3 Things To Consider When Buying a House Directly From The Owner (FSBO)
April 26, 2022
Oh, those overpaid real estate agents, who needs them?
Believe it or not, this is the feeling that many home sellers have when they are selling their houses. Though they may know nothing about the real estate process, home sellers are willing to enter into it alone, signing their names on some of the most significant documents they will ever sign, without professional representation. As a home buyer, you may run into FSBO sellers and while this may seem like it would be a great deal for you, there are a few things that you should consider before buying a home from the owner. Here are 3 things to consider when buying a house directly from the owner.
1. The Seller Typically Pays For The Buyer’s Agent
I meet a lot of people during the course of a business week that don’t know that it’s the seller who pays all the real estate fees at closing. This includes not only the seller’s real estate broker’s commissions, but the buyers’ agent’s as well. Not many things in life are free, so the fact that you can hire someone to represent you in one of the largest financial transactions you’ll ever be a party to, at no cost to you, is pretty compelling. However, if a seller is doing a for-sale-by-owner transaction, they are not required to pay for the buyer’s agent, leaving that responsibility to you.
2. Not All FSBO Sellers Cooperate With Real Estate Brokers
When an FSBO seller agrees to pay a buyers’ real estate agent’s commission, the process is known as cooperating with brokers. Although, not all FSBO sellers are willing to do so. If you’ve decided to work with an agent in the purchase of an FSBO property, make sure to ask the seller if he or she is willing to pay your agent’s commission upfront. That way there are no surprises later on in the transaction.
3. Home Buyers Won’t Necessarily Get a Discount
Many buyers are under the impression that, since the seller doesn’t have to pay an agent’s commission, the home seller will be willing to lower the price of the house accordingly. Although nothing could be further from the truth.
Consider this: the typical FSBO seller is single and earns less than the area median income. He or she is also less likely to offer help with closing costs than home sellers with real estate agents, according to the National Association of Realtors (NAR). Furthermore, the number one reason a homeowner chooses to go it alone when selling is to save the money they would’ve paid in commissions. They are not about to give this money to the buyer of their home.
Contact a Negotiator To Work With a Good Real Estate Agent
There are benefits to selling a house by owner. The seller keeps control over the entire process, you don’t have to deal with a real estate agent, and you could potentially save money. However, there are many drawbacks to selling a house by owner as well. In fact, many home sellers who start off selling their house by themselves actually end up hiring a real estate agent at some point instead. There are three main reasons sellers who were on their own turn to real estate agents, according to a 2018 Zillow report.
- Selling is overall easier with a real estate agent.
- It takes too long to sell a house by themselves.
- The home sellers need real estate professionals to help with the paperwork.
Buying a home the right way takes a lot of time and resources. Buyers want to find the right home for the right price which can be taxing on only one person to handle. Not to mention, there is a lot of paperwork that needs to be filled out and filed correctly in order for the sale to finalize without any problems. Just like buyers want to find the right house, they need a good real estate agent to help them throughout the entire home buying process. If you want a good, experienced real estate agent that will go above and beyond for you, then contact a Negotiator.
Negotiators are made up of some of the best real estate professionals in the country and they are held to the highest standards. Find out who your local Negotiator is here.
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Rob Proctor is a real estate agent with over 20 years of experience in the state of Colorado. He is a three-time winner of The Best Real Estate Agent accolade by Reporter Herald Readers Choice and in 2014, he was given Realtor® of the Year by Loveland-Berthoud Association of Realtors®. Rob spends his free time volunteering in his community, at church, and in Habitat for Humanity.
Learn more about Rob Proctor on his profile here.