Must ask questions on a for sale by owner property

Question

Good afternoon BP family!  I've run across a couple of properties that I'm going to be making phone calls on.  I was hoping some of you experts out there can help me come up with a list of questions that should be asked when inquiring about an owners property besides the obvious.  These properties are for sale by owner and I was going to be asking the basics like what kinds of repairs, and inquire about their situation and why they're selling and how soon etc.  But is there a question that is off the radar for a newbie like me that should definitely be asked?  Thanks in advanced for all your input.

Fouad Hayek · Answer

Hi Belliny,

FSBO properties are typically an AS-IS condition type of deal as I am sure you know. The biggest question is the one you mentioned.. the motive to sell obviously. These sellers are typically opposed to having a realtor on either side of the transaction, so I would recommend you do all your homework on the bakc end by looking the property up on the county website to search for liens (yes always do a lien search) when purchasing a property especially FSBO.

I would ask about the neighborhood, who lived here before and for how long. Any easements on the property?

Main things mechanically and physically like roof age, furnace age and HWT age as well. I would also look under every sink and check for any leaks that you can see visually.

Those are my two cents! I am sure there are much more but these are the main ones.

Best of Luck!!

Fuad

Cameron Braig · Answer

Some good questions to help evaluate a deal can be; who lives here? what's the draw of the property? What impact did covid have? What unexpected items came up during your ownership? If renovations; what's the average turnaround time? Has the reno scope changed at all? What's the foot traffic like for info and tours? What's the average tenant lifecyle? Best of luck.

Charlie MacPherson · Answer

@Belliny Flores When you discuss asking price, you might ask the seller how they arrived there.

It is highly unlikely that they have done a good job with comps or even know how.  They're probably relying on Zillow or something similar, and those "valuations" are a joke.  A bad joke at that.

That's because none of the automated valuation tools have any idea about the interior condition.

Take two 3/2, 1800 sq ft ranches on 2 acres, both in the same neighborhood, both built in 1930 by the same builder.

One hasn't been updated since 1955, except for the shag carpet that was replaced in 1973.  It's dingy and dark inside.  The old windows are hard to open and are really small.  The surface on the old countertops has worn through to the substrate.  The old floors are worn down to bare wood in spots.  It has knob & tube wiring and galvanized plumbing.  The few closets that are there are tiny.  The electric service is 60 amps. The roof looks like it's already leaking.  The shingles are asbestos and are falling apart.  The furnace is at least 30 years old.

The other has just been gut-renovated with high end finishes and a new open floorplan.  Quartz counters, imported hardwood throughout, completely new PVC plumbing and 200 Amp electric, new mini-splits for heat and AC, beautifully finished basement.  New roof and siding.  You get the idea.  It's a mini-palace.

Zillow will give them the substantially same "Zestimate".  That's why they're a running joke with Realtors.

You would be better off paying a local Realtor out of pocket to run manual (not automated) comps.  When I was a Realtor it would take me the best part of an hour to do comps right, but that was because I drilled down deep on each property and took the time to do the job right.

In fact, you might want to pay that same Realtor to represent you so that you have someone to guide you through the offer, contingencies, inspections, disclosures and negotiations.

Good luck!

Belliny Flores · Answer

@Charlie MacPherson. Wow! That entire scenario was so easy to understand! Thank you very much for that.  That was eye opening. I always wondered abut that on zillow.

Belliny Flores · Answer

@Fouad Hayek I didn't even think about that, thankbyou so much! I'll definitely have to do some digging.

Must ask questions on a for sale by owner property

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