Yesterday we talked about selling homes via “For Sale By Owner” or FSBO (pronounced fizz-bo). We saw some interesting statistics that potential FSBOs should be aware of.
Today, let’s talk about other pieces to the home-selling process that people wanting to FSBO might not have thought of.
This slide lists some of the various people that a FSBO may have to interact and deal with. Of course the obvious is the buyer, but sometimes a buyer will come with an agent to represent him. That can set up a bit of an unfair advantage for the buyer, assuming his agent is savvy and the FSBO is not.
Other people the FSBO may encounter are the buyer’s attorney (again, potential unfair advantage to the buyer), home inspector, termite inspector (and/or other inspectors of the buyer’s choosing–lead-based paint, well, septic, roof, etc.), the title company, and more.
One facet of the FSBO process that people may not anticipate is dealing with the buyer’s lender. This is a big one and a very important one. Knowing that the buyer is using a reputable lender is extremely important. There are lots of “lenders” out there who claim to give loans at super-low interest rates. Unfortunately, buyers often find out later on in the process that there are hidden fees and/or the lenders are unable to close on time. This can be a huge problem.
Another important thing to know is that most mortgage loans require an appraisal be performed 30 days before closing. With all that our economy has gone through over the years, appraisals are no joke. If someone gets a loan for a house that costs $300,000, but the appraisal comes in at $280,000, guess who’s going to have to eat that $20,000. Yup, if the buyer wants the house, he will have to come up with the difference. Now while this happens with or without an agent representing the seller, it’s still an important piece of information to know as a FSBO, since the buyer has the right to walk from the contract if the appraisal comes in under his loan. A great way to avoid this situation is to get an appraisal done on your house in advance.
So, if you are interested in selling your home by yourself, be sure to fully investigate what is involved before you make your decision.