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John Kobeck Westchester & New York, NY
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How to Work Over a FSBO


Several years ago I came upon this article by "The FSBO Expert". It was basically a guidline on how to buy properties from FSBO's CHEAP and under the money. Its an interesting read, and gives a good insight into what a for sale by owner is up against in the real world:

 

The Call:

Search craigslist or better yet the local paper for a "for sale by owner " . In some trades they call this the "mark" . Keep in mind though in my story no one gets cheated, no one gets robbed and no one does anything illegal or even something they don’t want to do. It’s just about who comes out on top in a real estate transaction.

Will it be the "fsbo " or the buyer.?

Hi I ‘m looking at your ad for your home/apt building for sale, is it still available? Great it sounds interesting when can I see it.

...... That will be great but first can you tell me why your selling ?.....Oh I see..........

..........and then a little small talk, just to feel them out about whether they are telling the truth as to why there selling it. This is where the deal is made !! Is this my fsbo ? or do I move on to the next ad.

Personally I don’t care whether the price is good or bad or how much knowledge the person has about buying and selling real estate. The best deal I ever made was from a REALTOR who was selling an investment property as a fsbo to avoid having to pay their broker a commission.!!!!

I will try to visit the property right away so as to make sure this starts moving at the pace I want, not the FSBO . I call it the visit because I don’t want the seller to get the idea I may be seeing other properties, this game is all about wooing them. This is important, the seller must feel right from the start there in total control. " Wow this is just as easy as I thought it would be ,if he likes it all I have to do is call my attorney. I have plenty of room for negotiation any way".

The Visit:

When visiting a fsbo property it’s important to seem like you are playing it cool - not that interested - it’s a little overpriced - shoulders high, walk slow but determined, nodding your head but all the time giving off buying signals " taxes are reasonable" "I like the garage" " I’m not that familiar with this area but it seems nice " then comes the question every fsbo is waiting to hear........are you negotiable? This will be the last thing I will say to the buyer other than I’ll call you. This is where I have told them in my body language that I’m ready to pay almost full price!!! When I ask the question I start to drop my shoulders a little more to give them confidence to keep coming at me about how this property is priced right... as a matter of fact a steal at what there asking! I had better jump and jump fast or it could get away from me. I may have even set them up with a date five days in advance for a call back, now I’ll change it to three.

Big smiles, I can hardly contain myself as I head to my car. This is where the fsbo is really starting to walk two feet off the ground. They can taste it. There is an offer in the works and it’s going to be one the seller can live with other wise I have miscalculated or some one else is playing my game with the FSBO.........I like to work alone, so if someone else is in the mix I’ll probably move on. For the sake of your education I’ll continue with the same fsbo                                                                

The Offer:

The Offer is the easiest part of the whole process. I have never had a fsbo turn down my offer.....NEVER. Why? Its always a good offer! Even if it’s 10% below the asking price the seller knows what he should be getting for the home/apartment building. He is not stupid this is not about taking advantage of some old lady selling her home that her late husband bought 50 years ago. This is not a back and forth game of offers. This is a process about time, will power and emotion. I know I did this for 17 years.

Hi Mr. FSBO

This is the fsbo xpert in disguise, we met a few days ago about your property..... pause.... start to get nervous now...... I’ve given it a lot of thought and being as though blah blah blah blah (there listening only for numbers) I’m prepared to offer you $$$$$ for your property, do you want to think about it and get back to me? What - He wants to get off the phone your asking ? Yes this is the first time I’m going to start to play the "take away" something that will be an emotional roller coaster to a home owner but just a day at the office for the buyer.

And then the 7-8 day "three day" attorney review....

The Stall:

There are certain misconceptions about buying and selling real estate that work in a buyers favor when dealing with a fsbo. The two most common ones that any realtor will tell you is every house is sold as is, contrary to popular belief, which we'll get to later and the other is the 3 day attorney review. First of all the three days starts when both lawyers have a signed copy of the offer. Obviously if one party wants to slow it down they simply don't give it to there attorney that day. The best time to have your offer excepted by a fsbo is on a Wednesday. Before you can get your atty. to look at it is Monday. You have just bought a week at the very least maybe longer. although it appears this is moving along, about two weeks have gone by since your call to the fsbo and really nothing has happened other than you have convinced the seller to take the property off the market. The "agreed upon price" ? that’s subject to terms and conditions like inspections which won't take place for another 2-3 weeks, so we all sit and wait.................

The Inspections:

The inspections that you will do will always work in your favor, you've told the inspector what to look for in the property before he shows up so I almost never talk to the guy at the home. The owner is on guard for any tricks today so why play them out in front of him/her? The less you talk to the inspector the less the home owner does. I just play the novice today and say we will wait for his report and wait we will, and wait and wait............

The report we have waited weeks for finally arrives to your attorneys office not to you, obvious reasons now we have to get estimates on any repairs you get the drift and then negotiate again on price, right? Not so fast ,we can negotiate right up till closing on inspections and be sides we haven't gotten through the financing hurdle yet. Time frame from call to fsbo ? Try about 8 weeks but we have a closing day so if your seller hasn't pulled out ( which won't happen if your sincere about buying, which you are) then we can get a month out of that with delays of title work etc. and of course your still playing the inspection game as long as the fsbo ’s attorney will play, which can go on a long time - you’re running up his bill, digging your seller in deeper and keeping the home off the market. In other words wearing the fsbo down

The Revised Offer:

Now is the time to start taking a hard stance. If you’ve played this right its three months since "The Call". Has a buyer ever walked away at this point ? Yes, but usually to take the house off the market because they just can’t take it anymore, not to put it back up for sale. That’s what I love about a rental property, there never is a reason for them to pull out unlike a home where an offer on another house may have fallen thru, something you can't control. At this point you are clearly in the drivers seat if you want to play rough. I have never needed a property that I bought. That would be stupid on my part. I count on wearing the seller down and when I get to the table there is usually more money to be had . Have you heard of seller concessions..........

In closing let me say this, every property I ever bought was from a fsbo.... every property I ever sold was with a Realtor. Make sense?