unplanned FSBO???

kitykatApril 15, 2013

The house looks great and I am ready to call and interview RE agents. I tell a group to which I belong that I will soon list my cottage and move to a patio home.

Saturday, I receive a call from a group member, whom I had not met, saying they are looking for a first home for their 23yo daughter, asking if they might take a look. I think, "why not, what's to lose?" They came, they gushed. They are returning this afternoon!

Oh my... what do I do IF they make an offer???? Take it to a RE attorney? Ask for their financial info? When to negotiate details? By the way... the Dad does commercial RE, no residential, but says he could get the forms, arrange the title work etc.

Help, need quick advice!!!!!

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Sophie Wheeler

90% of the time, it's a marketing ploy and there is no buyer. The other 10%, a real estate attorney can help you with your side of the paperwork, but you would have to be assured that the price that you have been offered is market appropriate. Minus a bit of course, because you don't need to go on the market at all!

Have you had any CMAs as part of your prep for sale? If not, then I'd ask the agent making the offer for example sold properties that would justify the price. For someone that young, I'd want secured financing or a cash offer. Or have daddy buy it. Without that, no deal.

    Bookmark   April 15, 2013 at 11:39AM
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RE Attorney would be a must.
Now to determine price, I would not take the offering REA's comps as what I'd use. I'd want my own comps...
So, the question is, do you KNOW what your house is worth? Is it very similar to homes in the very same neighborhood (tract/spec house) that have sold in the last 3 months at a certain price? Did you get comps done in prep for selling your house? You might want to.

If they want a fast, no hassle sale, then it might be worth it to them to pay a smidge of a premium (not crazy premium, but some sort of premium for not having to go against multiple bidders, etc).

Good luck!

    Bookmark   April 15, 2013 at 12:12PM
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First off, relax....you own the house, you are in control of the process. If you feel pressured/rushed to accept it, then the buyer is driving the process.

Be honest, tell them you weren't quite ready to list yet, and you'll consider their offer with deliberation, but you need to get your own "house in order" so to speak before accepting their offer. Everything you need to do to carefully consider their offer can be done in 2-3 days, less time if you are diligent.

1) Get yourself a RE attorney. Ask around for references if possible, or just google same in your area and check for references/reviews. Your RE attorney can handle all the paperwork you need cheaper than you'd pay a listing agent, so you'll still be saving money even without a LA representing you.

2) If you are NOT comfortable with negotiations, getting/working with a RE attorney, etc then its not too late to consider hiring your own Listing Agent. Since you have what appears to be a qualified buyer on the line, you may be able to negotiate with a LA of your choice for a limited commission in exchange for a limited term of agreement. You've effectively "brought the buyer" to the table, so the typical 6% commission should be halved. For the remaining 3% commission, the LA will now handle all the paperwork for you, as well as do the negotiations on your behalf and otherwise counsel you on the transaction. Its often worth it IMO, but you must make your own decision on this.

3) If you use a LA, ask them to run comps for you. They have access to database tools to make this very easy and fast. If you choose to not use a LA, run your own comps. You can get an account at Zillow, Trulia, Redfin, Listingbook (sometimes), etc. and these all have some decent tools to let you quickly create a comps list. Just make sure you focus on recently sold properties that are comparable....ranch to ranch, 2 story to 2 story, etc. Lots of how-to's via a Google search. Should take you only a few hours to run your own comps with some focused internet searches. Keep in mind, however, that Zillow/Trulia are often not entirely correct. I've had better luck with Redfin and Listingbook personally.

4) -IF- a lender is involved, you can ask for a pre-approval letter from the buyers' lender within 48 hours of executing the purchase agreement. This will ensure you don't keep your home locked up to a buyer that will never get financing approved for the property.

5) Once comfortable you are being offered a decent price for your property, its time for the remaining requests. You can negotiate many things in a purchase agreement.....closing date, loan commitment date for buyer (if a lender is involved), down payment/earnest money $, etc. Depending on the state you are in, you can also negotiate how long to allow for inspections, what $ funds are involved to 'hold' the property during inspection period (if any), etc. Its not entirely driven by buyer...everything is negotiable and this is a total two-way street.

Important thing is to move into action QUICKLY. Figure out what your home is worth (FIRST!), then figure out how you want to handle the purchase agreement, engaging a RE attorney vs. LA, etc. Your first priority should be comps....and even WITH the help of a LA, I've still always run my own comps, just to be sure I'm not hiring a clueless LA in the first place (and many, many are just that...clueless).

    Bookmark   April 15, 2013 at 12:59PM
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The daughter wants to measure some of the rooms/walls today. They lived in this neighborhood when the kids were small and think it would be lovely for the daughter.

Daddy, as a commercial agent, does not have access to the MLS. I had CMA's run last Oct, and they were low, as houses selling then were not in the greatest condition, etc, as in NOT maintained. There is little to nothing right here currently on the market. Homes just beyond this subdivision, a few blocks away, are listed for about what I would ask.

This house is a really nice (that is an un-emotional truth!) starter home. It has an incredible garden. I believe it would be a winner on the open market... however, no commission would/could be a nice advantage for both parties.

This IS a business deal, and I will not commit without professional advice. Just don't know what the pitfalls might be.

    Bookmark   April 15, 2013 at 1:11PM
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In this instance I think the warnings about agents are not applicable. Although in some cases, agents work in commercial RE and residential, there are many commercial agents that do no residential sales at all. Many, as seems to be the instance here, don't belong to any MLS.

Big commercial real estate, (think strip malls, office parks, industrial sites, etc.) brokers are a different sort of agent. I've had commercial agents as clients and was stunned by their lack of knowledge about residential RE.

Seems as if the OP got lucky. A friend of a friend heard about the house and was interested. Just as a coincidence the spouse happens to be a commercial broker.

    Bookmark   April 15, 2013 at 6:03PM
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Thanks SO MUCH for the remarks. The young lady looked again, and decided that she needed a simpler yard for her dog, and will look further. Everyone here is so kind to respond quickly and offer advice. I love this site!!!!!

    Bookmark   April 15, 2013 at 7:55PM
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The subdivision across the ways is not where you need to be looking at for comps. You need to stay in YOUR neighborhood to determine your home's value. Even if you think these comps are not as maintained as your home, they are still your comps.
And probably there are more buyers tthan not hat look at a large garden as work, as oppose to an asset.

    Bookmark   April 15, 2013 at 9:34PM
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Sophie Wheeler

Yes, most buyers view gardens as liabilities, not assets. Unless the home is in the category to have a paid gardener to maintain things. And, foreclosures and "unmaintained" homes are more your comps than sales from a more distant neighborhood. What has sold in YOUR neighborhood determines what your home will be able to be sold for. I fear that you are over valuing your home. The best shot you will get to sell it is the initial weeks on market. Be sure you're priced right. Better to be priced a bit low than at all high. You might generate a bidding war if you are priced low and are in as good condition as you say. Priced high......people pass you by.

    Bookmark   April 15, 2013 at 11:47PM
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I`ve done two FSBO here in Mich. we agreed on price, and I paid a relator 700.00 to handle and write it up. worked fine. no problems.

    Bookmark   April 16, 2013 at 8:43PM
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