Buying For Sales By Owners
I bought one of my first homes from a For Sale by Owner, a FSBO. It was a quaint Cape Cod two-story with hardwood floors, an add-on family room, four bedrooms and an underground garage. I didn't pay list price but it wasn't far from it.Turned out to be a sweet little deal for several reasons. First, it fetched an FHA appraisal at 10% more than I paid for it. Second, the sellers had to pay off an assessment before they could close escrow. This was an expense they weren't counting on when they agreed to sell to me per FHA requirements, which required improvement assessments paid in full. But that's what happens sometimes when a seller doesn't have representation.
And third, I sold it at a tidy profit a year after I bought it. Turned out I couldn't stand watching the belly of airplanes zoom so close to the roof. I could almost count the number of people occupying the aisle seats from my back-yard deck. A fact that didn't bother my new buyer with three screaming kids.
Buying For Sales by Owners can be very profitable.
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Technorati tag: FSBOs For Sale By Owner
Comments
If only it were possible to get factual data on FSBO’s versus using an agent. The NAR numbers are skewed to favor their position and the FSBO numbers are skewed to favor theirs. If we could, I think the numbers on price alone would favor using an agents.
Greg Tracy had a good article on the FSBO issue today.
http://blueroof.wordpress.com/2007/04/22/for-sale-by-owner-doesnt-always-pay/
That is a good piece, John. Thank you for the link. However, the author says FSBOs sold for 12% less than those represented by an agent. The most recent numbers released by NAR for 2006 say FSBOs received 24.3% less. The median price of a home sold by an unrepresented seller was $187,200, versus the median price for a home sold with the help of a real estate agent, which was $247,000. So whether it’s an average or median comparison, the point is unrepresented sellers typically receive less than those who work with agents. There are always exceptions, of course. But the odds are against it. Especially in buyer’s markets.