Home Buying in Readington>Question Details

Susan F., Home Buyer in Central Business Dis...

Is it a good idea to buy from "forsalebyowner'?

Asked by Susan F., Central Business District, Newark, NJ Mon Dec 15, 2008

My husband and I do have a realtor working for us. But we haven't signed any agreements with him. Are we not able to see any properties that are strictly forsalebyowner?

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Hi Susan,

Mention the FSBO you have in mind to your Realtor and he/she should be able to get a showing.

Cathy C.
0 votes Thank Flag Link Wed Feb 11, 2009

There is nothing wrong with purchasing a FSBO. In this market I'm sure they are already cooperating with local real estate agents too. At no additional cost to you your current agent can bring you through the home and negotiate on your behalf. Best of luck,

Camille Miller
Just Jersey Properties
0 votes Thank Flag Link Wed Feb 11, 2009
If you are working with a REALTOR, ask him/her to contact the FSBO and ask to show the property. Unless you been through many home purchases, you really need someone to work with you on the process, particularly a FSBO sale.

In most cases a FSBO is not aware of the ins and outs of a real estate contract, and if you find something you really like you'll want to have a REALTOR to monitor and move the process along. It is just the beginning when you sign the contract, there's much more to do if you want to get to the closing table.

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Sun Feb 1, 2009

As those that answered prior have mentioned, most FSBO homes are not priced in accordance with the market. They (generally) price on a "need" basis versus a "market" basis and after trying to go on their own, eventually turn to a professional to list their home. Bear with me here as I go over some basics...there's a method to the madness!
The listing agent, after a listing agreement is signed, then has the responsibility to market the property everywhere they can and to make sure that every avenue is taken, represent the seller and have a fiduciary responsibility to the seller. Internet, Open Houses, mailings, Brokers Open Houses, phone calls and to make sure that every possible agency relationship that exists (buyers agents, sub-agents and transaction brokers) get compensated for bring the buyer. The listing agent should not care where the qualified buyer comes from and should compensate any agent for the qualified buyer.
I'm sure you know of the sellers agent agreement that is also called the listing agreement.
There is a similar agreement for Buyers Agents. As a contracted Buyers Agent, the responsibility of that agent is to look everywhere for the home that meets your wants and needs. EVERYWHERE! FSBO's, expired listings, mailings, door knocking, phone calls in accordnce with the Do Not Call Registry. So a buyers agent agreeement is like a sellers agreement which specifies a fee to be paid at closing regardless of the homes listing status and to have that same fiduciary responsibility to the buyer. They will work on YOUR behalf and find the right property for you. According to National Association of Realtors, a FSBO is (on average) priced about 15% above market, and if you as an unrepresented buyer are not armed with the market data, knowledge and negotiation expertise represented by an agent you could actually be overpaying. Most FSBO sellers will pay a realtor fee but these need to be found by your Buyers Agent. But what if your perfect home seller won't pay the fee. Well, if your buyers agent beats the bushes, finds the perfect home and property (even if was not listed or even if the sellers had not thought of selling), negotiates to a MARKET price and terms you agree to, coordinates and guides you through the maze of getting to the closing table, they have fulfilled the Exclusive Buyer Agency Agreement that you enter into and have earned their pay.
Summary: If you have full faith and trust in the agent you are working with, allow them to work outside of the constraints of MLS or only those FSBO's that will pay the fee. After all...your perfect home at the best possible price and terms is your goal and now it is your agents goal regardless of the sttus of that home..knowing he/she will be compensated for their work. Unlike most every other profession, a Real Estate Agent ONLY gets paid upon the succesful completion of the task (closing). Your dentist, CPA, doctor, lawyer, contractor, will be compensated based upon the percentage of work completed. Heck, your heirs will get a bill from the anesthiologist even if you don't make it through the operation. Your agent only gets paid by their Broker if everything is a success.
0 votes Thank Flag Link Sat Jan 31, 2009

It would not be recommended to limit your home search by excluding any demension of home sales.

One thing you need to be aware of is that "For sale by owner" home owners generally have a very weak understanding of the actual value of their home relative to the current real estate market. They feel it necessary to include every nut and bolt, repair or replacement as a major renovation that adds considerable value to their home.

Many buyers, feeling they would save money by persuing a "for sale by owner" actually end up paying more for their property. Our recommendation is to deal cautiouslywhen considering these sales.
0 votes Thank Flag Link Mon Dec 15, 2008
If you have a realtor, ask the realtor to approach the FSBO and see if they will pay him/her a commission. If not you could agree to pay the realtor a commission for representation, under a Buyers Agent Contract.

The key word here is representation. If you decide not to use your realtor, get a real estate attorney to handle the details.

The realtor would be best at negotiating the sale in your best interests.

Good Luck!

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Mon Dec 15, 2008
In most instanced for sale by owner end in huge problems where the buyer has lost their earnest money. There are many seasoned veterans who know how to work the system take money from buyers who are not familiar with terms for contracts and etc. Our office answer many calls and emails requesting assistance at that point to late for realtor or atttorney become involved. Rule of thumb never purchase a home from a builder/seller/listing agent unless you have your own agent.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Mon Dec 15, 2008
Hi Susan, You should stay with your realtor for representation.
Tell your realtor of the FSBO homes that you want to see, most FSBO's will work with a Realtor and pay a commission. This way, you have realtor representation in your corner. Yes, you will have an attorney to do the closing and make the contract legal after you make an offer that is accepted. But you want a knowledgeable realtor in your corner to get you to negotiate the sales price and get you to closing.
I am able to work with 99% of FSBO sellers and help people buy their homes.

Call if you need some help.

John Sacktig
Orange Key Realty

Office: 732-863-6969
Cell: 732-213-1409
0 votes Thank Flag Link Mon Dec 15, 2008
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