A property that is sold “for sale by owner” (FSBO) is one that is sold without the assistance of a real estate agent or realtor.
Although that sounds clear enough, there are a few distinctions between buying or selling an FSBO home and buying or selling a home through an agent.
For example, FSBO properties cannot be listed on a multiple listing service, where thousands of real estate agents and buyers can see them. That makes an FSBO home more challenging to locate and market. And if this is your first time buying or selling an FSBO home, there will be a learning curve, exposing all parties to common blunders such as pricing that is too high or too low.
So, what makes people opt for an FSBO? They assume the process will be more straightforward because of a hot market or a home that “sells itself,” in addition to not having to pay an agent’s fee. The experience, however, may be a little bit more challenging. That’s why understanding what to expect before jumping into the FSBO market is critical.
Buying an FSBO Property
Buying an FSBO property is similar to purchasing an agent-sold home in that you can get a mortgage, work with a buyer’s agent, walk around the house, make a bid and close.
However, there are several distinctions to be aware of before getting underway. These include the benefits and drawbacks of purchasing an FSBO house as well as essential considerations to keep in mind if you decide to do so.
Benefits of Purchasing an FSBO Property
The following are some significant benefits of purchasing an FSBO home:
- There is the chance of direct negotiation
- You may get a better deal on the house
- You can communicate directly with the owner
- The owner has firsthand knowledge of the property and its surrounding
Drawbacks of Purchasing an FSOB Property
Here are some to the major drawbacks of purchasing an FSBO home:
- It’s possible the owner has no experience with real estate
- If you have a buyer’s agent, the seller has the option of refusing to contribute to the fee
- The owner may inflate the home’s value due to a lack of experience or an emotional connection to the property
- Litigation could be a long and costly process if the seller did not reveal everything
- If there are problems with the house, the seller does not want to spend more money on them
Selling Your Home on Your Own
Selling your home without the assistance of an agent can be more difficult than you think. For starters, you’ll have to handle all the work, such as selling your house, showing it and negotiating and closing.
Furthermore, a lack of awareness can lead to costly mistakes, such as underpricing or overpricing or making a legal mistake. Before placing an FSBO sign on your lawn, determine if selling your house on your own is worthwhile.
Advantages of Selling Your FSBO Home
The following are some significant benefits of selling your FSBO home:
- You have complete power over the selling process and sale of your home
- You won’t have to pay a seller’s agent fee, which means you’ll keep a portion of the selling proceeds
- You know your house better than anyone else, which may give you an edge when it comes to showing it to potential buyers.
Drawbacks of Selling Your FSBO Home
Here are some to the major drawbacks of selling your FSBO home:
- Because you won’t be able to list your home on a multiple listing service, it will have less exposure than a home sold by an agent
- You’ll need to do your homework and educate yourself on the real estate industry as well as on pricing, marketing and negotiating a contract
- Due to a lack of experience, you can sell your home for a price that is more or less than its value
- You’ll be responsible for your own documents and legal obligations.
Is an FSBO Property Right for You?
You’ll be better prepared to decide if this is the right option for you now that you know what to expect when selling an FSBO home and what to expect when buying one. Before jumping into an FSBO deal, whether you’re purchasing or selling, it’s a good idea to educate yourself about both sides.
Contact Attorneys Real Estate Group today if you require assistance with an FSBO matter. Feel free to contact us on our website or by phone at (800) 481-4049; we look forward to assisting you.