We decided to share a story about a recent interaction we had regarding a FSBO.
Without disclosing anything about who the people are, let’s just say they have significant history and experience in real estate (as professionals and home-owners). They also, like most people, want to get the most bang for their buck when considering the sale of their home. All good things and we support anyone’s decision to DIY.
Of course they sought out my advice before they decided to go to market themselves. The story isn’t so much about “why” they didn’t list with me as much as it is “what happened because they didn’t?” Sometimes people just do what they believe is in their best interest, and although cautioning them, who am we say otherwise?
As a real estate professional in the area, care must be taken about what advice we give people who are “pocket” clients. Although they asked for legitimate documentation from the Arizona Department of Real Estate, we made sure we didn’t provide them with anything other than a blank disclosure form (SPDS, which is required by law even when selling FSBO) and an HOA addendum (which is also required by law). Because we’re not actually representing them, we didn’t want to imply representation although retaining the relationship with them as friends was paramount. Tread carefully Realtors…unless you’re a licensed attorney in good standing, don’t give legal advice. The pocket client could also misrepresent their position to a potential buyer as well; “pretending” to work with a Realtor. Although you’re trying to “help” as a friend, we as Realtors need to also protect our reputations and guide our friends correctly.
They decided they’re chosen avenue for marketing was Zillow and Craigslist. On a side-note, we think this is another reason for all brokerages to boycott Zillow. They allow FSBO sellers to circumnavigate a profession which is there to help them, not hurt them. But thanks to some marketing and photos, a buyer was produced who had interest in their home. (Note all of this is hearsay on my part. we never actually spoke to the buyer or saw any documentation from escrow concerning the transaction.)
The potential buyer flew out to schedule a viewing of the home and to meet directly with the sellers, (red flag #1). Everything appeared to be going well as a price was negotiated and notification was given for perspective inspection dates. This is where it all took a turn for the worse. The buyer became extremely demanding, suddenly producing actual Arizona real estate contract documentation and wanting it to be signed (red flag #2). What started out as a friendly handshake and verbal agreement turned into a test of will – one against the other. To further add insult to injury, the escrow company handling the transaction actually told the seller “they handle FSBO clients all the time” and gave rise to the idea that “they don’t need professional representation” (red flag #3).
Well, it only took 24 hours before the entire contract unraveled. The sellers wouldn’t agree to sign official paperwork, (which had to do with appraisal contingencies) citing to the buyer “We had a deal that we agreed on. What’s all this talk now about appraisals and inspections?” Of course the buyer exercised their right to have inspections and appraisals performed, but being met with resistance, backed out of the deal.
Moral of the story? The sellers learned a valuable lesson although they knew this lesson going in. “If it seems too good to be true, it probably is.” They spent a lot of time and money and although a buyer was produced, it didn’t equate to a sale.
If you’re planning on selling your home For Sale By Owner, it’s not good enough to google “How to sell my home DIY?” and read a few articles. Potential home-sellers need to know there is a lot of effort put in by real estate professionals. Contract Law, Negotiation tactics, Marketing, Advertising (not the same thing as Marketing), Technology, Syndication, Web Portals, buyer pipelines, email lists, Insurance, Umbrella Home Warranty Coverage during escrow, relationships with Title and Escrow officers, closing cost incentives, title fee discounts, property access with identification, keeping tract of timelines, negotiating with subcontractors, dealing with appraisers and banks, and hundreds of other things not coming to mind. Realtors also take ongoing education regarding negotiation skills (which translates into “keeping your cool”) and all the nuances of city, state, and national regulations. Even if you’ve been a real estate agent/broker in the past, you may not be up to speed on current laws although you may be able to handle your own negotiations. Do yourself a favor…save yourself the pain, headaches, and potential lawsuits. Hire a professional agent trained in helping you sell your home. It’s money well spent.
© Matt White - REALTOR® |