If you’re reading this article, there is a very good chance you reside in one of the communities covered by the Community Advocate newspaper…all of which are experiencing a real estate “sellers’ market.”
If you own a home in the area and are thinking about selling, you most likely have considered trying to sell it on your own. It certainly makes sense considering you could potentially save thousands of dollars in brokerage fees. Before you make the decision of tackling a “FSBO,” however, I want to share this real-life scenario that might make you think again. All names have been changed to protect the privacy of those depicted. Dollar values are actual and provided with permission by those interviewed for this article.
Yul Besori was psyched when he received a full-price offer of $475,000 after his first open house. His wife Isle was impressed and promised he could buy a boat with the $24,000 he had saved them in commission. Mr. and Mrs. Besori promptly put a deposit on their lake home and would close on both homes the same day…eight weeks later.
“This couldn’t be easier,” Besori remembers saying.
After delaying almost a month to complete their inspections, buyers Sly and Red Foxx stated they were satisfied enough to sign a purchase and sale agreement and supply their second $500 escrow deposit. Besori was shrewd enough to know he could find the necessary form on the internet and have his cousin Ben Warned, the attorney, look it over for him…just to make sure he wasn’t missing anything. Besori states he and Isle were OK with the low escrow deposit.
“They were the nicest couple…reminded us of ourselves at that age and we wanted to give them a break.”
Two weeks passed and Besori decided to call the Foxx’s to see how their financing was going. He wasn’t concerned at all because Sly and Red were “prequalified” for $600,000 by one of those companies he had seen on TV. Sly indicated everything was great, they were giving the lender what they needed and that the Besoris should be hearing from an appraiser any day now.
Lo and behold, the appraiser called that afternoon and wanted to come out the week after next.
“Uh-oh,” thought Besori. “That’s the week we’re supposed to close.”
The appraiser said he could turn around the report in a day and they would still have five days to spare. Done. Being proactive, Besori decided to request a one week extension on his lake home closing which was granted.
Three days before closing, the appraisal came back at $440,000…$35,000 lower than the contract price. Unaware of their options, Mr. and Mrs. Besori agreed to take the hit and sell for $440,000. They would still make enough to buy that lake home….”and the boat,” Isle Besori said with a wink.
Thinking again he was being proactive, Ben Besori called the Foxx’s lender only to find out that the Foxx’s would not have their mortgage commitment for at least two weeks as there were “issues.” The Besoris were fortunate that the lake home sellers agreed to extend again, albeit reluctantly.
One day before closing, buyers Sly and Red Foxx called to say they were heeding the inspector’s advice and wanted the roof replaced or a $15,000 credit at closing. If this demand was not met, they were walking away.
“This is where we realized we were being duped,” Ben Besori confessed. “But we’re also not stupid so we reminded the buyers that their inspection phase had ended and that they risk losing their deposits.” Buyers walked. Sellers got a measly $1,000 in damages.
And it gets worse….
Since Ben and Isle Besori had also opted to waive buyer representation on the lake home, they lost their $20,000 escrow deposit. They had no idea they should have made the offer contingent upon the sale of their home.
Judy Boyle, REALTOR®
REMAX Executive Realty
Serving Worcester & Southern Middlesex Counties with honesty and integrity since 2003