“Appraisal Challenges and the FSBO”

“Appraisal Challenges and the FSBO”



I could see it coming from the minute I spoke to the buyer. He shared that they were purchasing a home that was being offered directly from the seller. The property had been on the market for a couple of years. My immediate question was why was it on the market for so long? Usually the one main reason is price, (overpriced that is).


I took the mortgage application and knew the client would have no issues getting a mortgage. I asked him, what if the appraisal comes in below the purchase price. Even though he didn’t see that happening, I did. Sure enough that is exactly what happened. The appraised value came in $16,000 below the agreed upon price.


After a couple of weeks between buyer and seller conversations, they made an agreement. My client is paying $10,000 less for the property and coming up with $6,000 more toward the down payment.


I cringe when buyer and seller are not represented but that is what some do thinking they make out better but I never understand how. Two years on the market? How can that possibly be a smart move for any seller?


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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com



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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

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Comment balloon 23 commentsJoe Petrowsky • November 25 2015 06:25AM


Yes, this is a perfect example of being penny-wise pound foolish.  That's a lot of wasted time for the seller.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) over 4 years ago

Exactly Joe.  Even I tried it for 60 days with no one being interested.  I went ahead and listed it on the MLS and within another 60 days we were packing.  FSBO may work for some people some of the time but all in all most everyone wanting to sell needs representation..

Posted by James Dray, Exceptional Agents, Outstanding Results (Fathom Realty) over 4 years ago

Good morning Joe. No understanding of the time value of money may be a good reason for a seller to be hard nosed. Enjoy your day!

Posted by Wayne Martin, Real Estate Broker - Retired (Wayne M Martin) over 4 years ago

It was not smart of either of them....and unfortunately some people only leran ...or do not...from experience.

Posted by Sally K. & David L. Hanson, WI Real Estate Agents - Luxury - Divorce (EXP Realty 414-525-0563) over 4 years ago

And, I'm guessing this seller will brag about what a great job he did selling his home on his own.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) over 4 years ago

Hi Joe.  Dumb, dumb, dumb buyer.  Why pay more than it is worth?

Posted by Conrad Allen, Webster, Ma, Realtor (Re/Max Professional Associates) over 4 years ago

Good morning Joe,

As they say a fool and his money are soon parted!

Happy Thanksgiving to you, Gail and the family.

Make yourself a great day.

Posted by Raymond E. Camp, Licensed Real Estate Salesperson Greater Rochester (Howard Hanna Real Estate Services) over 4 years ago

Good morning Joe,

Hopefully this purchase will not be one they regret...

Wishing you and yours a Happy Thanksgiving my friend!


Posted by Lisa Von Domek, ....Experience Isn't Expensive.... It's Priceless! (Lisa Von Domek Team) over 4 years ago

Joe - it really isn't a smart move.  The seller ended up paying as much and have two years of aggravation.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) over 4 years ago

This is a very good story to share. It is easy to make mistakes during a home purchase.

Happy Thanksgiving!

Posted by Roy Kelley (Realty Group Referrals) over 4 years ago

That seller is lucky that the buyer was willing and had the extra cash to pay $6,000 above the appraised value. For the seller, why put yourself through that for 2 years but there can be reasons? I don't deal with FSBO's, because there are often a whole lot of other things that the seller feels he can do better such as upgrades in the home without using a licensed contractor, no building permits, etc.

Posted by Hella M. Rothwell, Broker/Realtor®, Rothwell Realty Inc. CA#01968433 Carmel-by-the-Sea over 4 years ago

Joe you are right the Buyer always seems to think they are getting a deal by eliminating the Realtor.  But as in this case they did not get a deal, they are over paying for the property, and that is just the beginning to the adventure that is to come.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) over 4 years ago

This is always a concern when sellers think they know how to value their property.  Glad it is working out.

Posted by Belinda Spillman, Colorado Living! (Aspen Lane Real Estate Colorful Colorado) over 4 years ago

Hi Joe,

I always explain to Buyers that we work for FREE with them.  Then we explain how we can help them SAVE money by working with us.

Posted by Wayne and Jean Marie Zuhl, The Last Names You'll Ever Need in Real Estate (Samsel & Associates) over 4 years ago

My guess is that one or both of the parties depended on one of the popular online valuation models. Fortunately they were able to keep the transaction together once they had solid data.

Posted by John Novak, Henderson, Las Vegas and Summerlin Real Estate (Keller Williams Realty The Marketplace) over 4 years ago

That seller could have saved a lot by using a real estate professional. Two years on the market cost the seller extra money in taxes, insurance and upkeep, ect. It also kept the seller from moving forward with his/her plans. Neither the buyer nor the seller came out ahead in this deal. 

Posted by Debbie Laity, Your Real Estate Resource for Delta County, CO (Cedaredge Land Company) over 4 years ago

Joe Petrowsky Just a quick stop to say hello and hope you had a very nice day,  Happy Thanksgiving.

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) over 4 years ago

Hi Joe Petrowsky 

I just struggled with sellers who want top dollar over the MLS comps and decided to sell it themselves. It will take a long time to sell though it has some nice upgrades. FBSO's do not realize the liability they are putting themselves in. They might save $25,000 but in a year or two find a judgement against them for $300,000+. "I didn't know I had to give them that document or disclose that". I have read so many articles where people regret their actions. In your client's case, it is too bad they paid too much for their new home and the seller would have been better to have moved 2 years ago.

Posted by Kristin Hamilton CA Realtor, (909) 557-6966- Specialize 55+ Communties Banning (Sun Lakes Realty) over 4 years ago


Your right on point . . . . when both the buyer and seller are represented by a real estate professional. The transaction seem to go a lot smoother.

Good luck success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) over 4 years ago

Joe, if the buyers really love the house, and if it is worth the money to them, they might not appreciate a Realtor doing out job and, perhaps in their view, getting in the way.  Once in a while, I have to back off and let the buyers decide what to do - as long as it's an informed decision, I've done a good job.

Posted by Patricia Kennedy, Home in the Capital (RLAH Real Estate) over 4 years ago

That is a big red flag being on the market so far. Glad they worked it out and you were able to do the deal.

Posted by Debbie Reynolds, Your Dedicated Clarksville TN Real Estate Agent (Platinum Properties) over 4 years ago

I think you rested your case very well Joe!!!

Posted by Patricia Feager, MBA, CRS, GRI,MRP, Selling Homes Changing Lives (DFW FINE PROPERTIES) over 4 years ago

Maybe the old real estate cliche of  "location, location, location"  makes it worth more in the eyes of this buyer Joe Petrowsky 

Posted by DEANNA EARLY - - ( NMLS # 268590 ), Highest Ranked Mortgage Loan Originator Virginia (American National Bank & Trust) over 4 years ago