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Why I Told My Buyer To Cancel The Contract To A For Sale By Owner

By
Managing Real Estate Broker with Lakeland Real Estate Group, Inc. BK646565

Why I Told My Buyer To Cancel The Contract To A For Sale By Owner 

For Sale By Owner - Lakeland FLWhen I tour homes for home buyers I don't shy away when approaching For Sale By Owners.  Recently, I approached a for sale by owner, since my buyer had in interest in their home.  I arranged for an appointment and toured the home via Skype with my buyers.  The home was very nice and had all the bells and whistles my buyers where looking for.  The sellers were set on a price which included all the appliances, most of the furniture, spa, golf cart etc. and other miscellanous items.  My buyers were so excited and told me to write up an offer right away for the price the sellers are asking for, fearing someone else will make an offer.

I wrote up the cash offer and included an appraisal contingency that the home must appraise at $X amount.  After I present it to the homeowner I did some further investigation into the homes' market values of comparable homes within the community.  The next day, the homeowner called and said that they did not like the appraisal contingency and that he is countering the appraisal contingency to a lower appraised value and that I should offset the difference into the content of the home - lowering the appraisal amount, increasing the amount for the contents= sellers asking price.

After I talked with my buyers of the sellers counter, I asked the buyers to cancel their offer because the home is heavily overpriced and it would not appraise.

Which raises the question, why a Lakeland FL Home For Sale By Owner is a Bad Idea

Is a Lakeland Fl home for sale by owner a bad idea? The answer is – YES!

Selling your home as For Sale By Owner may cost you more than hiring a real estate agent.

Most people think that DIY projects and tasks saves them money, but this is not always the case. Some DIY projects tend to end up a disaster, which costs more money to fix as well as more time to redo, not to mention the frustration it causes.

That is why there are professionals who are good at what they do, their role is to make things easier and faster.

This is true in real estate. If you plan to put your Lakeland Fl home for sale, make sure you work with an experienced Lakeland Florida real estate agent. Real estate transactions are complicated and it takes a lot of experience and knowledge about the market, neighborhood, marketing, pricing, negotiating, and staging to successfully close a deal.

Here are some reasons why selling your Lakeland Fl home for sale by yourself is a bad idea:

1. FSBO sellers usually price their Lakeland FL Homes for Sale too high. Sellers often consider how much they still owe and work on a price from there. However, buyers don’t care how much the seller owes. Buyers compare values of Lakeland FL Homes for Sale to other similar homes in the neighborhood. Listing a home for more than the price of comparable sales is a very big risk. Most of the time, overpriced homes get few or no showings at all. Once a Lakeland Fl home for sale stays on the market for too long, it becomes stale and buyers and their agents will be negotiating for price reductions, capitalizing on the seller’s frustration to sell.

2. Since they lack skills and knowledge in real estate, most FSBO homeowners fail to understand many aspects of the home selling process. hiring a seasoned Lakeland FL Real Estate agent will give you an assurance that someone will always be there to answer your questions about selling your Lakeland Fl home. Real estate documents and contracts are getting more and more complicated these days, and if you attempt to do it by yourself, you put yourself at risk of making big and costly mistakes.

 

Selling a home in Lakeland Fl is a very big decision with a huge impact on the seller and his or her family. Even if you hire a Lakeland Fl agent, make sure you are still educated and aware of the process of selling a home. Working with an experienced Lakeland Fl real estate agent not only saves you time and money, but also gives you peace of mind as you proceed with the sale of your Lakeland Fl home.

Comments(124)

Alyse "Aly" Sands
AGORA Realty - Nashville, TN
It's Good To Be Home

Excellent post, Petra!  There is a reason for professionals and this is just proof that FSBOs are not professionals.  Why should any buyer pay more than a property will appraise for?  Some sellers can be greedy.

In addition to your comment on professionals:  I want to also state the importance of all contractors being licensed and insured!

Sep 26, 2013 08:09 AM
Nora Sims
Northern Shadows Realty, Inc. - Sedona, AZ
helping folks like you since 1978!

Diana Allen and I are on the same page on this posting...

In Arizona, buyers have a limited time period in which they must do their due diligence (home inspections, termite, whatever) before their earnest money becomes forfeitable... usually these expenses, along with the expense of the appraisal are paid for by the Buyer out of the Buyer's pocket. Combined these expenses could easily total over $1000.

Even with the appraisal contingency on the contract, I would want to be reasonably sure that the home is going to appraise before asking the Buyer to spend money un necessarily, and putting everybody through an exercise in futility.

 

Sep 26, 2013 08:54 AM
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

In a hot market, some buyers don't care what they pay if they want a house. A similar situation happened to me this year--buyers found a fsbo, loved it, was overpriced but they paid it anyway.  It did appraise as it wasn't too much overpriced. Some buyers--they get impatient, won't wait.

Sep 26, 2013 10:23 AM
Kathy Dowd
EXP Realty, 239 220 4133 - The Villages, FL
Consider it SOLD

I have notice most FSBO are over priced and don't want to pay a commission...Great Post!

Sep 26, 2013 10:31 AM
Dagny Eason
Dagny's Real Estate - Wilton, CT
Fairfield County CT, CDPE Homes For Sale and Condo

We don't have many for sale by owners here yet, but I'm sure they will return soon!

Sep 26, 2013 11:26 AM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Petra,

Selling without representation is not impossible, but not as easy as it looks. Same for electrical, plumbing & other home improvement projects. Sometimes, it pays to hire a professional.

Sep 26, 2013 01:45 PM
Conor MacEvilly
RE/MAX On Market in Ballard. Seattle - Seattle, WA

Always better to do a market analysis of a home's market value before making an offer no matter how excited / motivated the buyer is. Way overpaying for a home, even in a hot market, is not worth it.

Sep 27, 2013 12:26 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I think that is one seller who is penny wise and pound foolish.  They had a cash offer they let go.  No one else will pay what they want either.

Sep 27, 2013 03:38 AM
Troy Erickson AZ Realtor (602) 295-6807
HomeSmart - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Typically a FSBO is a FSBO because the seller is wanting to make more money on the sale of their home by eliminating the real estate agent commission.  It's obvious that they also may have their home listed for a higher price for the very same reason - more money for the seller when the home closes.  It would be real obvious to any real estate agent when a FSBO is overpriced, by looking at comps.

Sep 27, 2013 07:50 AM
Brad MacKenzie
Brad MacKenzie - Duxbury, MA
Turning Houses into Homes on the South Shore

You're absolutely right about FSBOs. Same with many owners in a lot of ways, unfortunately.

Sep 27, 2013 01:18 PM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

FSBO have their challenges, just like our Sellers and Buyers.

Sep 30, 2013 01:25 PM
CA COASTAL ESTATES Lauren Selinsky Perez CRS
California Coastal Estates - Aliso Viejo, CA
"Your Real Estate Broker" #oclauren
We always have items sold separate to contract.
Sep 30, 2013 01:32 PM
Deleted Account
Fort Myers, FL

Great Post!  I almost took a listing for a home the was a FSBO, but turned it down, as it was drastically overpriced. He continued to try to sell it at that price as a FSBO and is still trying after a year!

Oct 01, 2013 09:31 AM
Lynn B. Friedman CRS Atlanta, GA 404-617-6375
Atlanta Homes ODAT Realty - Love our Great City - Love our Clients! Buckhead - Midtown - Westside - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

FSBO may mean FOR SALE BUT OVERPRICED not for Sale by Owner! The comments cover all aspects of the issue - Thanks to Petra for posting!
Have a happy day -
Lynn

Oct 01, 2013 05:03 PM
Graziella Bruner
NCS Premier Real Estate - Detroit, MI
Associate Broker - Serving Wayne & Oakland County

Great Post and great comments - Why someone would pay overprice for anything is beyond me!  I believe you did what was right for your client. 

Oct 01, 2013 11:56 PM
Anthony Rollins
Keller Williams Realty-Overland Park - Overland Park, KS
The Adam Butler Team

Petra,

 

You make some good points here.  In the end, EVERY FSBO, including real estate agents themselves, are looking to save the commission by selling it themselves.  Because most sellers do back themselves into a price based on what they want and not the market itself, their asking prices are often skewed.  I like reminding FSBO's that one of the advantages of hiring a professional real estate agent is that you get E & O coverage should something go wrong post close of escrow.  Without this, they are left on their own should the buyer decide to come after them for anything.

Cheers!

Oct 02, 2013 05:41 AM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

FSBOs in all areas Petra representing themselves have a very high dose of not knowing what they are doing. Mixing personal property with real estate property is a disaster with pricing. Great post.

Oct 08, 2013 01:59 AM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Petra, I always do a quick market analysis for my buyers before they make and offer.  I think it's probably the most important part of a buyer broker's job.

Oct 08, 2013 07:17 AM
Deleted Account
Fort Myers, FL

I agree with Patricia, I always do a CMA for my client before they make an offer.

Oct 08, 2013 07:24 AM
Ric Mills
Keller Williams Southern Az - Tucson, AZ
Integrity, Honesty, and Vast Real Estate Knowledge

It is rare to see a FSBO that is priced on the market. This scenerio is why I never have personal property on the RE contract.  That is a cloud that can only lead to problems.  The personal property can be settled on a Bill Of Sale and that way the RE is it's own entity.  Rarely are peopl selling personal property for what it is really worth and it needs to be kept out of a RE contract.  Maybe that would make the contract price more real for the appraisal?

Oct 08, 2013 07:42 AM