What are the benefits or drawbacks to expanding my home search to include FSBOs and foreclosures?

Asked by Stephan, San Francisco, CA Mon Apr 23, 2007

How does the buying process for foreclosures or FSBOs differ from homes sold by agents?

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Mary E. Abshire’s answer
Mary E. Absh…, Agent, Naples, FL
Mon Jun 9, 2008
Stephan, you should always explore every opportunity to you especially in this real estate market. FSBO or foreclosures are great opportunities to buy a property at 50 cents on the dollar. We have many in SW Florida and we are selling them like hotcakes, for a lack of a better terminology. So, get a good knowledgeable realtor of the market you are interested in and you will be surprised at the difference of price and negotiations. Most of the foreclosure properties in SW Florida have been given to a realtor to sell at a much lower price that the bank or financial institution has decided on. Good Luck and if I maybe of help please feel free to contact me. Thanks, Mary
0 votes
J R, , New York, NY
Mon Jun 9, 2008
Sometimes FSBO's can be overpriced .. but if you think about it, they're usually following the information that was given to them by the "potential" listing agent - who didn't get the listing ...
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Wrong. Stephan, the potential listing agent probably didn't TAKE the listing because the homeowner wanted to overprice it. Homeowners ( and Tman apparantly) forget that while the homeowner is interviewing us, we are interviewing them. One wonders why this mythical listing agent didn't get it, if they gave the owner this too high number?
0 votes
Tman, , 30642
Mon Jun 9, 2008
Stephan,

Always always always look at the whole market.

Sometimes FSBO's can be overpriced .. but if you think about it, they're usually following the information that was given to them by the "potential" listing agent - who didn't get the listing ...

But, if you've done your homework, studied that geographic market and you've physically seen and touched the comps - then make an offer ... thats why it's ~ "for sale"

Plus, keep in mind ... how over priced can a $400,000 FSBO be when the same house 5 doors away is being held by a realtor for the same price.?

Well .. we're pretty certain that the FSBO will negotiate away $24,000 that the house 5 doors away has to pay in commission - and then, the real negotiation starts .. if not, move on..

Never fall in love with any home ... you should have 15/20 in your briefcase and bid in chronological order, it might take days, it might take weeks ... but you'll save thousands.

As far as foreclosures and even short sales .. that market is so jumbled and jammed now, you have buyers paying $3,000 less instead of $130,000 less ... can we say: "pass".


Good luck and happy hunting.!

: ^)
0 votes
Don Tepper, Agent, Burke, VA
Sun Jun 8, 2008
J.R. is right on target. The benefits, obviously, are that you have a wider selection of properties, including some (some FSBOs) who aren't identifiable on the MLS. And that's really about the only advantage. If you've been searching for a while and haven't had much success in finding what you're looking for, then, sure, definitely expand your home search.

The drawbacks are many. FSBOs are often overpriced. Partly, that's because some are already financially squeezed and need every penny they can get out of their property. Partly, that's because some are still into the 2005-2006 property price mindset. And, without trying to psychoanalyze FSBOs, a lot of them are very self-confident. After all, they're convinced they can sell their homes themselves. (And, yes, some can.) And sometimes this self-confidence runs over into the pricing process. Honestly, I've seen a lot of very nice looking FSBO homes. They've been modernized, they're fixed up, they show well. And the owners know it. Unfortunately, they sometimes overestimate the value of their work, and so overprice their homes. There's also the question of, if you're using an agent, how that agent will get paid. Sometimes, FSBOs will pay the agent's fee. Sometimes not.

As for the drawbacks of foreclosures, first there's no assurance that foreclosures are good values. Second, although not as bad as short sales, foreclosures are unpredictable. It's not like making an offer on a regular home, or even a FSBO.

Hope that helps.
0 votes
J R, , New York, NY
Sun Jun 8, 2008
It's great to expand your search, but know that banks aren't always negotiable, and FSBOs are usually overpriced.
0 votes
Carlos Lobato, Agent, Miami Lakes, FL
Sun Jun 8, 2008
the first answer is quite correct. Here's a great foreclosure site that's updated ona daily basis:

http://www.floridamoves.com/Property/reoSearch.aspx?propsear…
0 votes
Manny Aguilar, , Miami Lakes, FL
Mon Apr 23, 2007
We are finding less and less FSBO properties in Miami Lakes and nearby areas. Most FSBO found have unrealistic prices, and unlikely to sell.
0 votes
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