Oct 5, 2008

The 'For Sale By Owner' Scam

Sellers sometimes stick a "For Sale by Owner" sign in their yard to try selling their property without an agent. These unrepresented sellers are easy targets for con-artists, thieves and people just looking to take advantage of them. Usually they end up listing their home with a Realtor. Sometimes they call me to help. They tell me that they are in MLS (the Multiple Listing Service) with a company that lets them sell their home themselves.

Whoa! We have to stop right there. If a home is in the MLS - it is represented by a broker (whether the seller realizes it or not). That broker may be charging you a flat fee, but they are your representative and I can't get involved in your agreement with them.
There are plenty of discount brokers who target unrepresented sellers to list their FSBO property on the MLS for a fast buck. But be warned! When you, or anyone, goes on the MLS you must have a legal contract to be represented by a broker and you agree to pay a commission to a buyer’s agent – usually 2.5% to 3.5% of your sales price. You are usually required to pay for all advertising, photography, marketing, and an array of miscellaneous fees at closing.
There are many legitimate Realtors who focus on listing homes that are currently FSBO. They contact these unrepresented sellers in hopes of listing their property. But some 'companies' operating under the guise of discount brokers or mortgage companies are really scams. They usually want to sell you something else - something that you'll pay for regardless of if your property sells. Some use your home to attract buyers, so their agents can intercept the potential buyers and then sign on as their buyer's agent. Mortgage companies may approach these sellers to place a sign in their yard offering to finance the property. They are simply looking to pick up clients and will finance an array of other properties (that are easier to close than an unrepresented seller).
I really hate to see people taken to the cleaners. For tips on how to avoid being ripped off in the selling process, go to my website. Be wary of people who contact you about selling your home. Make sure all expenses to you are in writing. Don't let them use your home as a free billboard for their business.
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1 comment:

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Angelo H