FSBO (For Sale By Owner):  Should You List?
Sequim Real Estate For Sale, Port Angeles Real Estate For Sale, Homes and Land, Lots for Sale
What about commissions?  Discount Commissions?  Discount Brokers? FSBO Services?

When selling your home, you cannot afford a disaster, so this section focuses primarily on helping you, the home seller, avoid legal nightmares and get the job done right.  I attempt to do that with a true story.

Peter and Susan (not their real names) came to me because they had a little problem. They took turns telling me their story and often politely interrupted each other to clarify or expand on some relevant point. They sold their house on their own and did the "FSBO thing" as they called it. They had two friends who did FSBOs, and everything went great for them. They also bought some material on the Internet on how to sell your own home. Peter and Susan were both professionals, so they thought they could probably learn how to do everything. As the story unfolded, their sense of humility and embarrassment became apparent with their slouching postures and their halting and soft spoken language.

They had their house on the market for about six months, did many little ads in the local papers and a couple of Internet classified services. They put up some signs and a few postings on some area bulletin boards. They spent about $3,000 to do some cosmetic repairs in and around the house to make it marketable. They held three open houses, but eventually became uncomfortable with some of the aggressive questions they got from some of the visitors, and they didn't like missing Church on Sunday, the best time for open houses.

They did get three offers. When they got the first offer, they were excited and figured they had the house sold, because they agreed on the price. But when they got the written offer, the price was reduced by a substantial credit for new carpet and remodeling to the upstairs bathroom. The buyers also wanted all new composition shingles on the roof, and replacement of a section of a curtain drain. After almost four weeks of going back and forth, and growing tensions, the deal fell apart. The second offer seemed less exciting, and Peter and Susan wondered whether the Buyer was even serious, because he was single and wouldn't talk much about what he did for a job. He ended up offering almost $18,000 below their asking price, and they could not accept it.

The third offer involved a couple of counteroffers, and the Buyer had several contingen- cies, including approval of a loan with only 5% down, the Buyer's subjective approval of an inspection, and a thorough examination of the septic system by an expert, which the Buyer demanded Peter and Susan pay. One week before the designated closing date, the Buyer demanded a credit of $2,500 at closing for some repair work he said he would "need to make" on the septic system, although it was not clear what those repairs would be. Peter and Susan had an accepted offer on their next house, which was three hours away, and if they didn't close on their sale, they did not close on the purchase of their new home. That would create a lot of chaos for them and their children. As Peter and Susan talked about this, their emotions expressed how stressful all this had been for them, and the arguments they had at home as a result, which they felt bad about now. Peter apologized to Susan for how it had gone bad as they paused in their story telling, and I surmised it was not the first time he had apologized to his wife. There was clearly still feelings of guilt and sadness over the whole affair.

The reason Peter and Susan hired me to get advice was because the Buyer, who had been in the home for about a month at that time, was threatening to sue for misrepresentation and fraud, and told Peter and Susan that his attorney said he could get the contract rescinded and recover all his attorney's fees against them. Clearly these folks were stressed. They explained that they did not have a lot of money to spend on legal fees if this turned into litigation, because they had bought the new house and traded their old car in for a new
one, and the kids just started school, and their oldest needed orthodontic work.  They also had a past due Veterinarian bill, because their family dog had been injured on their recent move.

I explored the misrepresentation allegations with them and learned that the Buyer was claiming that the garage floor was cracking, and the crawl space under the house had standing water. Apparently, his attorney had also suggested he could sue for claims based on mold and mildew as a result of the moisture under the house. There were some other smaller claims that didn't seem to have any merit at all. Peter and Susan insisted that the concrete floor always had fine hairline cracks in it, and that they understood that was normal.  They also were adamant that there was never any standing water under the house as long as they lived there, which was seven years. The Buyer had given them no proof of any water under the house, but at this point the claims were all verbal and no lawsuit had yet been filed or served.

I went through the legal analysis and the costs and time lines for that kind of litigation, and that took most of the hour. I explained much of what is explained in my retainer agreement and the attachments. In summary, I would have to have a minimum retainer of $7,500, and the charges would be $175 per hour, plus costs (depositions, etc.) and expert witness fees. The case could range from several thousand to $30,000 or more, depending mostly on how the opposing attorney postured himself, how many motions and pleadings he generated and so on.

I also explained to Peter and Susan that it was unlikely the Buyer would win, and it was unlikely he would recover attorney's fees if he did win, but it was all still possible. I told them, and I still believe this, "You can be absolutely right in the facts and the law, and a judge can still rule against you." Flip a coin, and those are your odds. Having tried dozens of cases, I am absolutely convinced that is true. Unfortunately for all of us who treasure something called the "truth," the vast majority of judges are simply incapable of discerning the liar from the honest party. In the courtroom, apparently most judges have not figured out that the masterful liar will not hesitate to lie under oath and commit perjury (judges do nothing about perjury in civil cases), and at the same time will present the most incredibly believable lies, spoken with confidence and with a sense of humility. Meanwhile, the honest party takes the stand and isn't so slick, hesitates on answers, because he doesn't make things up, and sometimes says he doesn't know, because that's the truth. Judges who are rarely experts in real estate anyway, don't have a foundation of knowledge upon which to base a solid decision. As I've watched judges over the years in the courtroom, I am convinced that many judges make up their minds early in the case regardless of how the facts may ultimately come out.  Of course, they would all deny this to their grave.

Peter and Susan asked what most intelligent clients ask. "Well, if the judge makes a wrong decision, can't we appeal it and get it turned over?" The answer is yes, but the cost is another $7,500 to $10,000, and if they lost, they would stand the risk of getting even more attorney's fees awarded against them. An appeal also takes one to two years, which also means there would be a lot more stress to deal with.

Peter and Susan left the office grateful for my patience and for my explanations, but not certain what was going to happen and how they would respond. I heard months later by email that they settled the case with the Buyer by giving him a "refund" of $5,000. And life goes on. 

If I may add a footnote to this story, and I fully realize this will sound self-serving, but I say this absolutely convinced that what I am saying is true from 30 years of experience in real estate (20 as a real estate attorney, and now as a Realtor), finding a true professional Realtor who is knowledgeable, competent, experienced, and trustworthy could save you a  small fortune and lots of stress.  That's the truth. 

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