In another indicator that the crazy "sellers market" of the past two years is over, Redfin reports a record number of Sellers gave concessions to their buyers in the fourth quarter on 2023. What does this mean for For Sale By Owners in January 2023? Well, you can probably not expect to see multiple parties bidding (and over-bidding!) for your home. You can also probably expect to be asked for some sort of concession at closing. A Seller concession is simply something you, as the Seller, agree to compensate the Buyer for. Sometimes it means you perform a repair they ask for. Sometimes it means you take some money off the price to help pay for their closing costs. Your Buyers may ask for a credit for a new roof, or ask you to fix some repairs that come up during the home inspection. They may also ask you to credit them back some money towards closing costs. Although these kinds of asks were virtually unheard of over the last two years, this study is another indicator that things are returning to more of a "normal" level.
So as a FSBO, how do you deal with these shifting dynamics in the real estate market? Firstly, remain calm. Take a breath. Understand that Buyers asking for concessions from their Sellers in actually pretty common, just not so much over the past couple of years. If you have only one single offer, it's probably best to consider what your Buyers are asking. Work with them. Keep in mind the money you are saving by selling For Sale By Owner. When factoring this into the equation, are you still ahead of the game? You also don't have to say yes to everything your Buyers are asking for. The risk is that they walk away from the transaction. In an ideal situation, you have more than one offer and that will shift the power of negotiation back to your corner. Did you do a pre-listing home inspection? Are some of the things your Buyers are asking you for come up at the initial home inspection? If your Buyers were aware of these "issues" before making the offer, their offer should be reflective of these conditions. Most importantly, do not be insulted or offended if a Buyer asks for a concession. This is normal, and although it kind of went away over the last couple of years, the market is indeed shifting and the "new normal" includes a return to Seller concessions. At the end of the day, you will mentally establish a point that you feel is fair. If what your Buyers are asking for exceeds this point, you're not going to feel good about the transaction. There will come a point when you start to feel taken advantage of by your Buyers. That's usually when it's gone too far. Thoroughly study your net sheet, factoring in the different scenarios. As a For Sale By Owner, one who is saving substantial amounts of real estate commissions, are you still walking away with what you feel is fair, even with some Seller concessions? Then go for it! If not, it may not be the right Buyer for you.
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AuthorField Notes from the FSBO Sherpa. Helping guide motivated, DIY homeowners through the For Sale By Owner journey, one real estate transaction at a time. Archives
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