Will you be the next victim of a For Sale By Owner?
The sign above brings a bit of levity to the topic of For Sale By Owners(FSBO). First, what is a For Sale By Owner? This is a seller trying to sell their property without the use of a real estate agent. The most common reason is to avoid paying a commission to a Realtor. Many will "co-operate" and pay a commission to a buyer's agent and some refuse to pay anything. However, let's not overlook the possibility of a FSBO preying upon an unsuspecting buyer. Some FSBO's will bring in 3 Realtors to determine market value. Some will be unhappy with that price and decide to try it on their own to support what they felt was the "true" value.
Last week I came across a classic example. Uptown Waterloo is a very desirable area and there are a number of freehold bungalow townhomes near William and Caroline Streets. Signs directed me to the door and being curious, I helped myself to a brochure without disturbing the owner. The front of the FSBO's brochure states in capital letters NO REAL ESTATE AGENTS. In addition to a list of features, the brochure mentions "pricing is comparable to other residences in the immediate neighborhood at $590,000." Here's where it gets interesting. I searched MLS for recent comparable sales and found the last two were for $431,000 and $367,000 in July and February 2009 respectively. I examined the registry sales and found an additional sale in October 2009 for $415,000. A check of the property assessment indicates on January 1, 2008, it was valued at $327,000. I think you get the picture.
I'll do a follow up to this post once I see it's sold and closed. Naturally, I'll be curious to see what it sells for. The takeaway point is this: hire an agent to represent your interests or you may be the next "victim" of a For Sale By Owner.
Posted by Jeff Gingerich
on May 31, 2010