Think commission is the only reason a homeowner sells FSBO? Not Always!
Most FSBO’s just want to save money and not pay the normal commission to list their home through a Realtor. This article is a warning to homebuyers of unscrupulous reasons some other homeowners sell FSBO. I would have not known this homeowners intent had we not met face to face. She had no intention of being truthful to potential Buyer. She refused to complete the Seller’s Disclosure Notice and went FSBO instead.
During a listing appointment with a homeowner, our conversation led to her telling me about several cosmetic issues she planned to repair. As we walked through the home I noticed indications of more major issues. I mentioned the cracked ceramic floor tiles as well as cracks in the sheetrock walls and ceilings (she planned to repair) could be an indication of foundation movement. She confirmed my suspicion by showing me a recent foundation repair estimate, but it was more than she could afford. Moving forward with completing the paperwork to list her home, I handed her the Seller’s Disclosure Notice ( a form the buyer is to receive from the seller). I explained that Section 5 of the property code required her to list any known adverse conditions or defects, along with any reports obtained within the last 4 years.
Disclosure: “Is This Really Necessary”
This homeowner got to page 2 before saying, “Is this really necessary?” I thought by explaining in more detail about the Seller’s duty, the Broker’s duty and the required disclosures she would comply. I was wrong! She had no intentions of ever disclosing to a buyer what she knew and what I now knew. Before I left a few choice words were said because I refused to be a part of her deception.
Later that day I repeated what had happen to several agents. One said, “It will be a FSBO mark my word”. Sure enough it was! In less than 30 days a sign was in the yard.
What this FSBO didn’t know is that I happened to know a lady that walked her dog past her house everyday. This lady finally met the new owners and they became friends. To make a long story short, they finally received some extra repair money in the pocket. Fast forward 17 years later and I’m still warning buyers and newer agents by telling this story.
Tactic # 1 More Anonymity and Less Accountability
Today most FSBO’s do more than stick a sign in the yard, however the less interaction a homeowner has with an agent can equate to more anonymity and less accountability. It’s much easier to not disclose or cover up costly defects when there is no agent involved. An Agent or Realtor is bound by ethics and that would have cramped this FSBO’s style.
Tactic # 2 Refuse and Bait The Hook
Another tactic used in lessening the FSBO’s exposure is essentially discouraging a Buyer from having a Realtor for advice and to protect their interest. In a normal transaction every Seller commits to covering both parties Realtor/Broker fees upfront, before their home is listed through a Realtor. The one exception can be the FSBO. Some refuse paying a fee, putting the added burden of expenses back onto the Buyer. Now should the tactic work, the unsuspecting Buyer bites the hook, electing to forgo representation for themselves. Now, this FSBO has just reduced the chances of being exposed by a real estate professional.
Tactic # 3 May Not Disclose Known Defects
Always ask the FBBO for a Seller’s Disclosure Notice. If they say they do not have one, either obtain one online or if you’re being represented by an agent, she can provide one to them to complete.
If a FSBO says they will not pay a commission, the Buyer has 3 choices. You can walk away and look for another home. You can pay your agent’s fee yourself. Or, you can work directly with the FSBO.