Fsbo - an Option?

By: Abhinav Sidana
While all literature out on the net, outlines the various advantages of FSBO, this one takes a different view. Based on the current state of the economy, FSBO will no longer be seen as an alternative to sell a home, but the only option available to sell a home for most people. This article lists why FSBO will slowly but surely move the real estate agents towards extinction

Reason 1: Liquidity

Many homeowners have limited liquidity today. There are many of them out there who are staring at foreclosures. These people are forced to sell. If they go the broker route, they have to shell upto 10% commission, which they cant , due to the liquidity crunch. If they manage to get a good price, then they definitely want to avoid the tax liability arising out of a real estate short sale. Hence the liquidity crunch among the homeowners will drive them to FSBO.

Reason 2: Failing to qualify for refinancing

There are many home owners there who are stuck with adjusting sub prime loans. Many of them would want to re-finance their homes using the new FHA-Secure refinance scheme. But the irony is that they may not qualify for this. Once their mortgages get adjusted, they realize the hard way that they cannot afford the home and hence cannot refinance. Such people have only the FSBO way out.

Reason 3 : Strict and tightening underwriting standards

Underwriting standards are getting tougher and stricter as time proceeds. The appraisals start coming in short or will get cut by lenders. Most of these sellers will sell FSBO so that they can maintain the net proceeds by eliminating the brokerage commissions and still dropping the price and getting a sale.

So..when are you going to FSBO your home?

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