Not sure how to handle this

[Anonymous]

Okay, so I put a verbal offer in on a home that my wife and I really want (long story, if interested, PM me).  It's a "For Sale By Owner" (FSBO).  When I saw the For Sale sign, not an official FSBO sign, but a sign that you'd buy at lowes that you might put in the window of a car, I figured the homeowner knew what they were doing.  We walked the house and decided to put an offer on it.

Owner is has a very reasonable asking price...very reasonable.  I'm going VA so I offered 5% greater then asking price with the seller covering closing costs.  She acted like I was trying to scam her.  She had difficulty understanding why I'd offer more then her asking price.  I got pretty lucky and her boyfriend (who's not listed on the property) seemed to have a decent grasp of what I was saying and talked to her.  What followed was a list of questions and conversations about mortgages and the buying and selling of properties.  I asked her to sign an "Intent to Purchase" document, which is clearly labeled as "not a binding contract" and she said she needed to think it over and would call me in a couple days.

What transpired on that follow up phone call leads me to believe that this woman honestly thought that somebody was going to show up at her house with $98k, hand it to her, she'd turn over the keys and it'd be a done deal.  Much the way somebody would sell a TV on craigslist.  Things that lead me to believe this:

A)  She had no clue that a lawyer would have to do a title search, provide a title policy and record the new mortgage.

B)  She was unaware that her current lender would have to do a satisfaction of lien document.

C)  She thought we could close in a couple weeks (She actually said that she didn't want to drag this out for more then a few weeks."

       Luckily, her boyfriend did advise her that even if we signed a purchase agreement today, it'd take 4-6 weeks to get to closing.

D)  She felt "morally" obligated to give a guy who had viewed the property before me a chance to put an offer in on it, even though he hadn't even started the application process, had advised her that he wasn't sure if he was ready to take on a mortgage and wasn't sure, if he did buy a home, that he wanted to buy one with that much land (5.5 acres).  She has contacted him and advised him that somebody else (me) is interested in the property and is waiting for him to return her call.

My wife and I really want this house.  I'm not sure how to convince the seller that she either a) needs to trust me and let me help her with the final details, or b) seek professional help and hire a real estate broker.  My buyers agent advised me to offer her 6% more then I've already offered her and tell her to find an agent that she's comfrotable with and I'll pay it.  I'm happy to do that, but I'm afraid that if an agent gets wind of her asking price, the price will go up...To give you an idea of how well this is priced, it's got everything we've been looking for, for the last 2 months, and the sellers asking price is $80k-$50k lower then the range we've been looking at.  It also has some very sentimental value, but you can't put a price on that.

If you've read this far, thank you.  How would you handle a seller who has no clue what they are doing?

[StartingOver10]

She sounds like a first time seller. Most of the issues you mentioned with first time sellers are handled by agents every day (as you know).

Since you have the basics of the deal worked out you might try to have the seller use an attorney to write and close the deal (or a title company). This way she has someone to help her through the transaction. It also sounds like you have done all the communication with the seller. Has your agent tried to communicate at all with the seller? You could try that - where your agent is a transaction or dual agent. I assume that's why your agent brought up the X'tra 6% to tack onto the price.

Your comment about FSBO's being experienced sellers is a common misconception. There are FSBO's that are experienced sellers, but I have found that most FSBO's have no idea of the process, they are only looking to save the commission, even if they underprice their own house by thousands. When you are working with this type of seller it is critical to bring in a third party that they can trust so the transaction doesn't blow up at the last moment. The seller may not want to use your agent or your attorney, but it doesn't hurt to refer her to at least two or three independent parties so she can interview and feel comfortable hiring someone to represent her interest.

BTW, from your perspective, it probably would be better to have her work with a title company or attorney rather than another realtor. The attorney is unlikely to discuss market value with her - at least they shouldn't be discussing market value - only the contract terms. Does your area use title companies to close or attorneys? If your area typically uses a title company to close the transaction, have her contact a title company and discuss the process with them. They have staff that is very educated (generally) and can walk her through the process.

[Anonymous]

It's generally title companies.  I didn't know they would get involved in that capacity, and it's a great idea.  I was afraid of having my realtor contact her because I figuerd she'd see him as being on my side and wouldn't trust him either.  I'm expecting a phone call from her today.  Hopefully things will go well and we can move forward, if not, we'll go from there and I'll have to improvise, adapt and overcome.

[Anonymous]

Update:

I spoke to her at length yesterday and it seems like she's getting more comfortable.  She called her previous loan officer (who happens to sit next to my loan officer, but that wasn't planned) and it looks like we're going forward.

[StartingOver10]

Congrats! That is a big hurdle