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For Sale by Owner – Buyers Beware

I recently had the unpleasant experience of dealing with a “For Sale by Owner” seller.  My buyer decided that we should look at a house that was listed in Longmont, Colorado. The Sellers representing themselves, paid a fee to have an agent enter the listing on the MLS system.  After viewing this home, my buyer decided she wanted to make an offer since the home appeared to be what she was looking for.  I cringed knowing that I would now be interacting directly with the Seller, although this shouldn’t be an issue, it was. I prepared the offer and submitted it to the Sellers, who then had tons of questions and their own opinions of Real Estate contracts and Real Estate Law. After several long phone conversations, I was able to educate these Sellers about the Contract and Contract dates and deadlines. We finally went under contract and my buyer was ready to perform her due diligence by getting the home inspection. As it turns out, this home had inspection issues, and had not been properly maintained. We submitted an Inspection Notice to the Sellers to correct many deficiencies. We also asked for documentation relating to radon, which the seller had in their possession. The Sellers refused to give us the radon documentation and refused to disclose the radon reading.  They also refused to correct most of the inspection items, claiming there were no problems and ignored the recommendations of our licensed Inspector. There were electrical issues, furnace problems, the roof had hail damage and there was much pet hair in the ducts and behind the appliances that needed cleaning. The Sellers refused to correct the inspection issues which convinced my buyer that she could not trust these people because they were not truthful and refused to disclose any adverse material facts about the home, such as the radon.

My buyer decided to terminate the contract based on the inspection and the fact that these Sellers were clueless, they had no representation and were making decisions based on emotions with no advise from a professional. The process of terminating the contract became ugly as the Sellers took offense to the Inspection Issues. They didn’t understand that the contract automatically terminates if no agreement is reached between both parties by the Inspection Resolution deadline.  The Sellers decided that I, the realtor, was wrong and that the contract was still valid.  Long story short, they finally came to their senses after several days and released the earnest money.  Meanwhile, the Sellers had re-activated their listing on the MLS system before they released my buyer from the contract.  

Does it really pay to sell your home without representation?  In the future, I will be hesistant to show properties that are not represented by an agent, it’s just too much brain damage and it’s not in the Buyer’s best interest. FSBO Sellers don’t know the laws and they do not have anyone to consult with. If I am representing the Buyer, I certainly cannot justly advise the Seller. In the long run, what is the Seller really saving?  Negotiations are much smoother with representation and agents can buffer all the emotions that go along with an offer and inspection issues.  An agent can make sure that Sellers are disclosing any information that pertains to the house.  In my example, we could not be sure that these  Sellers were disclosing all the information that was pertinent to this home and now that the house is back on the market, it would be interesting to see if these Sellers disclose all the problems that were uncovered during our inspection, my bet is they don’t because no one is monitoring their actions. Buyers beware, For Sale By Owners do not have any representation and should be treated with the utmost caution. A home purchase is a serious transaction with legal consequences and should be handled by a  licensed Realtor.

Tags: Tags: Buyers beware, buying a home, For Sale by Owner, FSBO, home inspection, home maintenance, inspection resolution, Longmont Colorado, real estate, Selling a home, Troia Team

This entry was posted on Thursday, June 11th, 2009 at 12:08 pm and is filed under Buyer's Corner, First Time Buyers, Home Inspections and Maintenance, Real Estate Tales, Selling Thoughts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

1. For Sale by Owner said at January 18th, 2011 at 7:33 am

   It is true that buying the house is not easy task. Agent creates too much frustration for both the parties by not disclosing the important point in dealing. so both of the parties don’t depend upon the agent and read every point deeply.

   Thanks

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