Buy That House: FSBO; The Seller's Motive

Buy That House: FSBO; The Seller's Motive

Why does someone decide to sell their house on their own?  The number one reason, in the mind of the seller, is to net more money in the transaction.  Their belief is that if they do not have to pay a commission to a real estate agent, then they will have more money going onto their side of the ledger.

Why does someone decide to buy from someone who is trying to sell their own house?  The number one reason, in the mind of the buyer, is that they will pay less for the transaction.  Their belief is that if there is no real estate commission to be paid, then there will be less money needed to complete the transaction.

Notice that both the seller and the buyer think that they will be paying less money, which suggests that they will split the savings.  This means that they are both making a choice between receiving the services provided by a real estate agent for a fee or no service for a reduced price, or in the eyes of the seller, a cost.

The seller supposedly starts this chain of events with the idea that they are capable of performing this transaction without an agent and with the idea that they will be saving the money.  If they were going to give any of the savings to the buyer, then it would defeat the main purpose of saving money.  If they were going to give the money to anyone, it only makes sense that they would give it to someone who would be giving them something in return, such as a real estate agent.  It would be a misperception for the buyer to believe that the seller would be giving any of the savings to the buyer.

Most buyers are not aware of all of the concerns involved in a real estate transaction.  In support of this thinking, a buyer who has talked with a "for sale by owner" seller may have experienced the following:

• "You do not need a real estate agent to complete the transaction."  This may be true but what does it help other than the seller paying less money.
• "The home was already inspected."  Who already inspected the house?  Your brother-in-law?  Do you have the results?  Can I see the report?  Was the inspector part of a respectable organization like ASHI?  Was it a comprehensive inspection?  You may not know what questions to ask.  A real estate agent would know.
• "It was already appraised."  For what purpose was it appraised?  A refinance?  How long ago was it appraised?  The appraisal may be valid and it may not.  The market may be appreciating or it may be depreciating.  Will my lender accept your appraisal?  A real estate agent would know.
• Who will write the contract?  "I have a friend who is a lawyer?" or  "We can get a copy from the internet."  You know a lawyer who works for free?  Is your lawyer familiar with real estate transactions or is he a divorce attorney?  Does the internet version have the latest laws and required disclosures?  A real estate agent would know.
• Is this a good price?  "Such and such house just sold for such and such amount . . ."  How long ago is just sold?  Is the other house equivalent in square footage, amenities, updates, . . .?  A real estate agent would know?
• . . . .

The seller and buyer have one motive in common, to complete the transaction, but otherwise have conflicting interests.  The seller wants the highest price possible for the least effort and least cost, while the buyer wants the lowest price possible for the best possible house.

When a buyer uses the services of a real estate agent, then numerous important concerns will be properly addressed, such that (what will likely be the biggest investment that they make in their lifetime) their purchase will be protected.  It is likely that in both the long and short term they will save money.

Contact Ron Trzcinski at 410-935-5844 for more information.