What To Know About FSBOs!

What is a FSBO?

It's an acronym for: For Sale By Owner and it's pronounced (fizz-bo)

As a new home buyer, it's important to understand the possible reasons that a seller is selling their property on their own as a FSBO. Here's a few:

• They may have little or no equity in the home and need to save money.
• They may have had a bad experience with a Realtor in the past.
• They may have sold property as a FSBO before and are doing it again.
• They may have plenty of time to sell or aren't motivated to sell.
• They try on their own at first, since their new home will take 6 months to build.
• They have a relative in the business, who's helping them behind the scenes for free.

Now as a buyer, it's important to have your buyer's agent approach the FSBO for information about their home. Your agent will also be able to find out if the FSBO is willing to compensate your buyer's agent (most FSBOs are willing to pay a buyer's agent's fee).

As a Realtor, I understand a seller's position of wanting to sell their property on their own. They have every right to do that. But you need to know that by attempting to deal directly with a FSBO without a buyer's agent, you don't have any representation assisting you in the transaction and helping you negotiate through the entire process.

I believe that having an experienced buyer's agent can save time, money or aggravation. There are so many pieces to the real estate puzzle in today's market that need to be solved before it can hopefully come together. There's also a lot of emotion involved on both sides of the transaction. Most buyers don't want to negotiate directly with a seller, because they don't want to be put in a potential, confrontational situation. The seller may also not have the appropriate state-mandated disclosure forms that are part of a transaction.

When you decide to hire a buyer's agent, it's important to find out how they handle FSBOs. Some agents won't work with FSBOs and so you're missing part of the market. They won't even tell you about them. In some cases, FSBOs can be as much as much as 10% to 15% of an area's inventory, but they aren't always easily identifiable, because they may only have a hand-made sign in the front yard and aren't doing any other advertising.

In closing, I look at FSBOs just like any other seller in the marketplace. They are just representing themselves. If they have a property that you want, then I'll do everything I can to help you get it.

At your service,

Dan

What questions do you have? I'll gladly answer them at: dan@danweis.com.

Tell a friend about my next Free Home & Condo Buyer Class - March 5th!

Are you ready to find your dream home? Contact me for a Free Consultation: (513) 615-1890 or dan@danweis.com

Viewing Homes In Adverse Conditions!

There's nothing like looking at homes on a nice, sunny day in the summer. But with homes and condos selling year-around, you don't always get the best weather conditions.

Like today, there's already snow on the ground and we're getting more snow right now. Does that mean you shouldn't view homes on a day like this? Well, you need to consider a couple of factors:

• Is it safe to drive in the current weather conditions?
• Will the property have its driveway and sidewalk shoveled? (Often times, not!)
• What things would you miss on a snow-covered roof?
• You won't get a good look at the exterior of the property and grounds.

If the weather conditions are harsh (below freezing and howling winds), it's easy to get distracted and not really focus on the exterior surroundings of the home.

The best time to view properties is during the day, especially in the fall and winter, because once you get to dusk, it's harder to view the property on the exterior and the interior has a different look and feel to it after dark than during the day.

So if you want to view a home, slip away during the lunch hour or leave work a little early at the end of the day. You'll have a better chance of getting a true picture of the property you're viewing.

If it's a brand new listing on the market, you'll also get a jump on all of the other buyers, who may be waiting until the end of the day or the weekend before they go look at it. That way, if you like it, you'll have a chance to make a bid on it before most other buyers.

At your service,

Dan

What questions do you have? I'll gladly answer them at: dan@danweis.com.

Tell a friend about my next Free Home & Condo Buyer Class!

Are you ready to find your dream home? Contact me for a Free Consultation: (513) 615-1890 or dan@danweis.com

Your Lender's Expertise Is Critical!

As the real estate and mortgage markets continue to recover, we are seeing more and more restrictions on lending to try and right the ship. One monster that started to surface way back in July of 2007 was the "Declining Markets" guidance sent out by FannieMae (Federal National Mortgage Association).

In short, FNMA began to notice in their massive data base that there are areas of the country that are seeing consistent declines in market value, yet they don't have a standard industry definition of what constitutes a declining market.

So what does this all mean?

Well, if your lender receives this message when underwriting your conventional mortgage loan and you are not putting any money down, you will be penalized. (An FHA loan is another option.) The lender must immediately lower the highest acceptable loan-to-value ratio by 5%. So, your 100% loan just became a 95% loan, no matter how you slice it. You may be out of luck when looking at conventional financing. One action that you can take to avoid the surprise of this scary, but protective rule is to have your lender run your file through the automated system before even making an offer. This way you will know up front if you will be dealing with this issue on this property regardless of sale price.

In the past, an appraiser had a little lead way in determining value. The appraiser may have been able to go slightly out of area or scope of time, but Not any more. While the following are always considered the best practice, they are now considered the ONLY practice.

These guidelines are not intended to be all inclusive and may differ depending on the lender. They should be viewed as the minimum requirements used to set the market value by using data for comparable properties:

• Must be within a 3 to 6 month period, with similar features such as square footage.
• Must provide days on market for the subject property and comparable sales used.
• Must be within close proximity of the subject property, looking at neighborhood character as well.
• Must be within a one mile radius of the subject.
• Must provide one current listing or pending sale from the Multiple Listing Service to help support value.
  

If any of these guidelines cannot be positively addressed or supported in the appraisal, the appraiser needs to provide a detailed written explanation of the circumstances.

There are a few other solutions. For example, FHA and VA do not have an issue with properties located in declining market areas. They leave the determination to those is the field that they trust, the lender and the appraiser.

The bottom line is that while this rule may cause some headaches, but it does not mean that houses can not be sold. It does mean that you need to make sure your lender is up to speed on these changes to assure a smooth transaction.

Getting pre-approved with a mortgage professional before you start looking at properties is more important than ever, because you need to decide which mortgage program will work best for you.

You also need to understand that mortgage guidelines can change even during your loan underwriting process, so don't be surprised if you are asked to provide additional information.

This post was co-authored by Dan Weis and Rick Pilger.

At your service,

Dan

What questions do you have? I'll gladly answer them at: dan@danweis.com.

Tell a friend about my next Free Home & Condo Buyer Class!

Are you ready to find your dream home? Contact me for a Free Consultation: (513) 615-1890 or dan@danweis.com

"Is This The One?"

As you look at different homes, you're always wondering "is this going to be the one"?

"Is this the home that I'll fall in love with and live in for many years?"

Whether you've looked at 5, 10, 20 or more homes, you'll always wonder if you're picking the right property for you.

One of the ways to help you compare is to set up a rating system. On a scale of one to ten, how do you rate each home?

I always tell clients anything less than a 5 means 'run away'. If you pick the numbers 6 or 7, it means that the property is ok or nice, but if someone else bought it tomorrow, you wouldn't be upset. If you rate a home an 8 or 9, that's one you should seriously consider making an offer on.

Also, it's okay if your spouse, significant other or friend disagrees with you by putting a different number value on the property. You each have your own opinions and you need to talk out what's the most important to each of you. All properties have pros and cons to varying degrees, so don't let that stop you.

By the way, I haven't seen a 10 yet. You may think the home you're choosing is a 10 and that's fine, but no home is perfect.

Another factor you need to consider is there's more than one home that's 'right' for you, because if you're looking at homes right now or you decide to look at homes a year from now, the same homes are not going to be for sale on the market. (At least, not usually unless there's something seriously wrong with them.)

So you need to consider the criteria that's important to you as you go through different homes and see what best matches what you want in a home.

I've told clients that many times the right home will "smack them in the face" when they pull up out front or walk inside. You'll know it in your gut when it's the right one for you. You'll go "WOW"...this is it!

At your service,

Dan

What questions do you have? I'll gladly answer them at: dan@danweis.com.

Tell a friend about my next Free Home & Condo Buyer Class!

Are you ready to find your dream home? Contact me for a Free Consultation: (513) 615-1890 or dan@danweis.com