The 2007 FSBO Market



Ah, the good old days. From roughly 1999 through 2005, selling your home was about as easy as it has ever been. With interest rates on home loans at historic lows, money was flowing into the market like a tidal wave. Throw in unique hybrid mortgage loans and you practically had a stampede of buyers throwing offers at sellers. This was true even when asking prices had little reflection of the then current home values in a neighborhood.

In the FSBO real estate market, things were just as hot. ?FSBO? means homes for sale by owner without a real estate agent. With so many buyers out there, sellers decided they really did not need to pay tens of thousands of dollars to real estate agents when buyers were practically beating their doors down. Simply put, the FSBO market had never been so good and FSBO sellers were pocketing tremendous profits As you know by now, 2006 say rates rise, demand fall and a general real estate market pull back.

So, what is in store for the 2007 FSBO market? Overall, the real estate market is expected to be stagnant at best in 2007 if not worse. One general trend that is expected to pick up is the foreclosure market. The heyday of real estate say a lot of interesting loan packages put together. Those loans offered great terms in the first few years, but evolved into nasty financial beasts after three to five years. Most buyers thought home values would continue to increase, which meant refinancing to a more traditional product would be possible. Unfortunately, home values are actually dropping in many markets, which means homeowners are in a bind. Ironically, this situation should make for another hot FSBO market.

FSBO markets are hot when there is either a lot of demand or a large group of sellers get distressed. In the case of a distressed seller market, there simply isn't anyway to afford paying a real estate agent ten or thirty thousand dollars in commissions. To get out of a bad mortgage, one must sell. With reduced home property values, this simply can't be done if you figure in the realtor commission. Although leverage has definitely moved to buyers, the FSBO market will be the place where many homeowners get out of bad financial situations.

At the end of the day, there are very few people that expect 2007 to be a positive year in real estate. If you are in the unfortunate position of being in a bad home ownership situation, selling as a FSBO seller may be the way to get out of it.