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I have seen soooo many houses on FSBO or the MLS-listing services (where you only pay a couple of hundred bucks) not sell for months or years and then sell quickly after listing with an agent. Why? Because the listing agent convinces the sellers to lower their price! And you know what, if it gets someone to move on with their life and actually sell their house, then great, the agent fee was well worth it (on top of the other services a listing agent provides)
I'm a first time homebuyer looking to buy a modest home with my fiancee via the USDA loan. We found a gorgeous little house we love but the seller has it way overpriced at $147k. He says he needs to clear that much to pay off his mortgage and ex but the home has been on market nearly a year and my realtor tells me he doesn't expect it to go off the market anytime soon, not at that price.
1. It's overbuilt for the area (mobile homes next door)
2. The seller believes the renovations made should bring up the value a LOT (new paint outside) while the home is still older and not updated (80s kitchen)
3. The seller is basing his price off the assessed tax value but comps (which are difficilt since the home is unique) sell for 85k-130k. I would love to get it for 115-125 maybe 130.
4. And here's the kicker. The seller has no idea why it hasn't sold at his preferred price because he says sitting out on the back porch watching the birds go by is just priceless. Like it's worth an extra $30,000 priceless.
We really like this home but some things are wrong with it (only 1 ba, small kitchen) that might require updates. How do you negotiate with a seller that believes his house is worth waaaay more than it actually is?
I'm scared to insult him with a low offer more appropriate for the area. We are a bit sentimental about the home too because we just fell in love with it but now I'm starting to distance myself in case he won't negotiate with us. He says he wants to move ASAP but at that price I don't see it happening.
Just make an offer and then move on. If you really like the house, offer the $130,000 like you said. If you have to have the house you might want to get it, because someone else who really wants it might get it before you.
That being said, in most instances there are probably better houses if you look around that will fit your price range better. Just move on to other houses.
It probably won't. If anything he'll say he had an offer for $150k which in his mind will justify his asking price of $147k even further.
Never let your emotions get the best of you during house hunting. It will lead you to make poor financial decisions. Always be prepared to walk from a deal if the numbers don't make sense.
If, he even got that offer & did not dream it up. Make an offer & when he rejects it move on.
Every agent says this, they hate seeing the public get around their outrageous fees.
Wrong.
I am an agent, and don't disparage FSBO.
I have worked with a few great FSBOs and a few deluded FSBOs. Kinda like the rest of the real estate gene pool.
Quote:
Originally Posted by jackmichigan
Yet, you'll notice that I said "some" FSBO sellers. I actually encourage people to try to sell FSBO if they feel up to it. Many people like to save money if they can. Others prefer that someone handle the chore for them. Either way is fine by me.
You are very unlikely to convince him he's wrong about the price. And clearly whatever interest he has in selling and allegedly moving quickly is outweighed by his desire to get what he thinks he's entitled to, regardless of what the real market value is.
Make your offer and move on. Whether you "insult" him or not is irrelevant because if you offer what you feel the house is worth and it's significantly below what he wants, he is not going to suddenly change his mind.
Yet, you'll notice that I said "some" FSBO sellers. I actually encourage people to try to sell FSBO if they feel up to it. Many people like to save money if they can. Others prefer that someone handle the chore for them. Either way is fine by me.
i have spoken with you a number of times on this. Mostly you try to discourage people.
I buy and sell a home here and there. The only hard part of a FSBO is making the deal, the rest is resolved by both parties hiring RE attorneys and a little homework.
My advice to anyone doing a fsbo, from either side is don't sweat the small stuff, and watch out for costly issues.
a few hundred bucks here or there don't matter, what matters is closing, and avoiding structural and legal issues.
A good deal is when everyone feels like they got a good deal, it avoids issues later, and you just feel better. I have no interest in getting the cheapest price or the highest price, i shoot for the price that means they call me a year later to show me what they did and maybe have some dinner.
I think you and your real estate agent need to be a little creative. This technique might cost you a few hundred dollars, but what if you went to the FSBO and said, "Mr. F, I love your house, and I can really see myself living here. Obviously, there's a few things that I will need to work on that you probably don't even notice anymore, and my gut instinct is, that since you've been on the market for so long, the house may not appraise. How about we agree on an appraiser and have the appraiser give us a value? I'll then enter into a contract with you for any appraised value up to $135,000."
Even if you DID agree to the $147,000, the house has to appraise. And if you're getting a 100% USDA loan, you really have to nail that appraisal. So you might have to pay for two appraisals, but it may move him off his rock.
i have spoken with you a number of times on this. Mostly you try to discourage people.
I buy and sell a home here and there. The only hard part of a FSBO is making the deal, the rest is resolved by both parties hiring RE attorneys and a little homework.
My advice to anyone doing a fsbo, from either side is don't sweat the small stuff, and watch out for costly issues.
a few hundred bucks here or there don't matter, what matters is closing, and avoiding structural and legal issues.
A good deal is when everyone feels like they got a good deal, it avoids issues later, and you just feel better. I have no interest in getting the cheapest price or the highest price, i shoot for the price that means they call me a year later to show me what they did and maybe have some dinner.
I don't believe that I have discouraged anyone from selling FSBO--and I'm sure that I've read more of my posts than you have. I do, however, try to caution people about some of the pitfalls of real estate transactions--and that applies towards both FSBO and represented transactions.
If you ever see a post where you feel that I've tried to discourage someone from trying to sell FSBO, please let me know. Seriously.
Anyhow, in case you missed a couple of relatively recent posts, I've copied them below. (Thread titles in bold.)
Tips for buying a FSBO?
Quote:
Originally Posted by jackmichigan
It depends, in part, on where you are. In my area, it would be preferable to have a title company handle the closing and paperwork. For extra assurance, you could have a real estate attorney simply review those documents.
Question about selling as FSBO
Quote:
Originally Posted by jackmichigan
If you're satisfied with the price and will be selling it to the neighbor then, yes, a real estate lawyer would be both cheaper and better than using an agent.
I think you and your real estate agent need to be a little creative. This technique might cost you a few hundred dollars, but what if you went to the FSBO and said, "Mr. F, I love your house, and I can really see myself living here. Obviously, there's a few things that I will need to work on that you probably don't even notice anymore, and my gut instinct is, that since you've been on the market for so long, the house may not appraise. How about we agree on an appraiser and have the appraiser give us a value? I'll then enter into a contract with you for any appraised value up to $135,000."
Even if you DID agree to the $147,000, the house has to appraise. And if you're getting a 100% USDA loan, you really have to nail that appraisal. So you might have to pay for two appraisals, but it may move him off his rock.
I'd find another house. This will drag on and on and cost you money.
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