This recent article shows another example of a FSBO nightmare. Houses have issues. New construction or a 100 year old home. It doesn’t matter. Look at this example of one way that FSBO can have long term effects.
From the article
Both buyers and sellers have problems relating to For Sale By Owner issues.
For sellers, the largest issue seems to be properly disclosing all relevant items to satisfy the liability issue. There are resources available, but the question is whether the you took proper advantage of them and made all the legally required disclosures on any issue with the property there may be. If you have an agent that fails to do this, you can sue them. If you are doing it yourself, the only one responsible is you. You are claiming to be capable of doing just as good a job as the professional, and if you didn’t do it right, the buyer is going to come after you. You have all the legal liability.
Let’s say it was something fairly innocuous, like seeping water from a slow leak you didn’t know about. A couple years pass, and now there’s mold or settling. Perhaps the foundation cracks as a result of settling. Bills are thousands to hundreds of thousands of dollars. Your buyer goes back and finds that your water usage went up by fifteen percent in the six months before the sale. He sues, saying that even though you didn’t know, you should have known based upon this evidence. Court cases are decided based upon evidence like this every day. A good lawyer paints you as maliciously selling the property as a result of this. Liability: Steep, to say the least.
Now, let’s look at it from a buyer’s prospective. You have a choice of two identical properties. In one, a seller is acting for themselves, in the other, they have an agent. The price may be a little cheaper on the for sale by owner one, or it may not – usually not. The most common reason people do for sale by owner is greed. But when I’m looking at a for sale by owner, the question that crosses my mind is “Are they rationally greedy, or are they just greedy?” Are they going to disclose everything wrong or that may be an issue with the property? At least here in California, the agent has pretty strong motivation to disclose if something is wrong that they know about. If they don’t, they can lose their license, and even if they don’t, they have potentially unlimited personal liability. If they did disclose, they’re probably off the hook, and even if they aren’t, their insurance will pay for the lawyers, the courts, and any liability. If there’s one thing all long term agents get religion about, no matter their denomination, it’s asking all of the disclosure questions.
This is not the case for many owners selling their own property. Some are every bit as good and conscientious as any agent. A good proportion, however, are intentionally concealing something about the property. What’s going to happen when it comes to light? If there’s an agent, there’s a license number, a brokerage who was responsible for them, and insurance. The latter two are deep pockets targets for your suit, and you can find them. Once that owner gets the check, you can find them unless they’re dead, but they may not have any money. Even if they do have money, it may be locked up and inaccessible via Homestead or any number of other potential reasons.
It’s always a good idea to have a licensed Realtor in your local area to handle your real estate transactions, so you can avoid problems with the property in the future.
If you ever have questions about home inspections or pest control, feel free to give Kevin or Jeff a call at 225-753-8114, or email us at firstname.lastname@example.org, and we’ll be glad to help.
To view the entire article click here: http://www.fsbonightmares.com/fsbo-nightmares/failure-to-disclose-problem-fsbo