Appraisal and offer what on a FSBO? (contingent, 3%, clause) - Real Estate -Brokers, appraisals, development, lease, investing, relocation, apartments, houses, condos, values, mortgages, loans... - City-Data Forum

Bonohio · 05-09-2008, 01:23 PM

We'd like to make an offer on a FSBO. This house is in a small community where one single real estate agent "rules". It was for sale through the agent last fall and did not sell. Now that it is a FSBO, the sellers are going by the price listed last fall for their asking price, less what they would have paid the agent. We're no experts, and are not from that small community or even the same county, but here's what we have learned:
Another house (100 yrs old, big, framed, small lot) had been listed last summer at some price, got an offer for 130 which was turned down by the seller. Relisted a couple months ago at $99,000 and they took an offer of just $89,000!! We have thought that houses are overpriced there and that proved it at least to me. That and only a few houses have been on the market and stayed there for many months. Plus, when driving through town this week, I noticed the one small new housing development in town had both houses and lots for sale by this one real estate agent that has a monopoly on listings. So wouldn't it make sense that they overprice existing property so buyers would buy new in their new development? I think so and I know nothing about real estate. So -- all that to ask this

-- We'd like to make an offer on the FSBO but are making it contingent on selling our home first. Can we also make it subject to appraisal and get an independent appraiser to do one? What do we do if 1) the appraisal comes in over their asking price? (I can't imagine that happening) - can the seller up the price or are they obligated to accept our first offer? also
what if 2) the appraisal comes in much lower than their asking price? Do we submit an entirely new lower offer?
Any advice is greatly appreciated!

Racelady88 · 05-09-2008, 02:38 PM

It is standard to include a contingency clause for the house to appraise, as well as for financing.

Silverfall · 05-09-2008, 05:44 PM

Why don't you see if you can find a "close by area" agent to help you with your contract, or hire an attorney. Just based on your questions, I think you would benefit from some guidance. I understand your hesitancy is using the agent with the monopoly in town.

Many agents will do a flat rate or hourly rate.

What you write into a contract is really important. I know here in Oregon, non real estate agents can purchase our forms. I would try and find out who the company is that generates the legal forms that the real estate agents use, and use those forms.

bentlebee · 05-09-2008, 07:05 PM

If the appraisel comes back higher that doesn't mean the seller is going to ask more or can even do that. I have sold a home and the appraisel came back higher than what I was asking although I basicaly flipped the house and made a good amount on the home, but that doesn't mean I could have raised the price...would have been nice, but we signed the contract and for the buyer it is nice to know that there is equity in the home. So if that happens it is a good deal.

Bazzwell · 05-09-2008, 09:12 PM

Quote:

Originally Posted by Bonohio

That and only a few houses have been on the market and stayed there for many months....... We'd like to make an offer on the FSBO but are making it contingent on selling our home first.......

Sentences one and two above are connected.

Being that you've noticed many homes on the market a long time, what are your positive thoughts on why your house would sell in a shorter time period?

How long of a time period would you expect the FSBO to hang on to your offer if your home follows suit and fails to sell quickly?

Would you allow the seller the courtesy of entertaining, and perhaps accepting, offers while your home is awaiting a buyer?

You really need to get some outside assistance from at the very least an attorney familiar with real estate law in your area.

Brandon Hoffman · 05-09-2008, 09:31 PM

You have asked some rather elementary questions. I highly recommend that you hire some guidance as well. A buyers agent can still present the offer and manage the transaction if the sellers will work with them and at this point I think you need the protection.

The farm you mentioned may not be a good comp The offer should be contingent on the property appraising, I don't know that it would be wise to get one up front unless you are completely unsure of pricing. I suggest hiring representation. It could easily save you money in the long run even if you end up having to add the 3% onto asking price as a worst case scenario.