Teresa,
I am so upset! I was selling my home For Sale By Owner and finally after seven months trying to sell it, I find a buyer and now my buyer just backed out of the deal. This widowed lady could not get the financing and decided to sell her home first and then she decided to buy a duplex instead of my house. And she tried to tell me she has never bought a home before! I was asking $265,000 for the house, It was appraised at $240,000, and I thought, oh lucky me! But now this happens. I still have the $500 deposit and wonder if I should give it back? The buyer keeps calling me and asking me where her money is. What do you think? I feel I should keep that money. She thinks I should give it back. I think she could have afforded the house after she sold her home, I could have waited for her. What do you think?
Dear Marj,
We see issues like this often with For Sale By Owners. Selling your own home can become a complex issue, and that is exactly why Realtors were invented. Let me highlight a few issues:
#1 Financing institutions only finance the appraised value of a home. If the price is more, the buyer will have to pay the difference, unless the contract between you two has a financing contingency. If it does, then the buyer has an "out" of the contract, and buyer gets her earnest money back. If there is no financing contingency, then the buyer will be breaking the contract and the earnest money deposit is yours. I don't know what kind of contract you used. Read through it and see what it says. Realtors use a contract that is made by the state. It covers all possible issues that might arise, protecting everyone from possible law suits. Take your contract to a real estate lawyer and let him/her advise you on this situation.
#2 Many FSBO are overpriced. The buyers over-inflate the property's value. You should have done your homework first by getting a professional appraisal before placing your home on the market, or by having a Realtor conduct a Comparative Market Analysis on your home. You would have saved yourself this problem. By doing so, you would have asked an honest, fair price had you priced your property at the appraised value.
#3 I feel for you, trying for seven months trying to find a buyer for your home. Selling a home on your own is not easy! You are finding yourself allowing unqualified strangers into your house, having to adjust your lifestyle to be available at all times to show your home, playing phone tag with interested parties, paying out money for advertisement in the newspaper, and making yourself compete against all the Realtors in your area. I am surprised you have lasted seven months. Most FSBO give up sooner and hire a professional to handle this major endeavor.
#4 I feel for your buyer. It doesn't pay to be ignorant when it comes to real estate buying. I cannot stress more, the importance of Buyer representation. Your buyer was a widow and said she had never bought a property before, although she has a property to sell. I believe your buyer was saying, she has never bought a property "on her own" before. Her husband, now deceased, probably handled all the property purchases in the past. Buyers who have never bought a home before on their own, should NEVER try buying without the aid of a professional, who will look out for their best interest. If you want to buy a FSBO home, hire a Buyer's agent (go to any realtor office to find one) to assist you. It will be worth your time and money and keep you from possible law suits.
I hope this helps!
If you have questions or concerns to submit? I would love to hear from you.
