The 2007 FSBO Market
After five years of blazing hot real estate markets, the
2006 year was definitely a pull back. So, how is the 2007
FSBO market shaping up?
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.
For sale by owner house 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.
---Extract from "The 2007
FSBO Market"
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