In my last blog, I discussed For Sale By Owner properties and the issues surrounding purchasing a property directly from a seller as opposed to from a seller's agent.
This time, I want to discuss are the issues with pricing a For Sale By Owner property. For Sale By Owner.com's tips for FSBO sellers claims that "over-pricing" is one of the major reasons that these properties don't sell, and suggests that these sellers price their properties 5 to 10 percent above the normal market price.
This is not necessarily an attempt to make as much as possible by the seller. Many sellers do not have the tools necessary to price a property correctly. They may be basing their asking price on another sale in the neighborhood that they heard about a year ago, or on a price that they saw in another area, or any other number of factors. And of course we all know the market has changed in the last year or two!
The rules for bank appraisals are tougher than ever these days. An improperly priced For Sale By Owner property will likely not appraise if the owner has set the asking price above the normal market price. So do you want to overpay for the property? This also becomes an emotional issue for the seller - "My house is worth more!" is a common refrain.
This is why it is so important to research a For Sale By Owner property before purchasing it. An Exclusive Buyer Agent can prepare a comparative market analysis to help determine the proper price for a property. Your agent can buffer the emotions and help the seller see reality...based on the facts.
A For Sale By Owner property may indeed be the right property for you - but an Exclusive Buyer Agent can ensure that the property is the "great deal" you are looking for.