Real NEastare: Can I trust a For Sale by Owner seller?

Q: I wanted to buy this house in Morrell Park that was “For Sale by Owner.” I was all ready to do it, but the guy said that I couldn’t have an agent or he would charge me $10,000 more for the house because he says he doesn’t want to pay an agent. My agent can’t do it for free, but said her commission is less than half of the extra the guy is charging me. So ultimately I’d be paying double just to have representation. Do you think this guy is trying to hide something by refusing my request to use my agent?

A: This “For Sale By Owner” seller is not exactly refusing your request to use a buyer’s agent, just making it more expensive than it has to be. Usually a person who is selling their home themselves is just trying to save money but it sounds like there’s more than meets the eye at play here.

You don’t know what is going on. Maybe this FSBO seller simply had a bad experience with a real estate agent, or maybe he really is trying to hide something. You could offer to pay for the agent yourself and see if that works. You’d just have to add that to your closing costs.

If you decide to go through with the sale without a buyer’s agent, you won’t know if he is hiding something or not, so you should take some precautions.

1. Have the FSBO seller fill out a seller’s disclosure document about the home. This is non-negotiable. It’s the law.
2. Pay for an appraisal and make sure you or your mortgage company have the right to get out of the contract it if doesn’t appraise for the price you agree to.
3. Require a home inspection and termite inspection that you’ll pay for. You’ll be able to find out mostly everything about a home with a report from a licensed home inspector.
4. Select the title company and pay for the title search and insurance to be sure you’re purchasing a property with a clear title and clear L&I report.

The paperwork itself can be complicated. If the FSBO seller is unwilling to deal with a real estate agent, tell him you’ll hire a lawyer to handle the transaction. If he does not want to deal with a lawyer either, I would be nervous. Especially in this market, for someone to turn down an offer just because the buyer wants to use an agent, it just doesn’t make sense.

Stacey McCarthy is a real estate agent with the McCarthy Group of Keller Williams. Her Real NEastate column appears every Wednesday on NEastPhilly.com. See others here. Read other NEast Philly columns here.