What You Should Know About Homes ‘For Sale By Owner’
When someone sells their own home, does it simplify the process for buyers? Or does it make things more complicated? Here’s what you should know about homes ‘for sale by owner’ or FSBO for short.
Most sellers will compensate your agent
Real estate agents earn their commission from the seller, not the buyer, of a home. Smart home sellers know this. They realize most buyers work closely with their agent for weeks, if not months or years. As a result, FSBO sellers usually understand they need to compensate the buyer’s agent, or otherwise they could limit the agents who will bring their clients to see the property. So if a FSBO opportunity crosses your path, ask your agent to make the first contact. Most likely, they can still work for you and get paid for their efforts.
Don’t think of the home differently
If you find a great home in a prime location that meets all of your criteria, don’t think of it as any different if it’s listed FSBO rather than by an agent.
The main difference is that you’ll meet the owner face to face, which you don’t usually do when the seller has an agent. A home sale is more emotional and personal than, say, the sale of a used car. As such, seeing the owner might make you uncomfortable. Try to get past it and keep your eye on the prize—your dream home.
The usual laws still apply
If the law stipulates that the seller has a duty to disclose problems, inspect the home, or perform any repairs, the FSBO seller must cooperate. Trust your gut and your agent’s judgment if you think the seller is neglecting a duty or not allowing you to do your due diligence. If it doesn’t feel right, move on.
The pricing may be out of whack
Homeowners who list their home themselves tend to share one thing in common: They reject local agents’ opinions about their home’s value. Sellers (FSBO or not) who are unable to emotionally detach from a home or who don’t have a solid plan post-closing sometimes self-sabotage their sale by overpricing. These sellers typically meet with local agents before they list. But they don’t like the agent’s pricing strategy and want to give it a stab on their own.
Sometimes, when they fail to sell solo, they enlist the help of an agent, and get the home on the market at the right price. Why? Because when it comes time to get serious, sellers often want representation.
Keep your mind—and your eyes—open
A home for sale without an agent isn’t off limits. Ask your agent about the listing, and keep your mind open to seeing it and treating it just like any other opportunity you or your agent finds.
A good real estate pro should tell you up front that they could represent you in any sale. Go in with your eyes wide open and know that, just like any negotiation, it may or may not work out.