As you’re on the search for your new home, you’re going to encounter a lot of different types of homes, each with their own unique seller and representing agent… though that last point might not be relevant if you want to buy a For Sale By Owner (FSBO) home.
A For Sale By Owner home is exactly what it sounds like: a home that’s for sale by the owner. Yes, that means they decided to forego the representation of a real estate agent, probably to save money. But that doesn’t necessarily mean it’s going to save you any money if you decide to purchase from them. Before you decide this is the right path for you, consider some of our FSBO buying advice.
There can be a variety of reasons why someone would decide to sell their home themselves, but chief among them is that they want every last dime associated with their sale – especially if they live in a desirable neighborhood. Other reasons can include a seller being so difficult that they can’t find a real estate agent to work with them, or an unwillingness to bring their home up to code to account for a successful sale. It’s also helpful to know how long a home has been on the market, and if it’s been a while, why the owner thinks it’s not selling. These are all things you’re going to want to research and ask about if you find a FSBO home you’re interested in.
Before you hand all your money over to someone with a FSBO home, there are things you’re going to want to check out for yourself. Of course, make sure you’re getting a fair deal by pulling comps for homes in the area, which will help immensely if you reach the point where you go into negotiations. You’ll also want to do inspections as you would with any other property, and make sure the house is up to code and has no major issues with it.
Just because a seller has decided to forego an agent doesn’t mean that you have to – or even that you should. In fact, your realtor can be of great help if you find a FSBO home that you adore. You can have your agent approach the seller and have them ask questions about everything you want to know about the house, and have them help you with comps and neighborhood research. They’ll also be of great assistance during closing. It’s likely your agent will negotiate their fee with the seller and get paid a flat fee for their assistance. If the seller does not want to cover that cost, the onus will be on you to negotiate with your agent and cover that payment.
Bear in mind that if you fall in love with a FSBO home that’s in a hot spot, it might be difficult for you to do any negotiating on the seller’s asking price – so make sure you have comps on hand to support your offer. But what if the house isn’t as in demand as the seller hopes? You’ll certainly be in a better position to negotiate, especially if you have those comps to back up your offer.
While a FSBO isn’t the usual, that doesn’t mean you can’t find a great home for a great price. Just make sure you do your research so you know exactly what you’re getting. Good luck!