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How to not get Scammed as a FSBO

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***DISCLAIMER***Your Homes is generally one of your largest financial assets, therefore you are risking your financial future by being a For Sale By Owner.

So I recommend you hire a real estate broker and or talk with an attorney plus an accountant.

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Buyers● Careful Who you let into your home● Do you know who they are, have they proved it?

○ When they are working with the right real estate broker, the broker has qualified them and knows them.

● Can they Afford and Qualify for the property?○ Proof of Cash Funds to Close○ Pre-Approval Letter

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Buyers● Do they have a home to sell?● Are they currently in a lease?● How long have they been looking?● Are they coming to FSBO just for a deal?

○ Otherwise they may just go to more professional process where they are more protected.

○ What is their expected discount?● Do the buyer’s currently have a buyers agent?

○ Are you willing to pay a Buyer’s agent commission?

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Buyers● What is their level of motivation to Buy a home?● Are all the decision makers present?

○ For the 2 items listed above the thing to understand is that Buyers will waste a lot of your time so you need to understand if they are motivated to actually Buy and if the people who are coming to see the homes are the ones that can decide to purchase it.

○ Especially true if the funds for the Buyer’s down payment are coming from a relative.

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Investors● Why do they want to buy your home?

○ Seriously, this is a really good question. Why?● Invest = verb - to commit (money) in order to earn a

financial return. ● What is an Investor’s Goal? ----> MAKE $$$$

○ How are they making money on YOU?○ What are their Future Goals and Plans?

Working with Investors is fine you just need to make sure you are not being taken advantage of.

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Watch Out For / Scams / Issues● Buyer’s Agents, Buyers and Investors DO NOT

represent your best interests.○ Who is making sure your interests are represented?○ They don’t owe you the same level of care,

knowledge, expertise, insight, and responsibility that your own representation would.

● Real Estate Contracts are only enforceable when they are in writing. Verbal = Nothing. You can’t rely on someones word, get everything in writing.

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Watch Out For / Scams / Issues● If they are paying cash, then CASH = Discount.● Do not accept cashiers checks or money orders.● Always require proof of funds or approval letters.● All transactions should close through a regular Escrow

Company, Title Company or with an Attorney.○ Do not sign or execute closing docs, loan docs,

deeds, etc. if not at escrow, title or attorney.■ This is an area where there is huge potential to

be scammed.

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Watch Out For / Scams / Issues● People posing as Buyer.

○ Casing your home to steal from you■ Valuables■ Collector Items■ Electronics■ Tools■ Prescriptions■ Guns■ Your Identity, Loved Ones and Pets.

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Watch Out For / Scams / Issues● Don’t allow an early occupancy

○ If they get in and establish themselves then will have to evict them.

● Don’t allow the assignment of the contract.● Don’t allow enormous over market commissions.● Don’t allow Lease Options.● Don’t allow First Rights of Refusal.● Don’t allow control of your property for no money.

(I am over generalizing here, there are always special exceptions)

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Watch Out For / Pricing Issues● How are you establishing the Price?

○ Zillow Sucks / Trulia Sucks / TruZillia Sucks○ Tax Assessment sucks○ What your friend says it worth sucks○ What you want sucks○ What you owe sucks○ What you think its worth sucks

Get an Appraisal, Broker Price Opinion or Current Market Analysis to have the price professionally established

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Watch Out For / Scams / Issues● Contract Issues

○ Long Inspections and Feasibility Studies○ Get-Out-Jail-Free Clauses (Not Monopoly)○ Subject to Clauses○ Unrealistic Timeframes○ Contingencies○ And Or Assigns○ Contingencies with Long Time Frames○ Auto Terminations○ Auto Extensions○ Always in writing. No verbal deals.

Watch Out For / Scams / Issues● Lack of Exposure to the Real Estate Market

○ Not Allowing you to achieve the highest price. ○ More Contingencies in the offers you receive.

● Paying to be Listed on MLS.○ This alone is not enough.

■ You need to create a full marketing plan.● According to NAR, FSBOs typically sell for 13% less on

a National Level then a home listed with a Broker.● FSBOs and unrepresented real estate transactions in

our state represent a high amount of the current litigation in our court system.

Contact UsCall US Today at 425.249.0214

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