July 23, 2008

A Buyer’s Perspective on the Pitfalls of FSBO

I used to think that “for sale by owner” houses were a good way for home buyers to save a little dough. After all, a seller without an agent saves the five or six percent commission. In theory, that savings would be passed along to a buyer. The buyer gets a good deal, the seller nets more than what he or she would get with a Realtor and enjoys the competitive advantage of pricing a home for a quick sale.

That’s what I used to think. Then I started visiting FSBO’s.

First thing I noticed was the homes were invariably overpriced. Instead of using the savings on commission as a way to lower a sales price, sellers expected top dollar regardless of the home’s condition.

And speaking of condition, I noticed that FSBO homes didn’t have that spit-shined, freshly-vacuumed look of homes shown by agents. The homes I saw needed lots of work —not that the sellers noticed. Sellers seemed stubbornly arrogant or sadly “out of it.” They might have learned a thing or two by visiting the competition.

I discussed this frustrating phenomenon with a friend, who gave me his theory: “People who sell their own homes are the people who weren’t willing to listen to a Realtor about the real value of their property,” he said.

After several maddening FSBO experiences, I decided he was right. The best use of my time was to stick to homes marketed by professionals — especially if I wasn’t saving anything by dealing directly with an owner.

I confirmed my decision when I found the perfect place, marketed by a pro. It was also confirmed when I saw two FSBO ’s I previously viewed end up with Agents who lowered the prices to where they should have been all along. Ironically, both sellers made significantly less than if they lowered prices when they were trying to sell on their own.

Perhaps in a slower market, some FSBO sellers will come to their senses. Or, maybe not. Take a look at these FSBO properties and tell me what you think:

19 Winchester Street
Brookline
BEDS:1/BATHS:1
SQ.FT: 700
$335K

1731 Beacon Street
Brookline
BEDS:2/BATHS:2
SQ. FT: 1200
$525K

21 Park Vale Avenue
Allston
BEDS:1/BATHS:1
SQ.FT: 780
$250K

Recent Sales in Brighton and Brookline
Sweet Digs Boston Home

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