Buyer Beware – Don’t Overpay for a Private Sale

Money House in Sky

There are a few things I see in the private-sale real estate market, time and time again. Sadly, one of them is that a lot of buyers are over-paying for property purchased via For Sale by Owner (FSBO.)

It goes something like this. The buyer comes across a FSBO listing and contacts the seller directly. They take a look through the property and it meets their needs. The price is within their budget and, since it’s a nice person and not some greedy real estate agent, surely the price reflects fair market value.

The thing is, often it doesn’t. Very often, in fact. And I know this because it’s all too common to encounter these same buyers a few years down the road, when they are looking to sell that very house – and they are surprised to learn how little their home has gone up in value. In reality, the problem isn’t that their home hasn’t increased in value; the problem is simply that they overpaid when they bought the property from a private seller.

How can you avoid that trap? In short, work with a Guelph Real Estate Agent who is experienced with buyers and who puts your financial best interests first. Then, and really only then, can you avoid the pitfall of overpaying for property.

When it comes to negotiating price on the purchase of a FSBO, there are three main things that distinguish me from the seller:

  1. I am able to access sales data, including comparable homes on the market, as well as those in the area that have sold or expired. This means I base my pricing recommendations using verified numbers, not just what someone ‘heard the house down the street sold for.’
  2. I analyze that data and make a series of adjustments that recognize the benefits (or drawbacks) of comparable properties. Did the ‘house down the street’ have more (or fewer) bedrooms or bathrooms, or other important features? How does each feature impact the value of the current property for sale?
  3. I adhere to a very strict code of ethics under which I am bound to protect my clients’ fiduciary interests. Private sellers don’t have any obligations to safeguard your hard-earned money in the negotiation process. I do.

To learn more about buying a home in Guelph, please feel free to contact me.

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