Real Estate Search Direct

If you are reading the classified ads looking to buy a house, you are probably familiar with the term FSBO (For Sale By Owner).  Should you buy a FSBO?

Homer Buyer thought that he would be able to buy a home at a better price if he bought a FSBO.  He figured that if the seller didn’t have to pay a real estate broker’s commissions, he could pass some of the savings on to the buyer.

Homer bought a local paper and started searching the classified ads.  He saw many that were listed with an agent or broker, but he skimmed over them.  He was searching for those listings that contained the magic letters – “FSBO”.

Homer found several listings in the paper. He noticed there was a wider selection of homes in the ads that he skipped than there were FSBOs.  He also saw that the ads for those listed by a broker were usually more descriptive and sometimes even had photographs.

He started calling on ads labeled “FSBO”.  He frequently got answering machines and sometimes no answer at all.  The seller was probably at work.  He did reach one little girl who told him only that “Mommy is sleeping,” and asked “Do you like cookies?”  Homer decided to try again in the evening.

That evening, Homer reached a few more of the FSBO sellers.  The first man, when he said he was calling about the ad in the paper, asked gruffly “Are you an agent?”

“I am interested in buying your house,” Homer replied.  The seller explained that he had been getting calls from agents trying to get his listing ever since he put the ad in the paper.  He asked Homer if he could come over right away to look at the house.

Homer still had several calls to make and he planned to take Saturday to look at several properties at once.  Besides, he wanted some time to research the properties before he met the seller.  He knew that he needed to be prepared to negotiate.

He asked if he could come over Saturday morning, but the man told him he was going fishing Saturday.  They agreed to meet Sunday afternoon at the property.

Homer asked for more details about the property.  The man told him he was asking $290,000.  Other than that he would answer any questions on Sunday.

The next seller was a woman who’s voice reminded Homer of his grandmother.  She told  him right away “I won’t sell for a penny less than $320,000.  That’s what Sadie got for hers.  And NO AGENTS!”  She gave Homer a brief description that was just what he had read in the paper.

She wasn’t available on Sunday, it was “Church Day” and her friends got together to play bridge after church.  Any other day would be fine with her, but Sunday was out of the question.  They agreed to meet Saturday morning.

Then Homer called the place he had reached earlier in the day.  Mommy was awake this time, but sounded slightly inebriated. She was more helpful than the other two.  She gave a detailed description of the property and how long
she had lived there.

She was going through a vicious divorce and had to sell the house.    She had gotten a Comparative Market Analysis (CMA) online and found that her house was worth $253,000.00, little more than what she owed on the mortgage.  She couldn’t afford to pay a broker’s commission at that price.

She had paid down her original $250,000 mortgage by about $3000 over the twelve years she had lived there.  She figured closing costs would be about $5000.

Her “scumbag husband” was out of work and she couldn’t afford to pay the mortgage by herself, so she was forced to sell.  The house needed yard work and cleaning.  She hadn’t been able to keep up with it.  She was working weekends and nights to pay the mortgage and buy cookies for her daughter.

She asked if Homer could come by on a weekday between 8 AM when she got home and 10 AM when she went to bed?  Homer agreed to come by Monday morning.  Although he was new at his job, he was sure his boss would let him come in a little late if he cleared it ahead of time.

So with three appointments on three different days, Homer started to research the properties.  He wasn’t able to find any information online.  All he knew was the addresses and what was stated in the ads for the first two properties.

Homer called a Realtor® he found online and asked him for help.  The Realtor® told him he could “run comps” on the properties, but he wasn’t allowed to deal with FSBO contracts.  His broker didn’t mind if he gave up his own commission, but the broker wanted their share.

The “comps” were lists of comparable properties that were recently sold.  This is what the agent uses to determine the value of a property.

Homer’s Realtor® explained that it showed that the first house was worth about $288,000 which was $2,000 less than the asking price.  Well, it was a starting point for negotiations.

The second house, Grandma’s as Homer thought of it, was the same model as two others on the same street that had recently sold for  $298,000 and $302,000.  Grandma was asking too much.  Homer called her back to cancel the appointment.

The third, as the website had claimed, was valued at around $253,000 in good condition.  Homer knew she wouldn’t be able to drop her price much because she had to pay closing costs.  She said it needed a little work, so Homer figured that he probably would end up paying more than the property was worth if he went ahead with the deal.

After hearing what the properties were really worth, Homer had second thoughts about targeting only FSBO properties.  His agent friend said he could show him some properties in the same price range that were listed in the MLS.

Since Homer now had Saturday free he agreed to meet his friend/agent after lunch Saturday to see some homes.  They saw 5 homes Saturday afternoon.  None of the houses they saw were overpriced.  The agents who listed them knew how to determine the value of a property.

Homer made an offer on one of the homes he saw with the Realtor®.  The Realtor® pulled up the forms on his laptop and explained them as he helped Homer fill in the blanks to make the offer.

Homer offered $20,000 less than the asking price because he was looking for a real deal.  Homer wondered how he would have managed to make an offer on a FSBO without the help of someone experienced with the contracts.  If he asked the seller for help with the unfamiliar forms, he could lose any negotiating position he might have.

Homer’s offer was rejected without a counter offer.  Homer didn’t find the exact property that he wanted to buy that day, but he decided from now on that he would skip over the FSBOs and save some time and effort by using a buyer’s agent.

Here are some of the advantages of using a buyer’s agent when searching for a home:

• A professional real estate agent knows the value of homes in the neighborhood.
• An agent has access to the Multiple Listing Service with thousands of homes listed in the area.
• An agent knows the proper forms to use and how to fill them out.
• An agent can often show homes with lockboxes when the seller is not available, making it possible to see more homes each day.
• An agent’s experience can help with your negotiating strategies.
• An agent knows from experience what traps to watch out for.

In today’s market more than ever, it makes sense to have a buyer’s agent represent your interests.  Bank owned properties and short sales are prevalent in today’s market.  These usually have a listing agent representing the seller.

If you contact a listing agent directly regarding a property you are interested in, he will represent both you and the seller.  While the agent has a duty to both you and the seller, his primary obligation is to the seller.

Real Estate Search Direct can put you in touch with a screened agent to represent you in your search for property.  An agent will be helpful in locating properties through the MLS and protecting your interests throughout the transaction.

To contact a Realtor® click here.

Allen Davis
RealEstateSearchDirect.com