Buying a ‘For Sale by Owner’ Home? Here are 4 Things You Need to Know
December 13, 2018
You’ll see listings for hundreds of homes during your home-buying process, with a majority of them listed by real estate agents. Occasionally, you’ll come across one that is listed by the actual owner. This is what’s known as a For Sale By Owner (FSBO).
Fewer people involved means a simpler process, right?
That’s a misconception- the reality is, fewer professionals involved means more is at stake. If you’re interested in buying a FSBO, it’s recommended that you have a buyer’s agent who is working on your behalf to make sure that you’re protected.
Here are a few things to remember if you’re interested in buying a home sold by the owner:
Don’t Think of The Home Differently:
Don’t look at the physical house any differently, whether it is being sold by the owner or by an agent. You may be meeting with the owner of the house face to face, and you should try to keep any emotion out of the process. Seeing the owner in your potential new home may make you feel uncomfortable. It’s important to remember that this is a business transaction and your job is to make sure that you’re covering all of the important details without being afraid of hurting the seller’s feelings. All the more reason to have your agent as the go-between, they are trained and skilled in communicating issues in a favorable way.
Sellers Will Usually Work with Your Agent:
Smart home sellers understand that most home buyers work closely with an agent throughout the process. They are aware that the agent plans on getting compensated just like any other agent usually would.
When you find a FSBO situation in front of you, ask your agent to reach out. Most sellers can work successfully back and forth with an agent.
Same Laws Apply:
FSBO’s must abide by all the same laws such as disclosing problems, inspecting the home or performing any repairs. People that go into this process by themselves often aren’t always familiar with the entire real estate process.
Be sure that you are extra careful, and that the seller isn’t neglecting an important duty. Use your agent’s judgment on the scenario as they know when a situation isn’t worth diving into.
Pricing May Not Be Right:
One of the biggest mistakes that FSBO’s make is pricing their house incorrectly. Their judgment may be clouded by their emotional attachment to the home. It’s not uncommon for sellers to disregard what agents suggest as well as current home values in their market. The listing may also be missing data about the home. Your agent can work with you to get a seller’s disclosure form or data questionnaire filled out to help fill in the gaps.
This isn’t to say that FSBO’s should be avoided, but you need to be aware of the issues that can arise and how important it is to protect yourself and exercise due diligence throughout the process. Ask your agent for advice and be open to all listings out there. This is a competitive market and buyers need to keep an open mind when looking for a home.