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The Truth About Buying A FSBO

by The Schuman Team

 

With limited inventory, buyers and their agents are scrambling to find homes for sale.

Homes listed "by owner" are a tempting option to buyers, but are they really a great choice?

 

BY OWNER - THE WHO AND WHY

To begin, the purpose of this post isn't to be negative about those who sell by owner. It is their right to do so and we respect that. We do want to educate buyers though on this segment of the market and what is means to them should they entertain buying a home listed by the owner.

Let's start with the basics: Someone who tries to sell their home without using an agent is termed a "FSBO ( pronounced Fizbo ) - For Sale By Owner".  It is legal for someone to do this and represent themselves in the real estate transaction.

There are a few reasons why someone would want to sell by owner. The main reason is to save money.  In the past, most "by owners" were limited in their ability to market, usually opting for a yard sign. Today, there are more options for them.

With the popularity of the internet, someone selling by owner now has the ability to advertise on popular sites, like Zillow. Therefore, it is not unusual for a buyer to see these types of homes listed for sale while doing an on line search. Most "by owners" are willing to pay a buyers agent who brings them an offer. 

A GOOD OPTION FOR BUYERS?

The problem is that most "by owners" are not overly motivated. Basically, they will sell if they get their desired price. Otherwise, they will likely just stay in their home. This dynamic certainly doesn't favor a buyer as they simply have no leverage here.

This situation leads to one where a buyer will likely have to overpay for a home, sometimes well above market value. 

Also, since most sellers lack experience dealing with the complexities of a real estate transaction, the process can be quite trying at times.  Buyers need to consider if it's worth overpaying and jumping through hoops for the right home.

THE FINAL WORD

In our personal experience, many of our clients who have purchased "by owner" have admitted to overpaying. However, they justified the price because they fell in love with the home.

There is nothing wrong with looking at a home listed "by owner" provided you have realistic expectations of the possible end result.

Solon Real Estate Market - Third Quarter In Review

by The Schuman Team

 

 

 

With the third quarter officially over,  we now have the data to complete our quarterly market report for Solon OH  for the zip code 44139, excluding Glenwillow.

First, we will provide market statistics for the past month of September. We will then offer a look at the third quarter as well as year to date statistics.  We will also make a comparison between this year and 2012 and give an analysis of the market as to where we are headed in the future.

Within the report, we will also include a breakdown for the Solon luxury home market  ( those priced over $500,000 ).

 

SOLD HOME STATISTICS SOLON OHIO

 

Date                                         # of homes sold         Ave. Sales Price             

September 2013                        24                            $281,150

September 2012                        25                            $318,575

 

Third Quarter 2013                     98                            $319,277

Third Quarter 2012                     99                            $320,052

 

YTD    2013                             240                            $306,681

Jan-Sept  2012                        200                            $306,846

 

SOLON LUXURY MARKET

Third Quarter  2013                    16                            $619,747

Third Quarter  2012                    16                            $652,219

YTD  2013                                37                            $642,255

Jan - Sept 2012                         31                            $639,426

 

*source NEOHREX ( Regional MLS )

 

COMMENTARY:

As predicted in our bi-annual report, we did see things slow down over the last few months, after a blistering start to the year. However, sales are still up a whopping 20% from last year and 2013 will end up being a great year in Solon real estate.

Overall,  the buyers who were looking to get into their new homes before the start of the school year dominated the market until July. Once school started, things have slowed down considerably. Why has this happened?

The slowing of the market is a result of low inventories, raising rates, and the lack of urgency of a typical fall buyer.

To begin, it was only natural that things would slow down. We saw some incredible months where homes were flying off the market and bidding wars were not uncommon. For a short time, we saw a sellers market in Solon, one we haven't seen for years. However, there are not enough nice homes to satisfy the demands of today's buyers.

I know what you're thinking, "doesn't low inventory drive up values?" Initially yes, this did happen through the first half of the year. The buyers who had a high sense of urgency to get into their new home ended up supporting higher values and quicker sales.

Now, the buyers left in the marketplace have a much lower sense of urgency. Sure they'd like to buy, but they don't have to do it now.  Therefore, the lack of available homes for sale is actually hurting the market even more than before.

Here's a perfect example: we have a buyer client who has 2 very young children and lives in another east side suburb. They would love to buy a home in Solon and have actually seen everything in their price point and just haven't found anything they love. They don't need to move now and are not willing to "settle" for a home that they only like, but not love.

The problem from a sellers' perspective is that the buyers that are left will only make a move for a great home or a deal.  Many homes on the market were originally priced a tad high to take advantage of the hot market. Now, the time has passed and many active listings now appear overpriced and outdated.

Add to this an increase in interest rates and things have slowed down.

Moving forward, sellers can take advantage of the lack of competition by putting their home for sale now, rather than wait until the spring.  Rising interest rates and an always uncertain economy may make now a better time to sell and buy a home.

Overall, we anticipate 2013 ending up to be one of the best years we have seen in real estate in a long time.

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Contact Information

The Schuman Team
HOWARD HANNA REAL ESTATE SERVICES
3550 Lander Road
Pepper Pike OH 44122
Dan: 216-346-3235
Amy: 216-403-9189
Fax: 216-456-2333