As some of you know, as a real estate agent, I strive to know the entire market for real estate, not just the units that are on MLS. As a result, I often reach out to private (FSBO) owners or owners who might be interested in selling a unit that a buyer-client of mine is interested in.

This is a story of how one such FSBO listing was intentionally misleading and I was able to save time and money for myself and my client by doing some research. I hope it serves as a cautionary tale.

The particular listing was advertised as a 2 bed/ 1 bath in the Exchange Place area. The square footage section at most of the websites the ad appeared in stated it was 2000 sqft, making the list price of $650,000 a huge steal (Zillow calculated it as $325/sqft). The description however stated that the interior space was “approximately 1000 sqft,” which now vaulted the price to $650/sqft. This was still not unreasonable, given that the unit had a parking space and elevator. The rest of the square footage was a large private terrace.

However, when I dug deeper into the Hudson County property records, I was amazed to find the interior square footage was only 880 sqft, making it now $738/sqft. Even with the parking and terrace, without any other amenities, this was a very expensive price. To put it in perspective, a similar sized one bed unit on the 48 floor of Trump Plaza costs about the same.

Last I heard, the unit is under contract for the list price. If the buyer is applying for a mortgage, there is a likelihood that the appraisal will fall short and the buyer might need to bring more at the closing.

While a licensed real estate agent may avoid blantantly misrepresenting the size of a unit for fear of losing his license and his livelihood, a seller has only a canceled contract and some attorney fees to lose. Also note, the seller is trying to save the same commission dollars you are hoping to save by going the FSBO route. And all this assuming both you and the seller agree on a fair price.

Can FSBO's negotiated without an agent sometimes be a deal for buyers? Of course, but only if you are a sophisticated buyer with a good understanding of construction costs who is willing to do research and negotiate your best interests! A real estate purchase is likely your biggest investment, it behooves you to understand all the risks before you dive in.

More about Dalia: 

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