"The reason "FSBO" get less for their homes than those listed with an agent is because very few buyers know their home is available so they have a small # of buyers interested,"
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
If any buyer truly believes this, then even more the reason to include FSBOs in your search. Why get gouged buying a house that has agent representation?

It has nothing to do with if the question is valid, only if using it as a thread for Converting FSBO's is valid.

There are new questions being asked daily even FSBO questions so why a 2 year old question? One wonders?

what does that have to do with what is a valid question originally? Are you just using Trulia to sound off about real estate agents? You should work so hard.

I'll ask again.. Are you all answering Halley's 2 YEAR OLD QUESTION or using the thread for a chance to Promote the Services/Advantages of using an AGENT.

If it's reached the point where so many need to respond to a Two Year old question to promote using an Agent then things must really be bad.

Foreclosures are much different animal that a traditional sale or FSBO. First, most foreclosures are represented by real estate agents who represent the sellers - in the case of a foreclosure - the seller is the bank. One significant difference is the lack of disclosures you receive with a foreclosure. You will only get those mandated by law such as Megan's Law, Lead Base Paint, State-Wide Disclosure, etc. Since the bank typically has never even seen the house other than what their agent has sent them, they have no disclosures to offer as to the history of the house, repairs made/needed, etc. Therefore, it's a buyer beware - do your own inspections - hire a professional home inspector, just as you would do with a traditional sale. But move fast - you typically only have 7-10 days to inspect the home! Traditional timelines will vary from state to state. Another thing to remember, most foreclosures (certainly the case for the ones I have listed) - need a lot of work. Calculate how much money you are going to have to put into it compared to a traditional sale that is in move-in condition. You might just find that the traditional sale is the best option yet everyone seems to think they want to buy an REO. They aren't for everyone!

okay...well that is really two different questions in one!

Re: foreclosures....could possibly be listed by an agent who would then be able to give you some guidance...otherwise you are completely on your own.

Lots of pitfalls....need a lawyer or someone who is savvy with town hall to see how many liens are on property....mechanical, tax both local and federal and state. Then you need to worry about what condition property is in...did the former owner or some handy "passerby" take all the copper plumbing? the appliances? etc. out???? Definitely BUYER BEWARE. If yu are handy, could be a great opportunity! Or if you are a plumber, electrician, or own an appliance store!!!

Now as to FYSBOs....you may or may not be getting a good buy....was it on the market before without success? and if so, how much were they asking? Good idea to hire a buyers representative to get this info...you pay 1/2 commission or negotiate with seller to pay half.....sometimes fyysbos have an overinflated idea of what their house is worth in the current market. Also it may be too emotional dealing directly with the seller....

Had to dig up a two year old thread to rant against FSBO? Answering Halley's question or just the general question how cheap, foolish, uninformed, blah blah anyone thinking of doing a FSBO is.

Dunes

Lets think for a moment.Why would a person attempts to sale a house by him/her self in this kind of a market?
First thing that comes in mind is that the person is CHEAP. How can you negotiate with a cheap person?
Second the person has no realistic sense of the market meaning you are wasting your time.
Third the person is a "jack of ll trades" he/she does everything better than any one else regardless if has any experience on the subject or not.
This last one is a very bad trade on a person and has great probability to turn the whole transaction in to a long law suit.
If one concerns about a 6% well paid expense for completing probably the biggest purchase of their life the person has no business getting involved.
A current sad example is all these foreclosed properties.Most of the borrowers that are getting foreclosed claiming (and I believe them),that they couldn't understand the terms of the loan contract that have signed.
Now a reasonable person will had hire an attorney pay him $ 500, to explain in plain terms what the contract really is stating and the consequence of signing this contract.
It is my opinion that the $500 would had been an expense with great return.
What I'm saying here is buying from a seller direct sounds good, as the buyer thinks that will save in the commissions( a misconception right here as commissions are paid by the seller in general).
Well the ones who did get involved have deferent story to tell and is not a pretty story.
Unfortunately all of us at on,e time or the other suffer from selective hearing we hear and see what we want to justify our actions.

(Lots of good info here but no one mentioned the fact that if a home is in foreclosure (otherwise known as a short sale) it doesn't matter what the Owner agrees to because the bank is the one making all the decisions. The Owner doesn't even have the legal capability to sell the property. )

Hi Jolynne: The rights go with the deed and if the owner is still on the deed they have all rights to
to sell the property. The owner also had the right to reject an offer from a buyer and has the right to reject what the bank comes back with. A good short sale negotiator should try to get the best deal out of the bank for the seller.

Lots of good info here but no one mentioned the fact that if a home is in foreclosure (otherwise known as a short sale) it doesn't matter what the Owner agrees to because the bank is the one making all the decisions. The Owner doesn't even have the legal capability to sell the property. And a Bank will NEVER talk to an individual who is trying to buy a FSBO foreclosure (confidentiality laws) to negoiate a deal, so there is little hope the deal will ever get off the ground. If you have an aversion to Realtors, you can always use an attorney at $300. per hour, but frankly speaking there are some really great Realtors with far more experience dealing with short sales then there are attorneys. Did I mention the fact that Realtors don't get paid unless the transaction closes, however Attorneys except payment in advance regardless of the outcome.

Another thing is many potential buyers are suspicious of "for sale by owners" wondering if maybe there is something wrong with the property and many times, there is. The seller has already been told by a realtor something that must be revealed in a "seller disclosure" (which he doesn't care to do) or maybe it's already been on the market many months previously with several realtors who have already informed him, his price is too high compared to the other homes, most like his.

The seller is showing his one house, he has no idea how that house compares to everything else out there in the same area & price range. A realtor is going to give potential buyers the "solds" of neighborhoods(the seller won't have that information) and a realtor will show that buyer 7-10 homes or as many as they choose. FSBO's don't realize buyers don't look at one home & buy it.

Buyers want an agent who can write their contract properly making sure every blank is filled in, to protect them specifically. Like who pays for a survey? How much earnest money and if will be refunded . The typical seller is not going to be able to answer most of the questions a buyer may have. Like "what is the total tax rate in your neighborhood?" What percentage of homes in this neighborhood are rental properties?
How much did you pay for this property when you bought it?

He is not going to be forthright w/the answers to questions that may not be appealing but an agent can provide a buyer with all of that information and more, most of the time..

The seller is truly representing himself only! Again, a realtor for a buyer is free so for that reason alone, why wouldn't they want to get represenation for them, solely?

The reason "FSBO" get less for their homes than those listed with an agent is because very few buyers know their home is available so they have a small # of buyers interested, if any. When You list with a realtor, your listing is put in MLS, exposing your homes to 1000's of potential buyers everyday, on the internet.Many potential buyers from out of town or out of state will never know about the FSBO's home.. The FSBO is just hoping somebody will drive by but the buyer for his home may be on the other side of the city and they're not ever going to know about it, much less see it, unless he has it listed with a realtor. Serious buyers don't shop for homes by randoming driving neighborhoods.

Serious buyers hook up with a realtor because it is a FREE SERVICE! iT'S JUST THAT simple plus an agent/realtor is going to know all the forms to present to a buyer to protect that seller from any future liability. The reasons for using a realtor versus trying to sell on your own, are way too high to count.

Would you try to fill your own tooth or try to represent yourself in court? Then why on Earth would you try and handle your most valuable asset, on your own. The fees paid to a realtor is because there is much more to buying or selling a home than putting a sign in the yard.

We bought our current home FSBO and had no problems whatsoever. They had lived in it for 30 years and maintained it beautifully. Our inspector, reputedly one of the toughest in DFW, gave it a good report. The foundation is stable, no cracks, no sloping floors, no doors that won't close--which is unusual in DFW, especially for older homes. We had no problems whatsoever with any of the purchasing process and the owner/sellers were perfectly wonderful the whole time. They were also very negotiable on the price, which was to our great advantage. We have loved this home for six years and are now, sadly, offering it for sale thanks to a job promotion. We're using an agent, though. I would include the link to our listing, but I am not sure whether that is permitted on here. Seems like it would be since agents are allowed to list their Web sites, etc.

Users, Did the person calling themselvel "Don't Buy" come back as Myke. I will iron your shorts Myke.

Halley,
When you are looking for a home I see nothing wrong in expanding your search. You may have a certain area that you like better than others. The more you expand your search the more likley you are to find the home of your dreams where you want it. You may have to put some sweat equity into it if it is a foreclosurebut that is for you to decide. There is nothing wrong with good old fashioned sweat equity.
As far as for sale by owners, great these are in usually in better shape.
Even if you are working with a Realtor it will take a little more time to work with the FSBO or foreclosure
seller.

I myself drive around and look for FSBO's if I can not find homes in a certain area, and ask my buyers to write down the phone number or address of any they see.

Happy Hunting and Good Luck

Foreclosures can be found using the MLS, or directly on the Bank REO sites. Foreclosures are sold-as-is and many are in need of repairs.

As for Myke answer, NAR National Association of Realtors provides surveys that are real, and based on National averages. Averages obviously vary in different areas, so take that into consideration.

I find allot of FSBO's are people trying to avoid home foreclosure.

in response to some of the generalizations i've seen on here - i have a few things to say.

First - who is NOT trying to get top dollar for thier home, barring some unique set of circumstances?

Second - when you ask agents on here why you should use an agent to sell your home - they like to quote the statistic that homes sold through agents sell for an average of 16% higher then FSBO sales.
Well - if you're a buyer - then does that mean you can get FSBO homes for an average of 16% LESS? sure sounds like it to me.

Third - this idea that all FSBO's are owned by lunatics who are irrational and living in dumps. It's absurd to make that kind of blanket generalization. Especailly given the number of sellers who ARE using agents - who are still emotionally attached to thier homes, and are asking unreasonable prices for thier property. FSBO or not has no impact on whether a person is nuts.

The problem is - agents make thier living by being a part of the sales process. You will never get an answer from an agent that does not include advice to use an agent - unless it is a matter of law, and even then some will try and stretch it a bit.

Yes - you need to be careful with FSBOs, as many owners are not aware of the standard customs of buying a home. You will need to double check things, be prepared for a little more disorganization then you might find with a listed home - but the rest of this crap is exactly that - crap.

Generally speaking I would rather represent a buyer on a foreclosure than buying a FSBO, (for sale by owner) but you want to proceed with your eyes WIDE OPEN if you buy either. If the competitive marketing analysis shows the foreclosure is a good sound investment, then you are in a money making position or an equity gaining position. The same holds true for a FSBO, BUT...and here's the sticking point:
When buying a foreclosure, the seller is NOT emotionally attached to the property. They are looking to get out for the least amount of bleeding on their side, but it is still a BUSINESS DECISION based on logic and the bank is willing to absorb a loss and can right off the loss. The FOR SALE BY OWNER is being sold by someone wanting as much as possible for their home, who is not an expert on the real estate market in their area (many are not properly informed on the process), is trying to cut expenses (they are tight or cheap) and generally has deferred maintainence on the property (not always the case) and are emotionally tied to the property. This becomes a EMOTIONAL DECISION not based on logic, but on their need to get all they can out of their home and they can get offended when you make an offer to purchase below what they believe the home is worth. There are exceptions to the rule, but another thing you may run into with some FSBO sellers is that they are not only penny pinchers, but some can be ruthless negotiators who thrive on beating the buyer in the contracting process. Make sure you have expert representation of a local Realtor so you know you are getting a good value. On the plus side, I have seen some FSBO's that were very nicely taken care of and with a willing seller, the process has been great for my clients. You need to make sure the seller is realistic on what their price and terms are for the property. FSBO's are probably going to be in better move in condition than the foreclosures as the previous owner on the foreclosure could have done damage to the property or didn't have the funds to maintain the home. Always, always get an Inspection on any property and make sure the structure and mechanicals are in good working order. If not, get a reputable contractor to give you a bid to bring to code or fix properly before you are fully committed to closing on the property. In Texas, it is very common to offer Option Money for a specified time, usually 10 to 15 days that gives you the unrestricted right to terminate the contract for any reason during this time. I would rather put up $100 to $200 to protect my $1,000 to $15,000 earnest money! Be safe and I hope you find a good deal!

The primary benefit of purchasing a FSBO is the broadening search of inventory. Your Realtor can approach FSBO's on your behalf. A large number of sellers who are selling on their own will work with your agent as a buyer's agent.

There are drawbacks to purchasing a FSBO. Real estate is a highly emotional transaction, and sellers who are not represented do not have a neutral party to bring things into focus, or answer questions when they are stuck. This sometimes puts an additional burden on the buyer's agent, who has to help move the transaction along without accidently crossing a line of fiduciary responsibility. (If the agent is they buyer's agent, he/she does not want to inadvertently function as an undisclosed dual agent.) Some sellers handle FSBO selling better than others. If and when a seller does not handle it well, you don't have a "Broker" or "Manager" to go to resolve issues like you do with an agent.

A property owner in pre-foreclosure can be a motivated seller who wants to solve a financial problem and sell property quickly before it progresses further along the foreclosure process. This response assumes you are working with the property owner.

Sellers can be very guarded when in pre-foreclosure. If the home is in the foreclosure process, there may be other problems also. If sellers can resolve the other problems, the property may no longer be available. Be careful of liens or clouds from other financial obligations, which can delay or complicate closings. This response assumes you are working with the property owner.

Foreclosures are not for the faint at heart. I don't recommend pursuit of this market without some other real estate experience behind you. Alternatively, participate in this type of transaction with someone who has already traveled this path. You rarely get to see the inside of the property, financing options are limited, property owners are not cooperative as they are involuntarily losing their homes. This response assumes you are working with the lender who is foreclosing, not the current property owner.

Expanding your search to include FSBO's and foreclosures is a great option. Use an agent for your search so you can be fully represented. Most FSBO's will work with a buyers' agent as their number one goal is to get their home sold. Foreclosures are a slightly different animal and you should be sure you work with an agent that has experience in this area. Also, foreclosures are sold as is and often times involve a bid w/ a specific time frame. Happy hunting!

The process will be the same as in The Woodlands. Spring and The Woodlands are seamless. Pretty much the same area and do not differ all that much other than outside The Woodlands is not The Woodlands proper. Interest rates, nightlife, entertainment, buying process...it will all be the same for the most part.

FSBO's can be considered but often the sellers are not realistic about the value of the home. They may not know how to proceed if you do want to buy the home. They usually have limited market information and may not be competitive. Foreclosures are a good thing to investigate especially for someone who likes to be a fixer upper. Many of them are sold 'as is' and no previous information on the home is available. It can be important to know if the home has previously flooded for instance. Flooding in some of the Houston and Spring neighborhoods, due to the flat lay of the land here, is a reality. We sometimes have huge amounts of rain. You probably would want to have this information before you make a buying decision.

The benefits of expanding your home search to include FSBOs and foreclosures are that you have more options. If you are interested in a FSBO and want representation have your Realtor contact the FSBO and inquire if they are willing to work with Realtors. The majority of time the FSBOs are willing to work with Realtors. The reason why they are selling their property as a FSBO is because they think they can save themselves some money. It rarely works out this way. Foreclosures are being sold 'AS IS' meaning the bank/seller of the property is not going to make any repairs to the property. Sometimes the repairs needs are paint and carpet. Other times the repairs needed are much more substantial. The bank/seller does not work on the weekends or after 5 pm during the week. Thus the response time from the seller is much longer than from a seller of a home on the resale market.