the home equity loan was used on the home or for some other purpose.

The problem is that neither of these methods for pricing have anything to do with what a home buyer will pay for a home.  A home buyer will almost always have the counsel of a Realtor to receive advice on what a good and fair price is to pay for a property.

Improperly priced homes are used all the time to help sell another home to buyers.  A home buyer who sees several $300,000 homes and then sees one that is improperly priced will say right away that "This is not a $300,000 plus home!"  Therefore the improperly priced FSBO home stays on the market for a long time and becomes stigmatized as over-priced and when the Unrepresented Sellers finally come around to the realization that they need a Realtor to sell their home, as over 90% of Unrepresented Sellers eventually discover, it is too late.  The home usually sells at a lower price than it would have SOLD at had the seller been represented.

So home buyers beware about going to those Unrepresented Sellers' homes.  While you may be able to get a good deal, chances are you won't, and you will still need to hire an attorney to be protected legally when writing up a contract.  Seek a professional Realtor who will look out for your best interests and who has attorneys who have looked over contracts that will protect you.

Thanks and "Don't keep me a secret--I'm never too busy for your referrals!"
Rob (FREE 2-10 Home Warranty with every home you buy or sell through me!!)
Rob Lang, CRS, ABR, ePro, GRI Realtor®
Rob's Blog at www.ActiveRain.com/blogs/langrob
Realty Executives, Hedges Real Estate (four convenient locations)
(Serving Lawrence, Eudora, Baldwin, Topeka, Tonganoxie, Leavenworth, Kansas City, McLouth, Wellsville, Ottawa, Berryton, Tecumseh, more)
112 E. 10th, Eudora, KS  66025 
1037 Vermont, Lawrence, KS  66044
3300 Clinton Parkway Ct., Lawrence, KS  66044
300 Rockfence Place, Lawrence, KS  66049
785-393-2274 (cell)   206-339-3199 (fax)
Voice Messages may be left Toll Free at 866-800-5353
langrob@sunflower.com
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