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Buying a home by owner (fsbo) isn't all that its cracked up to be! Strategy 4

One of the misconceptions people have is that if they buy a home without a realtor, they will get a better deal.... Let me tell you a few reasons if you don't use a realtor, your biggest investment may not be your smartest one.

Are you looking for a home? Are you intrigued by a certain fsbo home down the street? Does the owner make it more enticing since she says she will even take off the realtor commissions? Does it sound too good to be true? STOP!

2 years ago, a friend of mine was looking for homes, and was driving through a neighborhood that had spectacular homes. He found a home that he fell in love with and fell for all the lines a typical fsbo gave him. He was so excited by his so called savings, he made a deal right on the spot. Unfortunately for him the seller was laughing all the way to the bank.

My friend didn't due his diligence at all, and didn't have a realtor to advise him correctly. 2 years later he found out the following...the roof needed repair from a hail storm that happened 2 years prior, but the owner never did the necessary repairs after collecting money from the insurance company.

Let me tell you another story where a friend of mine bought a for sale by owner condo for investment. When she purchased the unit, she never asked whether she was allowed to rent it out. Since she never did her homework, or knew to ask this question, the great bargain she received on the condo was diminished since she couldn't collect any rental income. Most diligent realtors would have saved her from making this mistake, since they would have investigated whether there were potential restrictions on the property....

Additionally, a realtor has a team of resources that can save you money, in all aspects of the transaction, including costs incurred while obtaining a loan, title charges, home inspectors, real estate lawyers, and home repairs. A realtor has experience in all aspects of the transaction and can determine those issues that arise that are important in pursuing.

A realtor's job is to protect you and save you money not cost you money... Isn't that important in today's difficult economic times.

Gary Woltal - REALTOR® Dallas Ft. Worth (Keller Williams Realty said it best when he said...."The moral here is without the Realtor by your side often the haste makes waste crops in and people are very sorry later on in not investing in that expertise"

This is strategy 4 in my series or tips for selling/ buying your home. If you would like to read more posts in my strategy a week series, I have include them below for your convenience.

Strategy 3 Real estate Marketing 101 the good ole fashion way

Strategy 2- Why you should hire a local realtor when buying a home?

Strategy 1- Why you should take pictures of your home in all seasons

If you want more information regarding specific real estate sales in the Buffalo Grove, Long Grove, and Lincolnshire area, please do not hesitate to call me at 847-602-5435 , email me at info@buffalogrovehomes.com or check out my website at www.buffalogrovehomes.com or www.buffalogroveareahomes.com . I can help you in the purchase or sale of a Buffalo Grove Condo, Buffalo Grove Townhouse, Buffalo Grove single family home or a Buffalo Grove rental. I am available 24/7 to make appointments!

Posted by Judy Greenberg- Coldwell Banker- Long Grove - Buffalo Grove on 10/21/2008 12:19 AM

Comments (24)

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Originally posted at: Chicago Northwest Suburbs Real Estate and More: Buying a home by owner (fsbo) isn't all that its cracked up to be! Strategy 4

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24 Comments on Buying a home by owner (fsbo) isn't all that its cracked up to be! Strategy 4

OCT

2008

Loved your post, I total agree. Before I became a realtor I tried to do it on my own and now I will stop by a FSBO with a packet to help them out. If they suceed I feel happy for them but if they don't I share the story and we sit back and laugh a bit. I never push for their listing but in time I think they will give it to me (i just started recently) your other post were great too.

I have represented buyers on for sale by owners. I do resent the fact that I have to do all the work and give the seller all the disclosures and documents to protect my buyers and myself. I do not like working with FSBO's but if the home fits my buyer's needs, it is my duty to show them the property. Thanks for the post.

For Sale By owners are tough for both sides. Sellers are trying to save on the commission so they can make more money. Buyers look at FSBOs so they can get it cheaper. the worlds are at odds.

Some FSBO's think that all they have to do is interview the buyer and send them to the bank for a loan if they like the house. Not true, right Judy ?

Some people have to learn the hard way. Many people don't understand all the services we provide and don't value our expertise. It's a shame. Thanks for sharing.

Take care.

Very True and well written. FSBO's are not a deal. Buyers think they are going to get a break in price, and FSBO's think they will make more money and have no intention of discounting the home.

What an excellent post, Judy! Of course anyone in your BURBS, not familiar with or utilizing your services, is pretty much lost at sea. Your site is their lifeguard station, and hopefully your "blog-boat" will be able to prevent some disasters like these.

David-that's a good strategy... I like to help fsbo's too, I just want to see more houses sold!...Good luck!

Jean- you are actually right, double the paperwork, but you know it will get done right huh?

Randy- our job is to educate the buyers that they are not really saving money..

I have to agree that people who buy FSBO's think that by cutting out an agent they will get a better deal. The problem is that most FSBO's are not listed correctly and if the price is from an agents BPO, they did not discount or remove the comm, so the buyer is actually overpaying.

Judy, I love your series of strategies for the consumer. The moral here is without the Realtor by your side often the haste makes waste crops in and people are very sorry later on in not investing in that expertise.

Great job, Judy. Buyers don't know what they don't know and our job is to educate them on what they don't know so that they can make an educated decision. Would your friend have bought the house had he known about the roof before closing? Given that he loved the house he probably would have, but I bet it would have been at a lower price to reflect the cost of a new roof. In your other example, there's no way that she would have purchased the investment condo - what an expensive mistake that was!

David and Cindy- you both brought up good points.. One of my friends tried to sell their home by owner, but when it came down to getting a mortgage, the buyers never came through. She wasted 3 months off the market and ended up with a much lower selling price.

Carol- thanks for stopping by.. I love watching the for sale by owner commercials on tv knowing that no one in the real world really saves money like that.

Mara- you say everything so profoundly... I love reading what you have to say.

Kathy- you are so right, the buyer does not win if he buys a for sale by owner.

Gary- I was looking for a good moral, and couldn't in a million years come up with a better way of saying it. I'm going to copy it ok? and give credit where deserved.

I see this time and time again. It just that people can't resist the fact that they negotiated something great. Pretty rough huh? More often than not, they open Pandora's box.

Kelly-you are right, they may have bought the home, but would have received back the insurance money the sellers pocketed two years before.

Larry-yes they feel so good they did it themselves. Only years' later do they find out what's in that box.

Ooooh FSBO, now there is a tale for Halloween. Thanks for the post. I have several FSBO converts that realize they are in a bit over their heads:)

In my experience, most FSBO's simply want a higher price than Realtors have said the house is worth, and they figure going FSBO is the best way to sell their overpriced home.

Cherimie, Yes in this market, sellers have a lot of competition... Also relos aren't apt to look at fsbo homes.

Margaret , that's exactly right. They think they can fool a buyer without a realtor, because they can't fool one with one.

Ms. Greenberg- Nice work. Although, sometimes I think folks are just taking a flier for a couple weeks to see if they can get lucky and avoid the commission. If I weren't a Realtor I would not go this route, but I don't really fault the people who do. If they are willing to take the risk and do the extra legwork it may be worth a try for a couple weeks.

By the way, you don't have to tell us your stories are true. You are an excellent Realtor and well respected blogger - we automatically assume ALL of your stories are true unless you tell us otherwise.

Thanks Al, for all of your comments. I took out the word true....

Thanks Judy. Wow if I make it into the body of YOUR blog I done good. You're the best!! : ) I'm thinking maybe you have taught real estate courses in a past life cause you sure are smart.

OCT

2008

Another great post in the series. Flip side of the FSBO... not having an agent to represent you as the seller... many many years ago I sold my first home.... without an agent. I thought, "how hard can it be?". I soon discovered that I could have sold it quicker and for more if only I would have used a professional. I did find a great title agent who helped save me from potential disaster. In short... I became an agent based on my experience of what it was like to not use one.

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