Understanding "For Sale By Owner" (FSBO) Transactions

Let me tell you a story about the Greenleaf family.

They are a young family who relocated to Shaftsbury, VT a few years ago.  Mike manages the local Home Depot.  Alex is a stay-at-home-mom raising their two little kids.  

Sometimes Renting Makes Sense

Relocation is very common for managers in corporate America... so renting seemed like the best option to keep themselves poised to move if and when the time came to transfer again.  The Greenleafs found a rental in a great neighborhood and got their daughter settled into the elementary school. Everything was going smoothly.  

Then their landlord decided they wanted to move back into the house.  This was a big curveball for Mike and Alex, but they were given 4+ months notice, so they calmly started looking for a new rental.  The trouble was that the pandemic put a squeeze on the already tight rental market in Shaftsbury.  

A Tough Rental Market

They were open to other areas, but ideally wanted to keep their daughter at the same school.  Mike and Alex have owned homes before, so they decided to explore the option of buying a home, instead of renting.  They connected with me, and I referred them to a couple of my preferred lenders. They got prequalified, and we started house hunting.  They quickly found a couple of homes that fit their wish list, and an offer was submitted... along with the offers of a dozen other hopeful buyers.  Sadly, theirs was not the winner.  

Sigh.  

Another awesome property came on the market that got them excited... After waiting a few days for the seller's decision, they got the bad news again... the seller had accepted another offer.  UGH!  

Now it's getting down to crunch time... only 2 months left in the lease.  The Greenleafs realized that every home they wanted would also be desired thus they’d have to compete with multiple offers, many of which were cash or had better terms.  

“For Sale By Owner”

One night, they took a drive, looking for hope and inspiration.  They stumbled on a For Sale By Owner (FSBO) sign a few blocks from their current home.  They reached out to us for more information.  After what felt like an eternity (it was just a few days!), the Sellers returned our call and agreed to cooperate and pay the Buyer's Agent fee at closing... so we booked an appointment.  

At this point, I brought in Erika Floriani to work with the buyers.  She met them and the sellers at the house for their initial walk through.  The sellers revealed we were the first and only showing.  

In this hot market, we could not believe they hadn’t gotten 100 calls.  It really is a perfect example of why FSBO is not the best marketing strategy… with limited exposure, they simply did not get the inquiries they would have received by working with a Realtor who participates in the Multiple Listing Service (MLS).  The MLS is the database we use to search for available homes for our buyers, as well as pull data from pending and sold listings.  But, I digress!

We quickly crafted an offer, along with a comparative market analysis (CMA) to show the sellers the data to support our offer.  Fortunately, their offer was acceptable to the sellers, and down the path we went.  Inspection was easy; nothing major came up.  Appraisal was our concern, as the comps barely supported this price—but it came in right on the money!  

Although there were some bumps along the way, the transaction closed on time... and Buyers and Sellers were equally grateful.  Both parties walked away feeling like they got exactly what they bargained for.  We were proud to broker this deal, and got the Greenleafs moved out of their rental before the homeowners were knocking on the door!