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For Sale by Owner...Are all your bases covered?

By
Real Estate Broker/Owner with WHISPERING PINES REALTY 20398180

I see it often and I hear every now and again...

A FSBO that gets sued because they don't understand the law of disclosure.

Minnesota is a full disclosure state.  It does not matter if you sell on your own or not, you MUST disclose.  (There are other options, but they don't let you out of the full disclosure.)

I called  a FSBO for a client of mine this week.  I asked the Seller for disclosures. 

"I don't have any...I am sell AS-IS."

I explained that the law states otherwise. 

"Aww, that is just a bunch of Bull."

So, I explained the scam that I have seen where the seller does not give disclosures...the Buyer fixes the home and then takes the seller to court for not disclosing.  The Seller loses every time!   The cost to most sellers is more than double the commission amount.

If you are going to sell on your own...KNOW THE LAW.  Or you could end up seeing a judge in court!


Comments (31)

Wayne Zuhl
Remax First Realty II - Cranford, NJ
The Last Name You'll Ever Need in Real Estate

Good morning William - the FSBOs that you've called are lucky that you let them in on a risky and expensive mistake!

Jul 25, 2012 10:50 PM
Vern Eaton
Askov, MN
Realtor 651-674-7449

I have also heard of this scam.  The one I heard of cost the seller in court over $30,000.   My contact on this said they are sure the BUYER knew exactly what he was doing when he bought knowing the avenue to take.

Jul 25, 2012 11:10 PM
Chris and Dick Dovorany
Homes for Sale in Naples, Bonita Springs and Estero, Florida - Naples, FL
Broker/Associate at Premiere Plus Realty

I had no idea.  I thought a FSBO was the same as selling a piece of exercise equipment on CraigsList.  I will definately check on the laws in Florida.  This could help many agents get rid of FSBO's.  Thanks

Jul 25, 2012 11:11 PM
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

I agree that this is a big thing with FSBO in MN. They dont disclose and could get caught in a mess like you say.

Jul 25, 2012 11:22 PM
Tammie White, Broker
Franklin Homes Realty LLC - Franklin, TN
Franklin TN Homes for Sale

There are so many things sellers don't think about. I recently sold a home that was previously listed as a FSBO. They showied it as a 5 bedroom (they had converted a loft to a bedroom). However, the house was on a septic system that was only perked for 4 bedrooms. They didn't even realize they needed to supply a copy of the septic letter to buyers. Who wants a lawsuit? Better to get the expert's advice and not risk it.

Jul 25, 2012 11:37 PM
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

I can see where one would have the frame of mind that accompanies the thought of doing and not doing something when they do it themselves...It is easy to believe that the law doesn't apply to you the layman, but it is not wise to do so

Jul 26, 2012 12:44 AM
Melissa Marro
Keller Williams First Coast Realty - The Marro Team - Orange Park, FL
Jacksonville Real Estate and Home Staging

Good blog. Its just another reason why selling on your own isn't usually a good idea.

 

Jul 26, 2012 12:49 AM
Amanda Christiansen
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty

Another great reason to NOT sell FSBO.  There are too many things that can go wrong that the average seller just doesn't know about, or in this case, they don't get it or care to get it.  Good post!  

Jul 26, 2012 01:24 AM
Wanda Kubat-Nerdin - Wanda Can!
Red Rock Real Estate (435) 632-9374 - St. George, UT
St. George Utah Area Residential Sales Agent

Hear, hear Bill! It is Buyer Beware if a seller refuses to fully disclose! Congrats on the feature!

Jul 26, 2012 02:49 AM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

It's true buyers will win in court if material defects weren't disclosed. Having an agent with experience represent a seller is a must in these times. Why go it alone to save a few dollars? Not knowing what the laws are is no excuse. Excellent post,

Jul 26, 2012 02:55 AM
Adam Brett
The Adam and Eric Group - Fullerton, CA
The Adam and Eric Group, Fullerton's Finest

Good post, I have a few friends who definitely need to read this one...

Jul 26, 2012 03:08 AM
Sandy Acevedo
951-290-8588 - Chino Hills, CA
RE/MAX Masters, Inland Empire Homes for Sale

Hi William, ignorance of the law is no excuse. They will have to pay up. And it is much better to have a Realtor watching your back.

Jul 26, 2012 03:43 AM
Randi Brammer
Randi Brammer, Acctg. - Hinckley, MN
Accountant & Tax Preparer

Bill, there is a reason agents have so much paperwork. It isn't for the health.

Jul 26, 2012 04:26 AM
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Hire a Realtor®.... Preach it William!

Jul 26, 2012 06:57 AM
Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate
I certainly defend a homeowner's right to sell their house without a Realtor. That being said though, that right to sell your home on your own also carries with it a pretty hefty responsibility as well.
Jul 26, 2012 06:58 AM
Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents

Bill: this is some good Info for all,keep up the good work and and good luck with your business,  E

Jul 26, 2012 07:09 AM
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Laws are different in every state.  Scammers know how to use the law in this case.

Jul 26, 2012 07:25 AM
Brad Rachielles
CENTURY 21 Peak, Ca BRE# 01489453 - Upland, CA
REALTOR, CDPE, Upland, CA

One might think that it is the buyer who should be ware when the seller doesn't disclose.... and that may be true. BUT, it may also be true that the SELLER should be ware of the risks that s/he is inviting when they do not disclose. A commission may be cheap assurance for avoiding problems.

Jul 26, 2012 07:53 AM
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

William, another example of why it would be a good idea to use a real estate agent to sell your home and not go it yourself.

Jul 26, 2012 09:39 AM
Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

I am so glad you were featured for this.  I have heard it over and over again.  And, I, too, live in Minnesota where the law doesn't allow "AS-IS" selling except for bank-owneds.

Jul 30, 2012 06:57 AM