On a follow up call with a mortgage banker friend of mine the other day in Vancouver, Washington, I asked him about a couple who he had referred me to a month or so back. To protect their identities, I will just call them the Jones family. At the time, they were in search of a new home in the Vancouver, Washington area. They did the right thing and contacted a lender (my buddy) to find out how much they would qualify to borrow and to get pre approved before they started their search. He learned that they didn't have a real estate agent yet and he referred them to me. I spoke with them once and they told me that they had already found an agent who was working with them to find their new Vancouver, Washington home.
That was the last that I had heard from and they cut off contact with my lender friend for a little over a month. Then, one day out of the blue they returned his call and told him the great news; they had found the perfect home, made an offer, and were in a contract. Best of all was that they did it all by themselves without the aid a real estate agent. My friend congratulated them and then asked them why they didn't use an agent.
Mr. Jones gleefully told him, "It is a for sale by owner and they wanted $350,000 for the house. We got it for $330,000 because we didn't use an agent! We saved $20,000."
When my friend asked if the seller was paying any closing cost, they responded, "No, it is a great deal without them paying closing costs."
Here is the summary of what happened: The Jones family found their perfect Vancouver, Washington home which was a FSBO. The owner wanted $350,000 but told them he would accept $330,000 if they didn't use a real estate agent. They took it "hook, line, and sinker!" Good thing there was a bank involved because two weeks later it only appraised at $308,000. Mr. Jones, being the STELLAR negotiation expert that he is, convinced the seller to bring the price down to $315,000 and asked the bank to reappraise the property. They pointed out to the bank that the home had a new roof, fresh paint, and a remodeled kitchen with granite counters. The buyers had a 20% down payment so the appraiser squinted his eyes really hard and stretched the value to $314,000 which the seller accepted.
After hearing the story, I comp'd the home myself. The appraiser wasn't squinting to get that value, HE WAS BLIND! That Vancouver, Washington dream house wasn't worth one penny over $304,000!
Not only did they over pay by at least $10,000 but they never even asked the seller to contribute to their closing costs. In this market, how could buyers ever fall into this trap?
Photo credits:
Castle - Magda
FSBO - Casey Serin
When you choose us to handle your Vancouver Washington real estate needs, you choose a team of realtors® who care about you and your family. Buying or selling a home is always more enjoyable when you work with professionals who will listen to your needs and who will work together with you to achieve your objective. We are very familiar with all types a real estate in Clark Countyand we specialize in Vancouver, Ridgefield and Battle Ground. We are also very experienced with new home and custom home construction having assisted several local builders in selling new neighborhoods in the Vancouver Washington area. Additionally, we have helped numerous families build their own dream homes. We are dedicated to helping you make intelligent, informed decisions and to providing you with exceptional service.
I see that all the time in Leavenworth. My feeling is that in FSBO situations, 9 times out of 10, someone in the transaction is getting a great deal and someone else is getting taken advantage of.
I did a market analysis for a home in Leavenworth a few years back and the home owners were not impressed with my realistic price, so they through a FSBO sign in the yard and added $100,000 to the price. I guess they were right because it sold.
A couple from out of town came and paid cash. No APPRAISAL!!! I hope they don't plan on selling in the next decade because it won't be worth what they paid for it.
(Of course the sellers made the right decision and found a sucker)
Oh, that is such a shame and I hear it time and time again and I've even wrote about it myself. I just don't get people's logic. It happens even more when they are using Owner Financing, because 90% of the time without a Realtor, they never get the home appraised and then they don't find out they overpaid until the do a refinance 4 or 5 years later.